For the Love of the Money

As one of my first posts at the now-defunct Pushback.org, I wondered aloud about whether or not campaign finance reform was worth pursuing.  By that point, it was pretty clear that Barack Obama was well on his way to breaking all fundraising records, and more importantly, he did so in a way that made campaign finance law basically irrelevant.

With that in mind, I can’t say I’ll be too troubled if the Supreme Court overturns part or all of McCain-Feingold:

A quirky case about a slashing documentary attacking Hillary Rodham Clinton would not seem to be the most obvious vehicle for a fundamental re-examination of the interplay between the First Amendment and campaign finance laws.

But by the end of an exceptionally lively argument at the Supreme Court on Tuesday, it seemed at least possible that five justices were prepared to overturn or significantly limit parts of the court’s 2003 decision upholding the McCain-Feingold campaign finance law, which regulates the role of money in politics.

Several of the court’s more conservative justices reacted with incredulity to a series of answers from a government lawyer about the scope of Congressional authority to limit political speech.  The lawyer, Malcolm L. Stewart, said Congress has the power to ban political books, signs and Internet videos, if they are paid for by corporations and distributed not long before an election.

While I’m pretty agnostic about the court’s decision either way, I do think that will be a unique opportunity to drastically reform campaign finance laws if McCain-Feingold (or parts of it) are overturned.  Let me explain: at this point, there’s little chance that the Court will allow huge restrictions on fundraising or spending.  In politics at least, money will continue to flow like water and there’s not much we can do to change that fact.  So, instead of looking for ever more convoluted ways to restrict the flow of money, it might be a better idea to design a system with complete transparency in mind.  I’m not as concerned with how much money a given candidate has as I am with where that money is coming from.  A system where donations are unrestricted but each and every donation is released publicly and easily available seems preferable to me than what we have now, which is both arbitrary and lacks effective transparency (it’s kind of difficult to find donor information).  Oh, and a more robust system of public financing would be nice too.

Crime and Punishment

Here’s to hoping that Congress gives the Treasury Department and the Federal Reserve more power to take over and manage insolvent financial institutions, especially if this means that the administration is taking the first step towards nationalization.  For one, I think the idea is right on the merits; if the banks’ assets are actually worthless (and there’s a good chance that they are), then inducing the private sector to revalue these “toxic” assets (the Obama/Geithner plan) amounts to little more than tossing taxpayer money at the same folks who “managed” the banks into insolvency.  Nationalizing troubled banks won’t be cheap, but the advantage is that under a nationalization plan there’s no need to immediately revalue the toxic assets; the government can simply keep them in its backpocket, wait until to the markets improve, and then sell them for the best price it can fetch.  What’s more, the government can remove market pressures from the nationalized banks and guarantee their solvency.  With the faith and credit of the government behind the nationalized banks, they can be recapitalized, resume lending, and sold back to the private sector once they’re on the path to recovery.

I’ll be honest though, although my first priority is for a plan that makes economic sense (which this does), my second priority is for a plan that actually punishes the reckless investors and managers responsible for this crisis.  The advantage of a nationalization plan is that it wipes out the shareholders and allows the government to fire senior management.  Part of reforming the financial system means reforming the culture of finance, and actually doling out punishments is a good way to begin the transition into a more sensible and responsible banking culture.  By contrast, the Obama/Geithner plan does nothing to account for the failures of bank leadership, and even gives Wall Street incentives to game the taxpayers out of their money.

I should add too that part of my hunger for punishment is driven by the fact that the bankers who got us into this mess have yet to apologize for their recklessness.  Ezra Klein rightly denounced the bankers for their sickening lack of responsibility.  As he writes:

They should be begging for a shot at redemption. They should work without pay, without sleep, without credit. They should wear sackcloth and ashes. But more than that, they should be trying to help.

The fact that they aren’t, the fact that they’re out giving each other bonuses, buying private jets and patting themselves on the back for a job well done is insulting to the rest of us who have to live with their monumental incompetence.  It’s galling, and even if we don’t nationalize, we ought to do something to punish these fools for their stunning negligence.

links for 2009-03-24

• No Return to Normal – James K. Galbraith
  Why nationalization and a serious, long-term project of stimulus is necessary to save the economy.
  (tags: politics economy obama)
• Culture Shock – Charles Homans
  A profile of the now-defunct conservative webzine Culture11.
  (tags: politics philosophy)

links for 2009-03-23

• migas with tomato-chipotle coulis | smitten kitchen
  I will make this meal this weekend.
• Mexican Drug Cartel Violence Spills Over, Alarming U.S. – Series – NYTimes.com

Appropriate Rhetoric

What is it about conservative Republicans that they find it perfectly appropriate to compare Washington D.C. to “enemy lines” in a war zone and suggest that armed rebellion is an appropriate response to policy disagreement.  For all of the disdain and scorn liberals had for President Bush and his Republican allies, you rarely – if ever – heard liberals compare their opponents to foreign enemies or talk about achieving their ends through violence.  And this in the face of a shamelessly amoral administration with a reckless disregard for the Constitution. It’s genuinely troubling to me that conservative Republican representatives (people who represent American citizens to the American government) find this kind of language appropriate, even it is only for fundraising purposes.

Is it funky enough?

The Obama administration has released the details of its bank rescue plan and the reaction - among liberals at least – has been mixed.  Here is Paul Krugman in today’s New York Times:

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets. [...]

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

Berkley economist Brad DeLong (and blogger extraordinaire!) sees the plan as a “positive step from where we are,” and notes that while nationalization might be the better option, the Obama administration is constrained by political reality:

I think Obama has to demonstrate that he has exhausted all other options before he has a prayer of getting Voinovich to vote to close debate on a bank nationalization bill. Paul thinks that the longer Obama delays proposing bank nationalization the lower it’s chances become.

I think DeLong is on right the track here.  It’s not at all clear that President Obama has the authority to nationalize the banks absent congressional approval, and since nationalization would require Congress to allocate enormous sums of money, it’s very unlikely that Senate Democratic leadership could pass an authorization bill without approval from some Senate Republicans and the usual crew of “moderation”-obsessed Democratic senators.  More importantly, even if the Obama administration could successfuly shepherd a nationalization plan through Congress, it would likely be at huge political cost; Ben Nelson and Evan Byah will demand their pound of flesh, and the administration will have little choice but to acquiese. Geithner’s plan has the distinct advantage of not requiring congressional approval, so that if its successful, the administration will still be in a position to follow through on the rest of its agenda.  Politically at least, it’s a far better option that nationalization.

Update: Edited for clarity.

Why can’t we get people to change their behavior?

Or, opt in versus opt out programs and passive barriers to achievement.

I talked to a newly cynical friend who is working for Teach for America this evening, and came away wondering how to: a) convince high schoolers who read at the first grade level that Chemistry is worthwhile (conclusion: not very possible), and b) convince people in general to do things that are “good” for them that they may not want to do.

On that note, this is a really great article about how you can get yourself (or, optimistically, others) to change behaviors that are detrimental to them.

Before he starts to talk about this (possibly to stem comments from particularly bootstrap Republicans), he says this: 

While I do this, I’m going to ask you for a favor. You’ll see examples of people who lost thousands of dollars because they wouldn’t spend one hour reading a form. It’s easy to call these people “lazy” — and there’s certainly an element of that — but disdainfully calling someone lazy doesn’t explain the whole story. Getting people to change their behavior is extraordinarily hard — even if it will save them thousands of dollars or save their lives.

If it were easy, you would have a perfect financial situation: You’d have no debt, your asset allocation would be ideal and rebalanced annually, and you’d have a long-term outlook without worrying about the current economic crisis. You’d be your college weight, with washboard abs and tight legs. You’d have a clean garage.

But you don’t.

None of us are perfect. That’s why understanding barriers is so important to changing your own behavior.

Seriously, click over there and read the whole thing.  It’s worth thinking about why it’s so hard to get people to change how they behave from a slightly different perspective.

How do we change habits?

If you’re wondering why my last few posts have been focused on food and food related concerns, it’s because there has recently been a lot of good discussion surrounding food, agriculture and eating.  And since I spend a fair amount of my time thinking about these issues, I see no reason why I shouldn’t occasionally blog about them.  All of which is by way of noting that in today’s New York Times, author and food critic Mark Bittman explains – in typically excellent fashion – that, as far as health is concerned, eating “organic” food isn’t and shouldn’t be the first priority in developing a healthy diet:

No matter how carefully I avoided using the word “organic” when I spoke to groups of food enthusiasts about how to eat better, someone in the audience would inevitably ask, “What if I can’t afford to buy organic food?” It seems to have become the magic cure-all, synonymous with eating well, healthfully, sanely, even ethically.

But eating “organic” offers no guarantee of any of that. And the truth is that most Americans eat so badly — we get 7 percent of our calories from soft drinks, more than we do from vegetables; the top food group by caloric intake is “sweets”; and one-third of nation’s adults are now obese — that the organic question is a secondary one. It’s not unimportant, but it’s not the primary issue in the way Americans eat.

The primary issue, of course, is that Americans receive the majority of their calories from various forms of fat, sugar and simple carbohydrates, usually highly processed and completely devoid of nutritional value.  And even with federal nutritional guidelines which classify jams, ketchup and orange juice as “fruits and vegetables,” only a tiny percentage of Americans actually consume the recommended servings of fruits and vegetables.  The recent focus on organic food, while worthwhile, has obscured the fact that Americans don’t eat nearly enough fruits, vegetables and complex carbohydrates.  This despite the fact that for twenty years doctors and assorted professionals have been asking Americans to eat more fruits, vegetables and legumes.

Everyone knows that a cheeseburger is terrible for you, and yet millions of Americans continue to treat hamburgers and pizza as if they are a normal part of a regular diet.  And while we can provide incentives or target our subsidies so that farmers to produce more produce, I’m not sure what it is we can do to alter personal behavior, and push Americans towards actually following through on what they know.

(photo used under a creative commons license from flickr user Mundoo)

links for 2009-03-21

• The Truth About Forgiveness
  Another excellent piece at the Washington Post.
• John Rawls "On My Religion" Joshua Cohen and Thomas Nagel TLS
• Matthew Yglesias » A Center-Right Nation Forever
  (tags: politics history)
• Moving to Hamsterdam | The American Scene
• Matthew Yglesias » Crisis and the American Way
  Yglesias is pretty much on point here.

Southern-fried Conservatism

Ta-Nehisi Coates:

I think a sizable, maybe not a majority, of the conservative base doesn’t actually believe in small government. They believe in government not not taking their tax dollars and using it to help people who they don’t like. This goes back to state’s rights, Jim Crow and reconstruction. I don’t mean to impugn principled liberarians, but there’s certainly a strain of “small government” conservativism that’s rooted in those old racist notions.

I agree with Coates, but I’d go a bit further and argue that movement conservatism owes most of its existence and electoral success to these racist “states’ rights” conservatives, who were overwhelmingly Southerners.  Slavery and plantation culture implanted a particularly hierarchical worldview to Southerners, which was perpetuated by cultural and religious traditions which defended these racial and social hierarchies.  And this worldview wasn’t/isn’t limited to elites; it was/is a broad part of white Southern culture.  In large part, movement conservatism comes out of the South (Goldwater, 1964), and is shaped by these broad trends in Southern thought (it’s worth noting that many – if not most – prominent movement conservatives are from the South, or have Southern roots).

It’s no surprise that these conservatives shriek about federalism and “individual liberty,” but have no problem with a federal government which tortures prisoners or fights aggressive wars.  Both positions are informed – consciously or otherwise – by a hierarchical, quasi-authoritarian mindset which values “liberty” in so far that it is the right to establish and maintain one’s own hierarchies, without outside interference.  They view the United States’ as having that absolute right, and thus, it can do whatever it likes to maintain its established hierarchy.  One of the possible benefits of the George Bush’s failed presidency is that it may have discredited movement conservatism for the duration, temporarily freeing the country from its corrosive influence.