As the financial crisis has unfolded, I’ve heard a lot of voices loudly insisting that nobody could have foreseen this. And I’ve also heard a lot of voices wondering why nobody foresaw it. And I’ve also heard a lot of voices insisting that, hey, damnit, I did foresee this. What there’s been less attention to is what I think is the more disturbing angle to the crisis — the extent to which the people who mattered were perfectly aware that something was amiss and just didn’t really care.

Apparently, for example, Chuck Prince of Citigroup told the FT “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance.” James Surowiecki remarks: “That sounds like someone who realized that there would be a drying up of liquidity, and that things would be ugly as a result, but who decided that it didn’t matter . . .even when people recognized the possibility of dragons, they decided it was in their short-term interests (even if it wasn’t in the company’s interests), to run the risk of getting incinerated anyway.”

And, indeed, as best I can tell Prince is still a multimillionaire. Looking back, I think it’s clear that Prince didn’t exactly maximize his wealth with his decision-making. But he didn’t really blunder, either. Nobody’s perfect, and he made out extremely well in the scheme of things. If in the course of doing so he contributed to huge problems at his company and massive suffering around the world, well, that’s not really his problem. He’s a businessman trying to get rich. And he succeeded.

One interesting issue in the current crisis is how come Hezbollah hasn’t acted aggressively to start up a second front in the north while the IDF is conducting major operations in Gaza. Abu Muquwama has some plausible sounding speculations about this. One could, I think, probably construct other scenarios. Part of the reason is almost certainly just status quo bias and inertia — on any given day, Hezbollah has a strong presumption against undertaking a dramatic escalation of the conflict with Israel.

But note that while one can adduce all kinds of reasons to explain Hezbollah’s actions, none of them are consistent with the (apparently popular in Israel as well as among US neocons) line of thinking which holds that both Hamas and Hezbollah are nothing more than puppets of Iran and extensions of Tehran’s relentless drive to eradicate Israel.

Ben Smith reports that Rep Xavier Becerra doesn’t want to fill in for Bill Richardson as Official Hispanic Cabinet Dude at the Commerce Department. And I can’t blame him, it’s a kind of C-List department and his current job in congress is a pretty good one. But I’m no member of congress — why not me? I’m very interested in the department’s statistical collection functions.

Steven Walt says:

Here’s why it won’t happen any time soon. As Cindy Williams, former director of the National Security division of the Congressional Budget Office and now a senior research scientist at MIT, points out in an as-yet unpublished paper for the Tobin Project, DOD is insulated from serious cuts by an array of impressive political advantages. First, its budget is more than 50 percent of all federal discretionary spending, and its sheer size gives it a lot of bureaucratic clout. Second, the Pentagon has a large domestic constituency: there are 1.4 million men and women in uniform, 850,000 paid members of the National Guard and Reserve, and 650,000 civilian employees. Forget GM, Ford and Chrysler: the Department of Defense is the largest single employer in the whole country. Now add the companies that provide goods and services for the military. Their employees amount to about 5.2 million jobs, which is a pretty impressive domestic constituency. And don’t forget those 25 million veterans, who are hardly shrinking violets when defense spending is concerned. Finally, a well-financed group of Beltway bandits and Washington think tanks stand ready to question the patriotism of any politician (and especially any Democrat) who tries to put the Pentagon on a diet.

It seems unlike a realist to cite domestic political dynamics as the cause of national security policy, but clearly this is correct. And I would note the last point about the think tanks has implications that go beyond the budget. People don’t like to be dishonest — to advocate for policies they disagree with purely in order for money. And actually the think tank lifestyle isn’t very lucrative. Which means that if people and firms who profit from high levels of military expenditures want to support think tanks that support high levels of military expenditures they need to identify individuals who genuinely believe that high levels of military expenditures are good and properly. Naturally, people who think that kind of thing tend to be people who have a somewhat paranoid attitude toward foreign countries and who are strongly predisposed to favor aggressive use of military force by the US and our allies alike.

That in turn comes to be a serious distortion in the public conversation.

And it goes further. Many members of congress don’t represent districts that particularly benefit from high levels of military spending. And those members tend not to seek out assignments on the congressional committees that deal with military expenditures. But those members whose districts do benefit from said expenditures do seek out those assignments in order to maximize the share going to their folks. That has a distorting effect all its own, but it also re-enforces the think tanks issue. Members of congress like to call experts in to testify who they know are going to agree with them. So if the armed forces committees are dominated by people who favor big military spending, they’ll tend to call in “experts” who agree with that agenda — hawks.

This, in turn, gives hawkish think tank types more juice and credibility. And this, in part, is where the Very Serious People come from. Frank Gaffney gets on TV all the time but you’ll never see Carl Conetta. Gaffney’s a crank, but Conetta’s something much worse — a peacenik.