Alec MacGillis has a great piece in the Post on the evils of the U.S. Senate. Probably little of it will be strikingly new to anyone who’s read my extensive whining on this subject, but this bit of history—how the GOP manipulated the entrance of new states into the union in order to artificially preserve control of the senate—isn’t as well-understood as it should be:
After the Civil War, the Senate became the bastion of the GOP as the party pushed to admit pro-Republican states to the union. Nevada was admitted in 1864 to help ratify the Civil War amendments despite being virtually empty; the Dakotas joined in 1889, split in two to provide more votes in the Senate and the Electoral College; Wyoming joined a year later with 63,000 residents.
With these added votes in the Senate and the Electoral College, the Republicans dominated throughout the late 19th century despite Democratic strength in the House. High tariffs, land giveaways in the West, lax regulation of railroads and a pro-business Supreme Court were all thanks partly to the underpopulated new states, says MIT historian Charles Stewart III.
In my view these frictions are also the root cause for the failure of the efficient market hypothesis (EMH). For example, bubbles can emerge and persist due to limits to arbitrage. Of course, as Bob Lucas points out, when it is commonly known among all investors that a bubble will burst next week, then they will prick it already today. However, in practice each individual investor does not know when other investors will start trading against the bubble. This uncertainty makes each individual investors nervous about whether he can be out of (or short) the market sufficiently long until the bubble finally bursts. Consequently, each investor is reluctant to lean against the wind. Indeed, investors may in fact prefer to ride a bubble for a long time such that price corrections only occur after a long delay, and often abruptly. Empirical research on stock price predictability supports this view. Furthermore, since funding frictions limit arbitrage activity, the fact that you can’t make money does not imply that the “price is right”.
This way of thinking suggests a radically different approach for the future financial architecture. Central banks and financial regulators have to be vigilant and look out for bubbles, and should help investors to synchronise their effort to lean against asset price bubbles. As the current episode has shown, it is not sufficient to clean up after the bubble bursts, but essential to lean against the formation of the bubble in the first place.
This calls on us economists to further develop our tools (including mathematical tools) to integrate the insights financial economists have developed on frictions and the formation of bubbles into the fully fledged dynamic stochastic general equilibrium macro and monetary models that macroeconomists have been working with. Bringing financial economists, macro- and monetary economists together to take on this challenge of building a new workhorse model that incorporates financial frictions would be a great first step in this important (and exciting) endeavor.
Yesterday, Sen. David Vitter (R-LA) held a town hall meeting in Pineville, LA, attended by nearly 1,500 people. The discussion mostly focused around health care reform, and Vitter said that he is “totally and unalterably opposed” to the proposals being put forth in Congress.
Ironically, this Pineville event where Vitter made these comments was full of pre-screened questions. According to a report from Pineville’s local paper, The Alexandria Town Talk:
The Louisiana Republican spoke at what was billed as a town hall meeting at Louisiana College’s Guinn Auditorium. It was a friendly audience but there was little chance for disagreement to be expressed.
The panel of speakers all joined Vitter in opposing the reform package being debated in Congress. Questions from audience members were screened and selected in advance of the event.
This morning on MSNBC, The Wonk Room’s Igor Volsky and FreedomWorks President Matt Kibbe discussed the astroturf campaign many right-wing groups (including FreedomWorks) are engaged in to disrupt health care town hall meetings across the country with members of Congress. Igor noted that these groups are “very good at tapping into that paranoid place in American politics that we saw at the end of the 2008 election when people were coming to McCain’s town halls and calling President Obama a terrorist, a socialist.” When pressed by host Alex Witt if his organization is encouraging people to be disruptive, Kibbe at first dodged the question, but said that “shouting is not the way to get this done.” He then, however, admitted that FreedomWorks urges people to be “agressive”:
HOST: So you are not encouraging, do you want to tell me definitively, you have not encouraged your members in FreedomWorks to show up at these town hall meetings and be disruptive? [...]
KIBBE: Shouting is not the way to get this done. The right thing to do is to be aggressive, get to the microphone, express your opinion, but let the congressman talk as well. That’s always been our position.
Last week, FreedomWorks Vice President Max Pappas boasted about “blowing” the town halls “apart” and declined to try to get the group’s members to “calm down.”
And now it appears Attorney General Holder is getting closer to appointing a special prosecutor for the CIA’s torture apparatus. That prosecutor will focus, according to Greg Miller and Josh Meyer, just on the CIA, and not even on the top agency officials who helped create the apparatus, but on the frontline interrogators who went beyond the “legal” guidance about how much torture was permissible. I don’t want to suggest that an operative who walks into an interrogation chamber with a gun is an innocent. But it’s plainly an affront to common sense to suggest that the circumstances that led him into that room shouldn’t be the subject of investigation.
Tom Malinowksi from Human Rights Watch says “An investigation that focuses only on low-ranking operators would be, I think, worse than doing nothing at all.” I think that’s probably going too far, but this seems like an extremely rotten deal. Something similar was done after Abu Ghraib and it’s no good.
In recent weeks, conservatives have been attacking a small provision in the House-proposed health care legislation that would allow Medicare to cover advanced care consulting. The Republican National Committee sent out a research document claiming the House legislation is encouraging euthanasia. Rep. Virginia Foxx (R-NC) said it was placing “seniors in a position of being put to death by their government.” Former Alaska governor Sarah Palin picked up this meme on Friday and took it further in a statement she posted on her Facebook page:
The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s “death panel” so his bureaucrats can decide, based on a subjective judgment of their “level of productivity in society,” whether they are worthy of health care. Such a system is downright evil.
These claims are complete lies. The House bill would simply give seniors the option of speaking with an expert about advanced care issues, such as living wills. As FactCheck.org explains, “[I]t requires Medicare to cover counseling sessions for seniors who want to consider their end-of-life choices — including whether they want to refuse or, conversely, require certain types of care.”
“This measure would not only help people make the best decisions for themselves but also better ensure that their wishes are followed,” responded AARP Executive Vice President John Rother. “To suggest otherwise is a gross, and even cruel, distortion.”
On Friday, HBO host Bill Maher questioned Republican Reps. Darryl Issa (CA) and Jack Kingston (GA) about Palin’s “death panel” statement. “It’s a scare tactic, no question about it,” said Kingston, who added that there are no death panels. Issa ignored the question and tried to change the topic. Watch it (around 20:30):
Guests on today’s Sunday talk shows were also largely incredulous at Palin’s statement. “About euthanasia, they’re just totally erroneous. She just made that up,” said former governor Howard Dean. “Just like the ‘Bridge to Nowhere’ that she supposedly didn’t support.” On NBC’s Meet the Press, conservative columnist David Brooks said it was “crazy.” On CNN, reporters said it showed how Palin has trouble discussing substantive issues:
JESSICA YELLIN: No, and that’s a low blow. That’s not an accurate assessment of what this panel is, but it definitely will get her attention.
DAN BALZ: Jessica is right, it does get attention. It’s not the way to debate this bill, and it’s another example of Sarah Palin having difficulty figuring out how to enter into a serious debate about issues.
ED HENRY: Yes, and people are being whipped up on that issue right now and they think that essentially euthanasia is going to be allowed based on this health bill. Obviously it just doesn’t pass the Joe Six-pack test, I think even Sarah Palin would acknowledge.
The changing global climate will pose profound strategic challenges to the United States in coming decades, raising the prospect of military intervention to deal with the effects of violent storms, drought, mass migration and pandemics, military and intelligence analysts say.
Such climate-induced crises could topple governments, feed terrorist movements or destabilize entire regions, say the analysts, experts at the Pentagon and intelligence agencies who for the first time are taking a serious look at the national security implications of climate change.
So begins the excellent lead story by John Broder in today’s NY Times. This won’t surprise regular readers — indeed, last September I wrote about an unusually savvy new intelligence forecast on global risks “previewed in a speech by Thomas Fingar, the U.S. intelligence community’s top analyst” which
… envisions a steady decline in U.S. dominance in the coming decades, as the world is reshaped by globalization, battered by climate change, and destabilized by regional upheavals over shortages of food, water and energy.
The report … also concludes that one key area of continued U.S. superiority “” military power “” will “be the least significant” asset in the increasingly competitive world of the future, because “nobody is going to attack us with massive conventional force.”
Thank you George Bush and Dick Cheney and your fellow deniers for delaying action so long has to make such an outcome all but inevitable!
The photo above is from Darfur. The NYT notes, “The conflict in southern Sudan, which has killed and displaced tens of thousands of people, is partly a result of drought in Darfur.” A 2007 Atlantic Monthly piece, “The Real Roots of Darfur,” went further, asserting, “The violence in Darfur is usually attributed to ethnic hatred. But global warming may be primarily to blame.”
And we haven’t even warmed 1°C yet! We’re facing more than five times as much warming the century as the last century on our current emissions path. How much conflict and misery will be caused when we have turned one third of the Earth’s inhabited land mass into a Dust Bowl and sea levels are more than a meter higher and the oceans are increasingly hot, acidified dead zone, which is what the second half of the century holds in store when we blow past 550 ppm on route to 850 to 1000 ppm or more?
This talk of climate change as a national security threat has a bit of a whiff of hubristic imperialism about it as I don’t think it makes a ton of sense to look at every possible instance of drought, famine, mass migration, civil conflict, and human tragedy abroad as a “threat” to the United States per se. That said, human tragedy is still pretty tragic and anything to help draw attention to the fact that “climate change” means honest-to-god major problems and not just somewhat warmer weather is useful.
As you’ve probably heard, British newspapers don’t maintain the same standards for scrupulous accuracy as we have here in the US. Thus sometimes you read a UK press report that, while interesting, you just know has to be false. For example, there’s this from The Guardian:
The NHS is developing a simple blood test that could save the lives of hundreds of unborn babies who are put at risk when doctors try to establish whether they are developing healthily in the womb, the Guardian has learned.
The test could put an end to the use of invasive procedures such as amniocentesis, which cause some women to miscarry.
Yes this seems like an interesting story about a potentially useful medical innovation. But the discerning reader will note that this is all allegedly happening in the United Kingdom, and funded by the National Health Service. The NHS, however, is a socialistic system and the UK a socialist land. And everybody knows that under socialized medicine, medical innovation will cease. Therefore, the story must be made up.