I read this paragraph from Floyd Norris and immediately had a concern:

Among regulators, a buzzword now is “countercyclical,” and efforts will be made to incorporate that into any new system. In essence, that says that regulators should force banks to take fewer risks when things are very good — perhaps by raising required capital levels — and to relax the standards when things are very bad and the world is desperate for credit. The current system tended to react to everything being good by concluding less capital was needed.

It turns out, though, that he got to my concern in the very next graf. When times are good nobody wants to take the punchbowl away:

We’ll see in some new cycle if that idea would really work. Would the regulators be willing to act when things are very good, as they failed to do in the last cycle? Some have doubts, among them Walter B. Kielholz, the chairman of Credit Suisse, who says he thinks governments are unlikely to support regulators if banks and customers complain.

Right after a giant blow-up is the time when regulation is least-needed. This year, the free market would probably avoid problems all on its own since the problems of too much leverage and too much systemic risk are at the forefront of everyone’s minds. But because they’re on the forefront of everyone’s minds, now is when enhanced regulation is most viable. When things are going well is when we need the regulation. But things going well will only increase the power and prestige of people who want to make the regulations more lax. Meanwhile, when nothing’s blowing up nobody cares about financial regulation except the interested parties. So we make them laxer when they ought to be more stringent, and support tighter regulation only when it’s least useful.

Jeffrey Goldberg is among those who think Israel’s problems can be lain at the feet of its proportional representation system:

The Arab world doesn’t have enough democracy; Israel has too much. Israel’s is an insane system, which gives every lunatic fringe party disproportionate say in the running of the country, and therefore encourages radicalism. Lieberman is incorrigible, but if he had to exist within the framework of a center-right party, he’d be marginally less offensive.

First, it needs to be said that Israel’s system, whether you like it or not, is hardly an “insane” outlier. Most small democracies use very similar systems and Israel is a small democracy.

Second, as regard Lieberman I think this is totally wrong. If he had to exist within the framework of a center-right party in an American-style system, he and his followers would be the “base” of his party. He wouldn’t be a viable national leader, but he could still, à la Mike Pence, be an influential force. But more to the point, the larger center-right party would be anchored to the base’s views. Under the current Israeli system, there’s no procedural rule forcing Netanyahu to govern in coalition with Lieberman. The current electoral results are consistent with a center-right coalition grounded in a Likud-Kadima partnership. By contrast, in the U.S. system only coalitions that start at the extreme and work inwards are viable on anything other than a spot basis. And one consequence of this is that centrist dealmaking tends, à la Nelson-Collins, to devolve into inane horse-trading rather than a genuine effort to develop a synthesis of ideas.

Lifetime tenure for federal judges is a very dumb idea. The fact that anyone supports it is, in my view, just a pure example of status quo bias. If we lived in a country where the nine justices of the Supreme Court were serving staggered eighteen year terms (i.e., one new justice every two years) absolutely nobody would be saying “if only justices stayed on the bench until death!” The point of life tenure is to give the judges independence from short-term political considerations. But a long fixed term, combined with a reasonable pension, completely meets that goal and avoids the high level of arbitrariness associated with the current system along with the macabre spectacle of wondering when people will die and the goofy incentives to appoint justices who are as young as possible.

But if you’re not convinced by me, listen to Sandy Levinson and Scott Lemieux.

Outgoing Israeli Prime Minister Ehud Olmert has spoken as clearly as anyone about the danger to Israel of a collapse in the idea of an independent Palestine:

“If the day comes when the two-state solution collapses, and we face a South African-style struggle for equal voting rights (also for the Palestinians in the territories), then, as soon as that happens, the State of Israel is finished,” Prime Minister Ehud Olmert told Haaretz Wednesday, the day the Annapolis conference ended in an agreement to try to reach a Mideast peace settlement by the end of 2008.

“The Jewish organizations, which were our power base in America, will be the first to come out against us,” Olmert said, “because they will say they cannot support a state that does not support democracy and equal voting rights for all its residents.”

The Israeli public seems inclined to put this proposition to the test by installing into power a party that rejects retreating from any settlements anywhere, operating in coalition with some further-right parties. Under Labor and Kadima governments, the continued expansion of settlements was to some extent papered-over with the notion that “everyone knows” many of those settlements will have to go in a peace deal. But in Netanyahu, Israel will find a Prime Minister who’s an avowed supporter of colonizing Palestinian land and whose party depends on strong electoral support from settler communities. Steven Walt agrees with Olmert that U.S. support for such a policy is not likely to last for the long run:

Israel could retain control of the West Bank but allow the Palestinians limited autonomy in a set of disconnected enclaves, while it controlled access in and out, their water supplies, and the airspace above them. This appears to have been Ariel Sharon’s strategy before he was incapacitated, and Bibi Netanyahu’s proposal for “economic peace” without a Palestinian state seems to envision a similar outcome. In short, the Palestinians would not get a viable state of their own and would not enjoy full political rights. This is the solution that many people — including Prime Minister Olmert — compare to the apartheid regime in South Africa. It is hard to imagine the United States supporting this outcome over the long term, and Olmert has said as much. Denying the Palestinians’ their own national aspirations is also not going to end the conflict.

I think this may be a misreading of U.S. political dynamics. Members of congress from both parties have consistently supported Israeli military actions, irrespective of the cost in Arab life or wellbeing, that could be plausibly construed as necessary for the physical safety of Israel’s Jewish citizens. And I don’t think it would be at all implausible for the Israeli government to continue to assert that military control over Israel’s Palestinian population is necessary for Israeli safety. It’s worth recalling that for all the shock and outrage currently associated with the observation that Israel is moving toward permanent entrenchment of an apartheid social and political regime in the West Bank, that the United States stood by apartheid South Africa for quite a long time. What’s more, while I think the argument that Israel’s battle against Hamas is of a piece with the United States’ battle against transnational jihadis is wrong, it’s not nearly as nutty as the argument that South Africa’s battle against the ANC was of a piece with the United States’ battle against international Communism was.

It’s not clear to me how stable U.S. support for Israel would be under those conditions, but I think it would be a serious mistake to assume that it’ll just melt away suddenly. Many will see the situation as regrettable, but see the Arabs as primarily “at fault” and the perpetuation of situation as necessary for Israeli security. Olmert frets about the impact on American Jewish public opinion which is, generally speaking, liberal and inclined toward human rights but Israel can also count on many friends on the American right-wing which has never taken human rights or equality issues seriously. A determined non-violent Palestinian campaign of resistance could cause public sympathies to flip, and certainly an apartheid Israel will pay an increasing price in its relations with Europe and Asia, but I think Bibi Netanyahu’s faith in his ability to sustain U.S. political support may not be mistaken.