I just watched Robert Gibbs go through an incredibly frustrating debate over whether or not the criteria President Obama has laid out for judges means he’s going to appoint some of the dread “activist judges” to the Supreme Court.

I wish progressives wouldn’t be so defensive about this. The idea of an “activist judge” is something that was cooked up by white supremacists in the 1950s and 60s who didn’t like judges bossing people around and telling them they had to let black people vote and go to school. To me, frankly, it’s a bit shocking that modern-day conservatives are still so eager to associate themselves with the legacy of the racist backlash of a couple of generations ago.

The term is nonsensical on its face. Is the idea that judges should be passive? Just not issue rulings on constitutional questions? That’s absurd. Is the idea that judges should never strike down laws as unconstitutional? For one thing, conservative judges do it all the time. But more importantly, why would we have a system of judicial review if the ideal of judging was to never strike a law down? It’s a nonsense debate. As no less a figure than William Rehnquist explained in a memo written when he was in the Nixon justice department “A judge who is a ‘strict constructionist’ in constitutional matters will generally not be favorably inclined toward claims of either criminal defendants or civil rights plaintiffs—the latter two groups having been the principal beneficiaries of the Supreme Court’s ‘broad constructionist’ reading of the constitution.” I think it’s fair to have a real debate about this, but let’s not BS around about “activists” and “strict construction.”

Washington Post article on the hedge fund holdouts who forced Chrysler into bankruptcy is headlined: “In Chrysler Saga, Hedge Funds Cast As Prime Villain: Firms Say They Were Right to Hold Out”.

I was interested to see what kind of argument the firms would be able to mount for the proposition that their actions were “right,” which I take to be a term connoting something like “ethical” or “morally justified.” It turns out, however, that they mean something rather different:

“Some of the characterizations that were used today to refer to us as speculators or to say we’re looking for a bailout is really unfair,” said one executive who spoke on condition of anonymity because of the sensitivity of the matter. “What we’re looking for is a reasonable payout on the value of the debt . . . more in line with what unions and Fiat were getting.”

George Schultze, the managing member of the hedge fund Schultze Asset Management, a Chrysler bondholder, said, “We are simply seeking to enforce our bargained-for rights under well-settled law.”

They’re not actually saying that what they did was right. Rather, they’re saying that it was selfish but also legal. Which is fair enough. People aren’t allowed to just do any old selfish and greedy thing they like. You can’t break into my house and steal my TV. But the law does afford wide latitude for the impulses of selfishness and greed. So one is within one’s rights, under certain circumstances, to insist on one’s ability to inflict suffering on vast numbers of people in order to make more money for your rich self and your rich clients. But it seems very odd to characterize it as “unfair” to be subjected to moral criticism for one’s conduct.

This, however, is one of the signal properties of our age. It’s one thing to model human activity as driven solely by the relentless pursuit of money. Such models can enlighten various situations. But it’s another thing entirely to actually recommend such a lifestyle as optimal or moral, or to make the claim that any conduct that rationally serves the goal of increased personal wealth is therefore “right” or that to criticize self-interested and socially destructive behavior is “unfair.” I think Obama is to be congratulated for his handling of the situation. He didn’t have the FBI storm in, guns blazing, and take these people’s money. He respects the law. He respects property rights. He’s going to go through the bankruptcy process. But he also didn’t respect the ethic of greed that’s come to dominate American public life. He reserved the notion that some conduct is wrong and worthy of criticism and held out the ideal that selfish people might someday be motivated not only by acquisitiveness but by some kind of shame and a desire to behave—or, at a minimum, be seen as behaving—in a public spirited manner.

Reclaiming the idea that there are ethical issues in life that don’t relate to gay marriage or abortion will be an uphill struggle, but it’s an important one.

David Leonhardt, interviewing Barack Obama, asked the president about trying to limit the scale of banks to which Obama replied “I’ve looked at the evidence so far that indicates that other countries that have not seen some of the problems in their financial markets that we have nevertheless don’t separate between investment banks and commercial banks, for example.” Leonhardt intervened and said “Like Canada?” And then Obama said “Canada being a good example. And they’ve actually done a good job in managing through what was a pretty risky period in the financial markets.”

This is all well and good, but aside from being financial supermarkets, the Canadian banking situation is really extremely different from ours.

The Canadian financial sector is dominated by the “big five” banks that all enjoy “tier one” regulatory status. And while these banks are financial supermarkets, and they’re quite big relative to Canada, Canada is a relatively small country so the banks themselves are modestly sized compared to the largest American financial institutions. So when considering the relevance of the Canadian model to the question of whether or not the United States is interested in limiting bank size we need to try to be clear on what we’re envisioning. The US is about ten times the size of Canada.

If we’re envisioning a sector dominated by fifty financial services supermarkets each of Canadian-style size, then we really will need to break up some of the existing conglomerates. But if we’re talking about consolidating the United States into five financial supermarkets, then we’re talking about making some banks much bigger than current American institutions. Alternatively, if we’re not talking about doing either of those things then we maybe need to ask ourselves how relevant this Canadian example is.

Another point is that one issue any country is going to face if it implements Canadian-style levels of regulation is that bank managers will complain that they’re being rendered internationally uncompetitive. In Canada, this is addressed through regulatory limits on the extent to which foreign banks can compete with Canadian banks, on restrictions on foreign ownership of Canadian bank equity, etc. I haven’t heard anyone in the United States talk about doing anything like that. Which is, I suppose, fine. But as I understand it those limits on international competition are integral to the sustainability of the Canadian banking model. So if we’re going to reject them, then we need to put it aside as a good analogy of what we’re aiming at.