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Little BIG Video #38 Strategy: The Story is More Powerful than the Brand
You know the drill
BACK in June, federal judge Martin Feldman blocked the Obama administration's order to temporarily suspend operations at drilling rigs in the Gulf of Mexico pending an investigation into the causes of the Deepwater Horizon catastrophe. Mr Feldman found the Interior Department order arbitrary and capricious, because it suspended drilling at all wells deeper than 500ft, rather than using a more narrowly tailored rule: "The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger." Such an anxiety, Mr Feldman held, was irrational. Why the 500ft metric? If you didn't know what caused the Deepwater Horizon explosion, why would you think that other rigs, particularly those in shallower waters, were unsafe?
Then again, if you didn't know what caused the Deepwater Horizon explosion, why would you think other rigs were safe?
NEW ORLEANS, La. (AP) — The Coast Guard is saying that a mile-long oil sheen is spreading from the site off an offshore petroleum platform that exploded in the Gulf of Mexico off Louisiana...
The platform was in about 340 feet of water, considered shallow water and far less than the roughly 5,000 feet where BP's well spewed oil and gas for three months after an April rig explosion.
Would the Interior Department order, had it gone through, have suspended operations at the Vermilion South rig? No. Was the Interior Department's fear that rigs in water much shallower than the Deepwater Horizon might also be at risk irrational? "Arbitrary and capricious"? The second explosion at a Gulf of Mexico rig in six months, this time at one in shallow water, suggests that it was not.
The extremists lose control
I HAVE spent the last 18 years being disappointed by expectations of a peace agreement between Israel and the Palestinians, and you'd think I'd have learned better by now. Maybe I've had too much coffee or something this morning. But something happened yesterday that, to my recollection, has never happened before, at least not with such clarity: in the midst of direct negotiations between Israel and the Palestinian Authority, a deadly attack took place, and rather than call off the talks, both sides resolved to keep going. In fact, they both explicitly characterised the attack as an attempt to sabotage the talks, and insisted they wouldn't be sidetracked.
During Binyamin Netanyahu's first term as prime minister, in the 1990s, Palestinian terror attacks led to the cancellation of talks with depressing regularity. Just as frequently, Israel would stage aggressive attacks on Palestinian targets in the midst of negotiations, and the PA would walk out. Each side allowed the other side's most extremist elements to hold veto power; all they had to do was a stage a provocation.
The determination, this time, to continue talking despite the deadly attacks by Hamas on Israeli settlers in the West Bank this week looks to me like a big deal. Maybe the motives of the extremists this time were simply too cynically obvious to fool anyone. Hamas explicitly characterised the attacks as an attempt to undermine the Palestinian president, Mahmoud Abbas. In Washington yesterday, Israeli West Bank settlement leader Danny Dayan used the attacks as an excuse to call for the cessation of talks he never wanted in the first place.
Meanwhile, here was Mr Abbas's response: "We do not want any blood to be shed, one drop of blood, on the part of the Israelis or the Palestinians. We want them to live as neighbours and partners forever. Let us sign an agreement, a final agreement, for peace and put an end to a very long period of struggle forever." The PA backed up those words with a massive wave of arrests of Hamas operatives in the West Bank. And Mr Netanyahu's: "President Abbas, you are my partner in peace... I came here today to find a historic compromise. I didn’t come here to find excuses or to make them. I came to find solutions."
Throughout the 1980s, Israel pursued a self-destructive agenda of refusing to negotiate with Palestinians under the slogan "we will not negotiate with terrorists". Yesterday, Binyamin Netanyahu declared he would not allow terrorists to stop him from negotiating. It may not be enough to get a final status agreement. But it's an indication that he's serious.
(Photo credit: AFP)
Excellence Always: the Cruise
Is Glenn Beck's populism terrifying?
COMMENTING sympathetically on Glenn Beck's soporific Saturday plea for a kinder, gentler Christian nationalism, Jonah Goldberg adds this caveat: "I confess, if Beck wasn't a libertarian, I would find his populism terrifying." Why is it, then, that Mr Goldberg is not shrieking like a slasher-flick coed?
Sure, Mr Beck extends ample air time to libertarian-leaning guests. His spooked fans have been cajoled into snapping up thousands of copies of "The Road to Serfdom" (as well as a gazillion dollars worth of overpriced dubloons). The veteran pothead has even toyed publicly with legalising grass. However, if Mr Beck's libertarian streak, such as it is, is all that keeps his demos-whispering puppetmastery from reducing Mr Goldberg to a quivering heap, it seems to me this weekend's pageant of platitudes should not have been reassuring at all.
Mr Beck offered the placid throng an insipid stew of mildly uplifting flag-swaddled God-talk, Bob Hope troop fluffing, "America is the promised land" crypto-Mormonism, and weird "only you can prevent the Eschaton" civic exhortation. This certainly does not strike me as the sort of production one would mount to promote across-the-board legalisation of capitalist acts between consenting adults. Of course, no one ever suggested Mr Beck is the second coming of Murray Rothbard. Still, Saturday's patriotic pray-in strikes me as precisely the sort of production one would mount to summon and inspire the most staunchly conservative of the nation's strangely aggrieved religious, white, middle class whilst trying hard not to arouse alarm.
Mr Goldberg sees it differently, I presume, because he is convinced that a call to the defence of our heaven-kissed American heritage is ipso facto a call to the defence of liberty. I am not so sure. Those whose souls sing to the message of providential American exceptionalism and misty non-denominational pieties are also those most likely to support the use of force to impose conservative morality at home and Western-style democracy abroad. I suspect the tens of thousands who answered Mr Beck's call emerged predominantly from the ranks of those who vigorously defend Arizona's nativist crackdown, who are trying to shout down the so-called "ground-zero mosque", who have cast Barack Obama as a pretender bent on destruction, and who continue to support the strafing of innocents abroad with taxpayer-funded remote-controlled death kites. And I suspect few of them see dishonour in any of it.
In the end, Mr Beck's personal libertarian streak is simply irrelevant if his populism is pitched to and invigorates some of America's most conservative and least libertarian voters. But Mr Goldberg should take heart. Canada is nice this time of year.
(Photo credit: AFP)
Does anyone want to send more troops to Iraq?
THE reaction of partisan magazines on either side to a speech by a president of the other party is a fairly ritualistic exercise, in the modern media era. There's not much point wondering whether conservative outlets are going to welcome a speech by Barack Obama. But it's worth reading them to see what the terms of the rejection will be. It wasn't entirely predictable, for example, that National Review Online would react to Mr Obama's speech last night by calling for America to send more troops to Iraq.
President Obama praised the performance of Iraqi troops, but we don’t know yet how they will perform under continued assault with only 50,000 U.S. troops on the ground. A more substantial ongoing U.S. troop presence would give us additional leverage to promote the Iraqi army’s professionalism and guard against extra-constitutional adventurism on its part (not unknown in that part of the world).
On the substantive level, I find this pretty remarkable. What the editors seem to be saying is that elements of the Iraqi Army may be tempted to stage a coup, and that, while a mere 50,000 American troops may be insufficient to deter such a move, more (75,000? 100,000?) might do the trick. I think this misunderstands the threat to Iraqi democratic government, which comes not from 1970s-style plotting cadets, but from the risk of a collapse of political factions into an authentic civil war. But it would be truly ironic if American forces were ordered to stay in Iraq to protect its American-sponsored government from its American-trained military. "As they stand up, we will...have to keep standing up." Meanwhile, on the political level, I'm curious whether there's any constituency that wants to see more troops sent to Iraq.
Partisan reactions to speeches by presidents of their own party aren't entirely random, but there's somewhat more play there. In particular, liberal media outlets have spent the past couple of months largely debating what Mr Obama has done wrong. So it's worth noting that most liberal pundits appear to have liked the speech. In terms of specific points, Kevin Drum and Matthew Yglesias were both reassured to sense a global strategy of gradual disengagement from debilitating foreign wars, in order to focus on investment in America's economy and society. The Nation's John Nichols didn't like the speech; he thinks 50,000 troops is still too much, and that Mr Obama would have won more Democratic votes this fall with a larger withdrawal. That doesn't seem particularly convincing to me. But, while conservatives seem to be winning most of the political battles lately, my sense is that most Americans are not eager at the moment to commit more troops or money to foreign wars, and that it would be a surprising mistake for conservatives to identify themselves with that platform.
Why health care is different
AUSTIN FRAKT lists a few reasons why people say "health care is different." He says that while each individual difference has something in common with other kinds of goods, the combination is pretty unique. Ezra Klein thinks Mr Frakt forgot the two biggest ones*:
First, if you don't get good health care, you might die. That makes it hard for individuals to say no to things, it makes it hard for insurers to resist the backlash that comes when they say no to things, and it makes it hard for government to say no to things. And second, most health-care costs are subsidized by a third-party (employers for most of us, taxpayers for seniors and the poor), which means the people receiving the benefit aren't feeling the cost. Any others?
I'd say this still leaves out the first way I ever heard someone describe health care as different from most other goods: generally speaking, people want to consume as little of it as possible, unless they have to.
This actually has a fair amount in common with the auto-repair business. Mr Frakt mentions that the auto-repair business is also similar to health care in that your mechanic knows more about your car than you do. And indeed, both of these sectors are widely resented by their customers, who see them as riddled with dishonesty and perverse incentives. In both businesses, practitioners spend a lot of time convincing customers to buy things they don't want and aren't sure they need. And the combination of lack of customer desire and information asymmetry leads practitioners to overcharge for some services in order to subsidise other necessary, but unpopular services. The two are unlike each other in that the percentage of repair expenditures that takes place in the last month of a car's lifetime is usually rather low, and this is in large measure because you can always buy another car.
*Update: Mr Frakt writes to point out that he did say in his original post that the life-and-death issue makes health care completely different. Which isn't surprising, given his long and expert contribution to the health-care debate over the past two years. His further post is worth reading in full.
Recent Books from our Cool Friends
Mission statement
ACCOMPLISHED or not, the combat mission in Iraq is over. Barack Obama will declare as much tonight when he addresses the nation from the oval office. In his speech, Mr Obama will claim to have fulfilled a promise by removing American combat troops by the end of the summer and bringing the war to a "responsible end", a phrase that risks haunting the administration like George Bush's infamous banner. And what about Mr Bush? Will the president acknowledge that his predecessor's "surge" is at least partly responsible for Iraq's relative stability? Either way, Republicans will have a field day.
As president, Mr Obama is afforded the opportunity to present his own narrative of Iraq, a war he did not support. And in excerpts released early, one sees tinges of regret nestled between more forceful expressions of American pride. Mr Obama will likely try to conjure America's can-do spirit, then redirect that confidence to his efforts in Afghanistan and on the economy. Those two concerns will more directly impact his own fate and present challenges as momentous as the war he is concluding.
(Note: the colours denoting different contributors to the live-blog aren't showing up. We'll fix this as soon as possible - Ed.)
8:20: All in all, a nice speech by Mr Obama. Hit most of the right notes.
8:19: Agreed, though "they are the steel in the ship of our state" was a little much.
8:19: Call me a shallow booster, but that part about troops coming home, from the predawn dark to the excerpt below, was great prose. Just beautiful. Very affecting.
8:18: "Who fought in a faraway place for people they never knew"—that's some beautiful iambic hexameter right there.
Programming note
YOUR humble correspondents will be live-blogging the president's oval-office speech on Iraq tonight. The mission will be accomplished at 8pm EDT.
Zoning out
WASHINGTON is a city that is crippled by poor zoning regulations. I grew up there, and I know this to be true. There was, for example, not a single commercial establishment of any kind within a mile of my house in northwest DC. Peace and quiet. Utter tedium. Or, actually, there was one. Broad Branch Market, a little family-owned grocery catty-corner from the elementary school, had been established in a saner time, the 1920s I think, and was, to judge by its lonely commercial presence in an all-residential neighbourhood, grandfathered in.
Now, here's how bad zoning restrictions in DC are. I started this post expecting to write a response to another blogger's missive on DC zoning regulations, so I wrote that schlocky intro. Then I looked up Broad Branch Market to find out whether it really had been grandfathered in. I quickly found that the market closed down in the recession of 2002, and that the property was bought in 2004 by a developer named Lewis Bloom who clearly realised that having the only grocery store in a half-mile radius is a solid proposition. And, when he tried to renovate and expand the grocery in 2006, Mr Bloom had to wait eight or 18 months (the article isn't quite clear) to get approval from the DC Department of Consumer and Regulatory Affairs, and he's furious at them. (The DCRA says its process wasn't the holdup.)
I get the sense that I could basically look up any significant building from my childhood in DC, and the first thing I'd find would be an article in the Northwest Current complaining about zoning restrictions. Perhaps this is not that unusual in developed cities. But on to my next point.
Since leaving Washington I have lived in a number of other cities. One of them was a large, historic and attractive city in a poor country with an extremely rapidly-growing economy. (During the years I lived there, per capita GDP nearly tripled, and I'm not that old.) The other thing about this country was that, like many poor countries, it effectively had no zoning regulations, or really any construction regulations at all. The regulations existed, but they were almost universally ignored. Your neighbour could decide to build a 15-story office building that abutted your house and have the construction crews work on Sunday mornings at 4am: no problem. I lived in a house in what had been a flower-growing village next to a lake, before the city gradually absorbed it. The village had been there since at least the 1700s, and when I moved in, some of the houses were art-deco stucco fusion architecture from the 1930s-50s.
Feminism is for everyone
OVER the past two years Sarah Palin has shown several streaks of apparently accidental genius. Among them are an unusual facility for branding and an uncanny ability to bedevil Democrats. The latest manifestation of these powers has come during this year's mid-term campaigns, as she has explicitly presented herself as a feminist politician, and traveled the country touting a pack of her preferred "mama grizzlies". Writing in yesterday's New York Times, Anna Holmes and Rebecca Traister argue that Mrs Palin has no grounds to "co-opt" the feminist mantle, and that progressives should be mad at themselves for letting a conservative, pro-life, Glenn Beck buddy like Mrs Palin become "the 21st century symbol of women in politics."
The authors are on to something. This is only anecdotal, but trawling around during the 2008 Democratic primaries, for example, I met hundreds of white guys who were excited about the idea of having a black president, and only a handful who spontaneously expressed excitement about the other history-making prospect in the race. Women were more keen on having a woman as president, but often sheepish about expressing it, particularly younger women.
The popularity of Mrs Palin's "mama grizzly" campaigning suggests that there is, as Ms Holmes and Ms Traister put it, an "obvious national appetite for female leadership." And they are right that Mrs Palin is making more hay of that than Democrats are, despite her goofy rhetoric about oxen in lipstick, and despite the fact that the majority of women in elected office are Democrats. It's no wonder that progressives are frustrated about it.
With that said, I can't get on board with the suggestion that Mrs Palin is a fake feminist:
Ms. Palin, in turn, has been making a greedy grab at claiming feminism as her own. She recently marked the 90th anniversary of the 19th Amendment by expressing her gratitude “to those brave feminist foremothers who struggled and sacrificed, endured imprisonment and ridicule...to grant future generations of American women a voice.” On the same day, she sent out this Twitter message: “Who hijacked the term ‘feminist’? A cackle of rads who want 2 crucify other women w/ whom they disagree on a singular issue.”
The hijacking accusation goes both ways. Ms. Palin’s infuriating ability to put a new twist on feminism—after decades of the word’s being besmirched by the right and the left—allows her to both distance herself from and accentuate the movement’s maligned reputation. Her new spin, of course, is that she does not support policies that move women forward.
The authors are taking a rather narrow view of "policies that move women forward." It's not like Mrs Palin supports human trafficking. There exist, of course, conservative feminists and pro-life feminists. This op-ed seems to posit a litmus test over reproductive rights—the "singular issue" to which Mrs Palin refers. That's way too narrow.
(Photo credit: AFP)
Inequality, the crisis and government, ctd
MY COLLEAGUE thought our discussion about where to locate the causes of the financial crisis had left the issue of inequality behind. I didn't really think it had. I may have misunderstood what he was arguing, both in his initial post and in his reading of Raguram Rajan, but this is the thrust of the argument as I understood it: "this is a story about how policies intended to reduce inequality had the unintended consequence of precipitating America's worst economic slump since the Depression." To put it another way, I think what we're talking about is this proposition:
One of the major causes of the financial crisis was government attempts to use housing policy to redress growing income inequality.
Mr Rajan's formulation here was of a "tsunami of money directed by a US Congress, worried about growing income inequality, towards expanding low income housing." I don't know what Mr Rajan is referring to exactly. My colleague offers some references to studies that suggest a major government role in the housing bubble. Some of those I found pretty interesting and convincing. But some, I think, aren't really relevant.
The Little BIG Things Synopsis Series, Introduction
What if stimulus works, but we can't do it?
MEGAN MCARDLE does some back-of-the-envelope math on how much stimulus might have been required to get to full employment, and then asks a sort of comfortable-uncomfortable question for Keynesians:
What if Keynesian stimulus works, but no one can ever actually afford to do it, short of something like World War II, where the government can tap into a patriotic outpouring of national savings by issuing bonds with negative real yields.
It's comfortable-uncomfortable because, like finding out that your old flame really would have been happier if she'd married you instead of that rich jerk, it grants that your view of the universe could be correct but useless at the moment. I've had a similar comfortable-uncomfortable Keynesian question kicking around my head for a while:
What if Keynesian stimulus works, but only if your country doesn't already have too much debt and future obligations piled up at the moment you need the stimulus? And, owing to the profligate policies of previous administrations, you happen to have too much debt and future obligations piled up right now...and you need the stimulus?Paul Krugman had a heated back-and-forth with Kenneth Rogoff and Carmen Reinhardt this summer over whether or not there's any evidence that debt-levels equal to 90% of GDP is the point at which such an effect kicks in. But almost everyone seems to acknowledge that whatever that point is, it probably exists, and it'll be hard to tell whether we've hit it except in retrospect. Regardless of the answer to the question, I don't think our response to the budget crisis should involve firing hundreds of thousands of public-school teachers, and I feel like if we were really running up against a point where it might get hard to borrow, we'd probably see some warning of that in the bond markets. But of course bond markets have been known to abruptly change their minds.
Scenes from the rally
LIKE my colleague, I walked down to the Mall on Saturday to listen to Glenn Beck and Sarah Palin address the thousands of supporters who gathered around the Lincoln Memorial in the muggy summer heat. And, like my colleague, I found the event to be generally positive and non-political, on the surface at least. Of course, if the gatherers hope to "restore America's honour", they must believe someone has tarnished it. If they want to "take the country back", they must believe someone has taken it away. And if they are the "real Americans", then what is everyone else?
For many in the crowd, their disgruntlement went beyond the normal sense of alienation that one feels when their favoured political party is out of power. These folks feel like they're witnessing a nation-altering event, and they blame the president and his policies for moving the country closer to socialism, or communism, or something equally terrifying. Robert McCartney of the Washington Post has a good write-up of some of the "exaggerated thinking" that he encountered at the rally, and while my experience was vaguely similar, the people I talked to were more tethered to reality. One polite man criticised government workers for eating up his hard-earned dollars. He calmly claimed that 50% of the labour force is employed by the government (it's actually closer to 17%) and that they were only "pushing paper". I did not mention that his son, a soldier, was technically a government employee. Another man came over and provided a Randian analysis of the economic environment, referencing "Atlas Shrugged" and claiming that producers would stop producing if taxes continued to rise. I pointed out that Barack Obama had, to this point, actually lowered taxes for most workers, but this did not faze him. I then asked how the deficit, a priority for both men, could be lowered without higher taxes. One man offered that supply-side policies would lead to greater government revenue, while the other wanted to lower spending. What spending? Earmarks.
In this sense, it was not much different from most political rallies, where enthusiasm is in greater supply than sound policy prescriptions. But it was somewhat disturbing how arguments in favour of generally acceptable principles—balancing budgets, cutting wasteful spending, reasonable taxation—seemed to rely on incorrect information that only served to exacerbate the toxicity of the debate. And I couldn't help but think that much of the fault for this dynamic lies at the feet of the rally's organiser, who "educates" his audience at a chalkboard every night.
(Photo credit: AFP)
The Little BIG Things, Compressed Edition!
New Audio: Tom Reads The Little BIG Things
Government at the heart of the crisis
I'M FINDING the exchange on the financial crisis illuminating in a number of ways, but especially as it lays bare the ideological assumptions and motivations we each bring to these questions. In his latest assay, my esteemed colleague seeks to absolve government from any significant responsibility for the meltdown. (We seem to have moved beyond the question of inequality, which is fine by me.) Having concluded that "the CRA was largely irrelevant" and that "Fanny and Freddie were also-rans", he finds it "hard to understand how one could put government at the heart of the crisis." Let me try to help.
I find Vernon Smith (a brilliant Nobel laureate) and Steven Gerstad's thumbnail account of the bubbly run-up to the crisis compelling:
[T]he largest [housing bubble] in U.S. history started in 1997, probably sparked by rising household income that began in 1992 combined with the elimination in 1997 of taxes on residential capital gains up to $500,000. Rising values in an asset market draw investor attention; the early stages of the housing bubble had this usual, self-reinforcing feature.
The 2001 recession might have ended the bubble, but the Federal Reserve decided to pursue an unusually expansionary monetary policy in order to counteract the downturn. When the Fed increased liquidity, money naturally flowed to the fastest expanding sector. Both the Clinton and Bush administrations aggressively pursued the goal of expanding homeownership, so credit standards eroded. Lenders and the investment banks that securitized mortgages used rising home prices to justify loans to buyers with limited assets and income. Rating agencies accepted the hypothesis of ever rising home values, gave large portions of each security issue an investment-grade rating, and investors gobbled them up.
Why did investors gobble them up? Peter Wallison says:
Mortgage brokers--even predatory ones--cannot create and sell deficient mortgages unless they have willing buyers, and it turns out that their main customers were government agencies or companies and banks required by government regulations to purchase these junk loans. As of the end of 2008, the Federal Housing Administration held 4.5 million subprime and Alt-A loans. Ten million were on the books of Fannie Mae and Freddie Mac when they were taken over, and 2.7 million are currently held by banks that purchased them under the requirements of the Community Reinvestment Act (CRA). These government-mandated loans amount to almost two-thirds of all the junk mortgages in the system, and their delinquency rates are nine to fifteen times greater than equivalent rates on prime mortgages.
Perhaps my colleague can point out the error in Mr Wallison's learned synopsis, in which the CRA and the GSEs appear to play more than "largely irrelevant" or "also-ran" roles.
Seven questions for Jay Rosen
JAY ROSEN is a professor of journalism at New York University and an insightful critic of the media. Earlier this year he wrote an essay on "the actual ideology of our political press", which we praised and discussed on this blog. Mr Rosen has a blog of his own, PressThink, and his work has been published in Columbia Journalism Review, the Chronicle of Higher Education, the New York Times, the Washington Post, and others. He has also written a book, titled "What Are Journalists For?", about the rise of the civic-journalism movement. This week we asked him some questions over email about the press and its failings.
DiA: What is the biggest problem with the news media in America today?
Mr Rosen: The cost of changing settled routines seems too high, but the cost of not changing is, in the long term, even higher. A good example is the predicament of the newspaper press: the print edition provides most of the revenues, but it cannot provide a future. I know of no evidence to show that young people are picking up the print habit. So if the cost of abandoning print is too high, the cost of sticking with it may be even higher, though slower to reveal itself. That's a problem.
Another example is the decline of trust. In the mid-1970s over 70% of Americans told Gallup they had a great deal or fair amount of confidence in the press. Today: 47%. Clearly, something isn't working. But revisions to the code of conduct that has led to this decline would be seen by most journalists as increasing the risk of mistrust. I've tried to argue that the View from Nowhere—also called objectivity—should be replaced by "here's where we're coming from." That strikes most people in the American press as dangerous and unworkable. But the current course is unsustainable: trust continues to decline, with a big acceleration after 2003. When I mention this to journalists, they say: "Trust in all big institutions has declined, Jay." Which is true (except for the military). But is that really an answer? You're supposed to be the watchdogs over dubious actors. Why aren't you an exception?
I could go on, but I think you see the pattern. Change is too expensive; the status quo is unsustainable.
