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Links 1/27/10

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Warning: Your Cell Phone May Be Hazardous to Your Health GQ

Is Bernanke Hiding A Smoking Gun? Ryan Grim, Huffington Post (hat tip reader Betsy). There appears to be something sus, but we don’t know what yet.

Finance: The hindered haircut Henny Sender, Gillian Tett and Francesco Guerrera, Financial Times

Courts as Battlefields in Climate Fights New York Times

Taleb vs Asberger’s Syndrome Sorts Paul Kedrosky

Financial Services: From Servant to Lord of the Economy Jesse

Chinese Trade Elasticities, Updated Econbrowser (hat tip reader Paul S)

The Quarrel Over Bernanke New York Times. Your humble blogger is the only one in the opposition. Boy, how economists circle the wagons.

Antidote du jour:

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29 comments

  1. fresno dan

    “The Quarrel Over Bernanke New York Times. Your humble blogger is the only one in the opposition. Boy, how economists circle the wagons.”

    Astounding.
    But I think it is understandable if one likens economics to religion, and not science. Economists have beliefs, based mostly on hypothetical assumptions (i.e., faith). Reason, reality, logic is not going to be able to disuade them. I can relate – I have read a lot of economics (Adam Smith seem compelling to me). It is difficult to acknowledge that one is wrong, that one’s analysis of theory missed all sorts of variables that are critical to the outcome.
    I have no doubt that all those guys supporting Bernanke are smarter than me. My only advantage is that I’m an agnostic.

    1. VacantHomes

      Oop, good catch. (At first glance it looked like Kuttner was leaning in favor.)

      There was a great comment on a huffingtonpost article (by Nicola Nanchez supporting confirmation), reminding me that most of the arguments in favor of confirmation have been pretty lightweight, none of them even offering up the possibility that there are other intelligent and ethical people (such as Volcker) who could take this job –

      “Nicola Nanchez is a civil servant in Obama’s government and she should not have the right to glorify her boss while being supervised and paid by him. She should be reprimanded for commenting on policy or personnel while a public servant, unless called upon to do so. If she quits government service, she can shoot off her mouth all she wants.
      The continuation of Summers, Geithner, Bernanke and other bankers should not be an issue of Party affiliation or ideology. It is a matter of continuation of our form of government. The argument that an office holder is indispensable is a specious argument made by the agents of authoritarian rule. There is no place for such clap trap in a democratic society—declining organization or not.”

      http://www.huffingtonpost.com/victor-williams/the-case-for-recess-appoi_b_435647.html?show_comment_id=38812984#comment_38812984

  2. fresno dan

    Finance: The hindered haircut Henny Sender, Gillian Tett and Francesco Guerrera, Financial Times

    “Still, the Maiden Lane saga has laid bare one of the main reasons why the credit crunch of 2007 turned the following year into virulent turmoil, knocking the global economy off course. By paying AIG’s counterparties in full, the Fed sidestepped one of the thorniest issues facing financial markets: how to value securities that were so complicated that no one – not the credit agencies, not the bankers, not the issuers themselves – knew how to price them.”

    Sputter…#@&&#!!!
    Also, left out Fed and Treasury people, who had no idea either, but decided to put out the fire by shoveling taxpayer’s money on to it.
    Ben: how much money should we shovel?
    Hank: as much as possible – its not mine!!!

    Again, the problem I have is not necessarily that all involved are evil – its the continued lack of humility. You can’t start learning until you admit that you don’t know.

  3. Skippy

    Dear kindhearted Yves and Co

    We have not a economical problem, we have a people problem…eh…Fix the people part and then we will get some where…unlock the human potential…

    Skippy…how will we be when confronted with our failings as humans…denial or…projecting anger in defense of un-justifiable self interest.

  4. i on the ball patriot

    The link to Naked Capitalism in the Bernanke Slimes article gives you a “page not found” screen. What’s up with that? Protecting the marks from the rabble rousers?

    Deception is the strongest political force on the planet.

  5. Francois T

    “Boy, how economists circle the wagons.”

    Blimey! Quelle surprise! :-D

    It couldn’t possibly due to this, right?

    The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

    This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists.

    1. DownSouth

      Francois T,

      Great stuff.

      Economists are organized in a priesthood.

      What is transpiring now reminds me of what happened in Spain and its American colonies in the 16th century. With the advent of the Renaissance, the Church actually had a number of humanist priests and they enjoyed some influence in policy decisions regarding the governing of the American colonies. The humanist priests, members of the mendicant orders, were the first to arrive in Mexico and were adamant in their belief that the Indians were human. They were thus, much to the chagrin of the conquistadores, great defenders of the rights of the Indians.

      This situation could not stand. The mendicant priests, the first to arrive in 1524, were slowly replaced by secular priests who were more amenable to the enslavement and exploitation of the Indians.

      Christian Duverger in Agua y Fuego: Indigenous Religious Art of Mexico in the 16th Century relates the end of the era of the mendicant priests and their role as defenders of the indigenous peoples of Mexico:

      King Phillip II, son of Charles V, will impose in America the hard colonial line: economic dependence, hispanisization, and massive supervision. On January 25, 1569 the Spanish monarch signed the order instituting the Inquisition in Lima and Mexico. All those who had up until then managed to run from the post-Isabella intolerance of Castile are pursued to the ends of the earth and captured….

      Moya de Contreras, the inquisitor chosen by the king, arrived in Mexico in 1571 and solemnly assumed his functions on the fourth of Novemeber. Two years later, with the death of Montufar, he converted into the archbishop of Mexico. In 1584 he is named viceroy of New Spain. This combination of functions could not be more explicit: the Inqusition will reign. In 1585 Moya de Contreras, the archbishop-inquisitor-viceroy, called a council of the Mexican Church to humble the mendicant orders and insure their adhesion to the political power of the Church. With this he turned the page on the era of any concern for the indigenous peoples. Moya will be compensated in Spain by being made the president of the Council of the Indias.

      1. Doug Terpstra

        I recall a haunting movie “The Mission” (La Mision) about the struggle you describe in S. America, with Robert Duvall I believe.”The enslavement and exploitation of the Indians” was done for their own good of course, saving them idleness and perdition, just as the Protestant church up north altruistically promoted the divine right of slavery.

        This economic priesthood is surely in collusion with the black-robed supreme high priests here who recently signed the official death certificate of democracy from their columned capitol temple.

        1. DownSouth

          The celebration of unbridled greed and selfishness is something that the modern orthodox economist has in common with the secular Catholic priesthood of the 16th century. But the plunder economy it inspires is, I believe, in the long run not economically viable.

          As J.H. Elliot explains:

          During the 1590s the boom condions (in Spain) of the preceding decades came to an end. The principal reason for the change of economic climate is to be found in a demographic catastrophe. While the white and the mixed population of the New World had continued to grow, the Indian population of Mexico, scourged by terrible epidemics in 1545-6 and again in 1576-9, had shrunk from some 11,000,000 at the time of the conquest in 1519 to little more than 2,000,000 by the end of the century; and it is probable that a similar fate overtook the native population of Peru. The labour force on which the settlers depended was therefore dramatically reduced. In the absence of any significant technological advance, a contracting labour force meant a contracting economy.

          –J.H. Elliot, Imperial Spain: 1469-1716

          Orthodox economists and their New Atheists allies in the fields of biology and psychology claim that those who are the most selfish and greedy are the most fit (as in “survival of the fittest”). If that is so, then one must wonder why those who are selfish and greedy represent such a small minority of the human population. If orthodox economists and the New Atheists are correct, wouldn’t the innate human impulses towards empathy, justice, fairness, generosity and altruism have died out long ago? If one believes in natural selection, as opposed to creationism, how does one explain the survival of these traits in the vast majority of the human race?

          1. Doug Terpstra

            “…those who are the most selfish and greedy are the most fit (as in “survival of the fittest”). If that is so, then one must wonder why those who are selfish and greedy represent such a small minority of the human population.”

            True, and of course those societies where the “fittest” predators “survive” (a fitting word) in greatest comparative splendor are generally the most impoverished. Plutocrats there drive sparse and potholed roads, breathe polluted air, live in razor-wire islands of paranoia surrounded by blight and squalor, have few cultural amenities, require armed escorts, armored vehicles, and, were it not for more productive, cooperative societies elsewhere (US until now), would endure primitive technology.

            True too, it is not sustainable, but will we seize the collapse to make an collective evolutionary breakthrough or spiral into another dark age of ignorance and feudal conflict as forseen by Jane Jacobs in Dark Age Ahead?

      2. craazyman

        the plot is thicker even.

        In Spain there were public debates that pitted Church humanists (not presumbaly the Inquisition torturer types) against those who argued the innate superiority of the Spaniards and subhumanity of the locals.

        The facts on the ground in Mexico were more nuanced. The native tribes there, in and around the Aztec kingdom based in Mexico City, practiced a form of warfare amongst each other that would surpass the limits of any definition of savagery. This is what the Spanish encountered and what they relied on, as most colonialists did, to assert power — i.e. playing off one local enemy against the other.

        But the most curious aspect of the whole tableaux was Cortez’s group’s ability to subdue the entire Aztec nation simply through their command of Montezuma, who, as most of us likely know, believed that Cortez was the second coming of Quezequatl (sp?).

        Another unremarked fact was that the sort of ethical debate being conducted in Spain would have been impossible among the native Mexicans. They did not have the concepts, language or moral structure to even recognize the categories of argument.

        Thus it is when the monolithic tribal consciousness encounters a slightly individuated consciousness. This is the entire message of Jesus, so it is not surprising the Church, in a limited way, voiced it through its bureacracy. The formal aspects of a tribal consciousness have been written about by Gebser and others, but it’s a subtle and remarkable phenomenon. In a tribal group consciousness, Shamanic magic physically works, but it does not work on those from outside the dream space. This is a remarkable facet of existence that is only becoming acknowledged and studied, and only on the fringes of thought.

        there is a rope here the falls into the swamp of money, credit, spirit, property and soul substance itself. As a Professor of Contemporary Analyis at the University of Magonia, this is an area of great interest to me. –DT Tremens, PHD, MA Divinity

        1. Valissa

          “Shamanic magic physically works, but it does not work on those from outside the dream space. This is a remarkable facet of existence that is only becoming acknowledged and studied, and only on the fringes of thought.”

          I have come to this conclusion myself through my own explorations on the nature of human belief systems, mostly in religion, philosophy and psychology. But until recently there hasn’t been been any mainstream discussion of such an idea… however there is a new book out titled “Crazy Like Us: The Globalization of the American Psyche” by Ethan Waters that seems to be acknowledging something along those lines. Just got it in the mail and look forward to reading it. I am hoping it will shed light on our political and economic diseased thinking as well.

        2. DownSouth

          ► craazyman said: “The facts on the ground in Mexico were more nuanced. The native tribes there, in and around the Aztec kingdom based in Mexico City, practiced a form of warfare amongst each other that would surpass the limits of any definition of savagery.”

          That is certainly what was argued by the apologists for the plunder economy and the enslavement of the Indians. But, as J.H. Elliot explains, that interpretation is open to debate:

          The degree to which that catastrophe (the die-off of the Indians) was the result of atrocities committed in the course of conquest and of the subsequent maltreatment and exploitation of the indigenous peoples by the new masters of the land was already a source of fierce discussion among Spanish observers in the age of conquest, and has remained so to this day. Bartolome de las Casas’s “Brief Account of the Destruction of the Indies,” first published in Seville in 1552, etched itself into the European consciousness as an unsparing record of the barbarous behavior of his compatriots, and there were others, equally well informed, to second his words. “The Spaniards”, wrote Alonso de Zorita, a judge of the Mexican Audencia, in his “Brief Relation of the Lords of New Spain”, “compelled them to give whatever they asked, and inflicted unheard-of cruelties and tortures upon them.” For others, however, the cruelty lay elsewhere. “It is my opinion and that of many who have had dealings with them”, wrote Bernardo Vargas Machuca in a refutation of Las Casas, “that to paint cruelty in its full colours, there is no need to do more than portray an Indian.”
          –J.H. Elliot, Empires of the Atlantic World: Britain and Spain in America 1492-1830

          ► craazyman said: “Another unremarked fact was that the sort of ethical debate being conducted in Spain would have been impossible among the native Mexicans. They did not have the concepts, language or moral structure to even recognize the categories of argument.”

          Again, I believe that would be very much open to debate. Quoting J.H. Elliot again:

          The result was an intensive effort by a number of friars to understand the history and the customs of the peoples whom they were attempting to indoctrinate. In order to present the gospel, many of them had already laboriously mastered one or more native languages. Several of these languages were transcribed into the Latin alphabet, and grammars and dictionaries were compiled like the Quechua dictionary published in 1560 by Fray Domingo de Santo Tomas. At the same time native informants who still had some knowledge of life before the conquest were asked to interpret and flesh out the pictographic evidence provided by the surviving codices, and to answer carefully constructed questions about ancient practices and beliefs. Fray Bernardino de Sahagun’s great “History of the Things of New Spain,” completed in 1579 in a bilingual text, Nahuatl and Castilian, may have been ethnography with a purpose—the more effective evangelization of the Indians—but it was ethnography none the less. Sahagun and his colleagues in the Spanish mendicant orders were the pioneers in Europe’s attempt to study on a systematic basis the beliefs and customs of the non-European peoples of the world.

          While a growing knowledge of indigenous social and political organization before the coming of the Spaniards evoked admiration in some circles, and provided Las Casas with the ammunition he needed to argue for the rationality of the peoples of America and their aptitude for the gospel, it was insufficient to win over those who saw everywhere around them the footprints of the devil. It was firmly believed that the devil stalked the New World, and everything in native society that allowed him to work his diabolical contrivances had to be systematically eradicated if true Christianity were to ever take root.
          –J.H. Elliot, Empires of the Atlantic World: Britain and Spain in America 1492-1830

        3. i on the ball patriot

          Yes, in a tribal group consciousness, Shamanic magic physically works on those within the dream space.

          But it is no match for the gun toting, hate mongering, heathen hunting, drone bomb dropping, TV instilled, scamerican monolithic tribal consciousness when it descends from the heavens and blows up those tribal Shamanic dream spaces, like in Pakistan and Afghanistan. Seems like every scamerican generation has been wiping out these ‘heathen half breeds’ since day one. Its as scamerican as apple pie.

          I’m hoping Obama will wear a big — real big — white cowboy hat during his speech tonight and stand in front of a statue of Abe Lincoln, the great emancipator — who really fucked up a lot of tribal dream space, and talk about changing all of this hypocritical demonizing and killing bullshit.

          That’s what I hope from the hope and change president.

          Excerpt;

          “Authorities in Minnesota asked President Lincoln to order the immediate execution of all 303 Indian males found guilty. Lincoln was concerned with how this would play with the Europeans, whom he was afraid were about to enter the war on the side of the South. He offered the following compromise to the politicians of Minnesota: They would pare the list of those to be hung down to 39. In return, Lincoln promised to kill or remove every Indian from the state and provide Minnesota with 2 million dollars in federal funds. Remember, he only owed the Sioux 1.4 million for the land.

          So, on December 26, 1862, the Great Emancipator ordered the largest mass execution in American History, where the guilt of those to be executed was entirely in doubt. Regardless of how Lincoln defenders seek to play this, it was nothing more than murder to obtain the land of the Santee Sioux and to appease his political cronies in Minnesota.”

          More here …

          http://www.unitednativeamerica.com/hanging.html

          Deception is the strongest political force on the planet.

          1. Cynthia

            Speaking of tribal groups, after listening to Jake Diliberto of “Veterans for Rethinking Afghanistan” give us his thoughts on Afghanistan (listen to link below), I’ve come to realize that Afghan tribal rights are equivalent to American states’ rights. So I think it’s ironic that most Americans, who favor our war in Afghanistan, tend to be right wingers, who also tend to be strong advocates for states’ rights, but they’d rather see Afghanistan have one strong central government than a multitude of various tribal governments, which are nothing more than Afghanistan’s version of our state governments. And so, I think this reinforces the notion that warmongering right wingers are such bigots that they view Afghans as not being human enough and thus not being worthy enough to be allowed tribal rights.

            http://www.youtube.com/watch?v=Hh9K07rXgKU&feature=player_embedded

        4. DownSouth

          ►craazyman said: “In Spain there were public debates that pitted Church humanists (not presumbaly the Inquisition torturer types) against those who argued the innate superiority of the Spaniards and subhumanity of the locals.”

          The missionaries naturally tended to develop an instinctive sympathy, however patronizing at times, for an Indian population as yet uncorrupted by the many vices of European civilization. Many of them, convinced of the natural dignity and rights of man, found it impossible to square the treatment that was being meted out to the natives with their own fundamental convictions about the status of mankind. “Are these Indians not men? Do they not have rational souls? Are you not obliged to love them as you love yourselves?” These were the disturbing questions asked by the Dominican Antonio de Montesinos in his famous sermon preached in Hispaniola before a congregation of outraged colonists in 1511. They were a great prelude to a great storm of moral indignation which has become associated for ever with the name of Bartolome de las Casas. Converted to the views of Montesinos in 1514, Las Casas was to devote his life to the work of securing fair treatment for the Indians…

          The views of Las Casas aroused the most intense opposition, not only among those with vested interests in the supply of native labour, but also among theologians as convinced as himself of the righteousness of their cause. Chief among these was the great Aristotelian scholar Juan Gines de Sepulveda, for whom the Aristotelian doctrine of natural slavery was entirely applicable to the Indians on the grounds of their inferiority.
          –J.H. Elliot, Imperial Spain: 1469-1716

          Here’s is one of Sepulveda’s comments excerpted from the great debate between him and Las Casas conducted in 1550:

          “It is with perfect right that the Spanish dominate these barbarians of the New World … who are so inferior to the Spanish in prudence, intelligence, virtue, and humanity, as children are to adults, or women to men, that I am tempted to say that there is between us both as much difference as between…monkeys and men.” He concluded that “nothing more healthy could have occurred to these barbarians than to be subjected to the empire of those [the Spaniards] whose prudence, virtue, and religion shall convert the barbarians, who hardly deserve the name of human beings, into civilized men, as far as they can become so.”
          –Carlos Fuentes, The Buried Mirror

          1. Skippy

            Wonderfully thread all!

            May I just add the only two country’s ever to piss off the church’s, China and Japan, but even then they were worn down over century’s.

            Skippy…pure psych ops…eh.

  6. Amit Chokshi

    Why oppose BB? You want to risk Biff and his teabaggers getting into the mix and influencing fools like Kyl and Boehner into putting some other fool up for Fed chairman? We don’t have the competence or intelligence to elect someone that would be appropriate. Cover of the WSJ today discusses Geithner and a poll found that I think half of respondents couldn’t even name him the Treas Sec? At least with BB we’ll have an idea of the rules and we can react accordingly as investors. If things get crazy, pull a Chanos or Paulson and make some money on the downside. It’s also farcical to pretend BB is not a total slam dunk. The faux protest by congressmen and congress women is solely to appease the ham and egger voters that want their next fill of red meat.

  7. Cullpepper

    Oh, ugh. I need to remember to eat solid food before browsing the NYT.

    The best part is reading the user comments after the story, and trying to guess which special interest groups are backing which shills to support (or condemn) Bernanke.

  8. Anonymous Jones

    The cell phone article is preposterous!

    There is no way cell phones are affecting our health…blah, blah, blah…

    If anything, we are getting smarter…blah, blah, blah…not beset with early forms of Alzheimer’s…blah, blah, blah…

    It is so clear that all these “researchers” come from *socialist* countries…blah, blah, blah…isn’t it weird that the US, a freedom loving country, is not among these crazy lunatic states that are trying to bring down our free market in cell phones…blah, blah, blah…these evil, scum-sucking scientists are just trying to increase their own research grants from their evil, socialist apparatchik overlords…blah, blah, blah.

    Obviously, as everyone *knows*, cell phones are good for your health. Next question!

  9. mistah charley, ph.d.

    Re cell phone dangers – although I’ve only skimmed through the article, not read it, it seems not to mention a reasonable precaution which some people I know take – i.e., instead of holding the phone next to your head, using an earbud/headseat with a cord.

  10. Cynthia

    Notice that this piece from the Washington Post fails to mention that the whistleblower at UBS was hauled off to jail for providing inside information to federal prosecutors about how UBS set up a tax evasion scheme, enabling its wealthy clients to evade paying billions of dollars in federal taxes, while top banksters at this firm who were responsible for creating this scheme got off scot-free:

    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012201885.html

    Besides never trusting what you read from the Washington Post, there are two other take-home lessons from this:

    1) If you plan to being a whistleblower while Obama is in power, think again, because his prosecutors are likely to make you into a scapegoat and have you hauled off to jail.

    http://www.democracynow.org/2010/1/7/why_is_the_whistleblower_who_exposed

    2) If you plan on being a top bankster while Obama is in power, make sure that you become one of Obama’s favorite golfing buddies, because in exchange for playing a good game of golf with him, he’s likely to strong arm his prosecutors into getting you off scot-free for your criminal activities.

    http://www.democracynow.org/blog/2009/8/25/who_is_obama_playing_ball_with

  11. Adam

    That cell phone article was ridiculous. No physicist was even quoted.

    All known cancer-inducing agents — including radiation, certain chemicals and a few viruses — act by breaking chemical bonds, producing mutant strands of DNA. Not until the ultraviolet region of the electromagnetic spectrum is reached, beyond visible light, beyond infrared and far, far beyond microwaves, do photons have sufficient energy to break chemical bonds. Microwave photons heat tissue, but they do not come close to the energy needed to break chemical bonds, no matter how intense the radiation. –Dr. Robert L. Park of the American Physical Society (New York Times Oct. 1, 2002)

  12. Richard Kline

    The article from GQ on microwave radiation and its dangers was terrific. ‘Adam’ it’s clear you didn’t bother to read it. Or the research involved on it’s dangers. Your citation as an attempt at refutation is so non-germane, and false on the face of epidemological evidence _and_ the research cited in the article that it’s puerile. Microwave radiation is the “Smoking can’t hurt you” of the 21st century.

    There is a reason I don’t own a microwave oven. Or have wifi in my home. Or have or use a cell phone. (And when finally iPhone, I will definitely use a headset.) Will that save me? No: I’m bathed in the glow of others. But I won’t die stupid in this regard.

    1. Adam

      You don’t understand physics then.

      Are you also afraid on light radiation?

      Would anyone think putting a flash light on your head would lead to cancer?

      No, it might make your head warm, kind of like what microwaves and ovens(infrared radiation) do with food but it does not lead to cancer.

      It is actually ultraviolet and beyond (x-rays, gamma rays, cosmic rays) that are cancer causing.

      http://www.cancer.org/docroot/PED/content/PED_1_3X_Radiation_Exposure_and_Cancer.asp

      This is from the cancer society that clearly points this out.

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