Links 5/25/11

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Volcano ash shuts German airports BBC

Risk From Spent Nuclear Reactor Fuel Is Greater in U.S. Than in Japan, Study Says New York Times

CFTC charges traders over oil price Financial Times

Food-Cost Gains to Quicken as Nestle, Whole Foods Raise Prices Bloomberg

Greek assets could go to ‘fund of experts’ Financial Times

The horror… the horror… FT Alphaville

Greece crisis worsens amid political stalemate Telegraph (hat tip reader Scott)

The Elephant in the Green Room New York Magazine (hat tip reader furzy mouse)

GOP Response To Town Hall Backlash: Ban Recording Devices And Censor Citizen Journalists ThinkProgress. I thought “why do they hate our freedoms” was supposed to apply to Al Qaida.

Politicians Are Abnormally Good Stock Pickers Clusterstock

Top Colleges, Largely for the Elite David Leonhardt. It wasn’t this way in my day. A lot of merely middle and high end of middle class kids went to Ivies.

Public Schools Charge More Fees Wall Street Journal. One of the courses I took in college (because it was by a great professor, not because I was terribly interested in the subject matter) was on the politics of popular education, covering early industrial revolution fights over who should be educated and why. Never in my wildest dreams did I think we’d reopen so many supposedly settled ideas on this front. Shows a certain naivete, no?

Stunning 360 Degree Images of Abandoned Property Sites in Detroit Including the Michigan Central Train Depot Photojpl (hat tip reader furzy mouse)

Justice Department, SEC investigations often rely on companies’ internal probes Washington Post (hat tip reader anon48)

“No Sign of Recovery” in Commercial Real Estate EconomPic Data

New York Fed to postpone Maiden Lane sales: sources Housing Wire

US Financial Institutions Make Accounting Gain of $29 Billion Ed Harrison

Antidote du jour:

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65 comments

  1. rjs

    i spent a half hour on those detroit ruins last night; it gets pretty creepy after you’re there a while…

    could you imagine that happenning to NYC 20 years from now?

    1. Richard Kline

      It’s been 35 years since I was inside Central Depot in Detroit. The city was sick then; in the interim, it’s died. The size of many of the cities of the American Midwest was an accident of this vectors of historical settlement. Many were sure to decline as the continental sweep of the country was settled and population distributed itself. But the strategic location of Detroit is still major. Hence Detroit’s decline is all the more a social eventuality beyond one simply of politics or demograhics, though both surely are part of the cabal of assassins which have done in the Demoted City.

      Lagash. Alakh. Syracuse. Carthgo. Teotihuacan. Tikal. Kwarezm. Mathura. Babylon, Babylon . . . .

      1. rjs

        detroit, toledo, lorain, elyria, cleveland, akron, canton, youngstown, warren, pittsburg, erie, & buffalo…all the same…

      2. jest

        At the bottom of that page there was a link saying “American Cities in Decline” as if it were a tourist attraction, like Athens or Ancient Rome.

        Can you imagine tourists from Asia and Europe taking tour guides of these ruins as if it were Cairo? I can, considering how dire the economy is.

  2. Cahal

    Re: “No Sign of Recovery” in Commercial Real Estate EconomPic Data

    So? Do we really want to inflate another housing bubble? We need a series of mortgage write offs followed by other measures to move away from a Real Estate economy.

    1. MyLessThanPrimeBeef

      Away with real estate economy!

      Welcome our renewed manufacturing economy – in particular the shipbuilding industry.

      First QE1.

      Then QE2.

      Now, coming to you soon, QE3.

      One megaship per year that requires a lot of workers to build.

  3. Tom Hobbes

    Elite universities are going back to their roots after having flirted for a few decades with admitting top students regardless of socioeconomic background. Good breeding, big legacies and all that.

    Public schools are also going back to their roots.

    In fact, everything is regressing back to a time when life was nasty, brutish and short.

        1. Denis

          More like around 1900… when ivy-league schools were more of a club where rich kids could socialize.

    1. MyLessThanPrimeBeef

      I am always impressed when people back up their comments with good examples.

      Here is one.

      Look at the Soviet Union. Their comrades could go to college for free. And so, what happened to that country?

      1. ambrit

        Dear Beef;
        What anyone would expect from a nation that never had a viable middle class or “democratic” political tradition. Given that the US has had both for a couple of centuries, what’s going to be the excuse trotted out by the elites when we start to fall into the same kind of “Wild West” social system. (Social Darwinism also admits the possibility of extinction.)

      2. Community Collegian

        Their comrades were educated so well that they came to the best universities in the West saturating their faculties with superstars from the former Soviet Union.

        The other highly educated comrades that were not academic superstars became mafioso.

        You can’t really blame the educational system for the failure of the Soviet Union. Larry Summers had more to do with it than their educational system.

  4. Gullible Voter

    Correct me if I’m wrong, but don’t politicians take kickbacks in the form of insider stock advice and participation in closed IPOs?

    1. American Лукаше́нко

      What a novel thought. You should get patent on that brand-new-scam to rip off the constituency. Then again, if you were brighter than the mobsters who thunk that one up 49 mili-seconds after the stock market opened centuries ago, then you would have been elected to Congress 99 years ago. Is that a small mechanism compared to the *insider information* mechanism that drives the power of being on more than one board of directors? And these insiders to the 5th power had the gall to indict Rajaratnam? Had the gall to imprison Madcow? Had the gall to imprison shilling?

      Naaah! They are good guys.

      Strictly legit
      !

  5. Jim Haygood

    David Leonhardt in ‘Top Colleges’:

    The last four presidents of the United States each attended a highly selective college.

    Yes, and Bush/Clinton/Bush/Obama have presided over the sinking of the US into insolvency.

    All nine Supreme Court justices did, too.

    … who presided over the de facto suspension of the Bill of Rights.

    Leonhardt’s article is calculated to appeal to the NYT’s insecure, socially-aspirational readers who fight to get their toddlers into the right Manhattan nursery schools.

    But the fact is, highly selective colleges have no monopoly on quality education. Their undistinguished graduates in politics seem to produce spectacularly poor results.

    However, if you want your kids to hobnob with the offspring of America’s political mafia and conventional-minded dullards destined for future CEO-dom, then the Ivy League is definitely your ticket.

    1. College Observer

      It’s certainly possible to get a decent education at an Ivy League university. Most students, however, opt not to. Instead, they spend four years congratulating each other on their superiority.

      1. MyLessThanPrimeBeef

        The same thing happens when a servant wins a popularity contest.

        She spends the rest of the time congradulating himself on her own superority to his ‘supposed’ bosses, especially when she is surrounded by pomp and circumstance.

    2. College Observer

      I might also add that education can be problematic. Education has been known to make people more humane. Being humane puts you at a distinct disadvantage in business and politics and chances of future success. Therefore, the best course is to get a “gentleman’s C” (now a “gentleman’s A”) and learn as little as possible retaining as much sophmoric inhumanity as one can muster. I believe this explains most of your exemplars.

    3. alex

      “highly selective colleges have no monopoly on quality education”

      But they do have a near-monopoly on the perception of a quality education, which unfortunately can be important.

      1. Community Collegian

        No. They don’t. Many community colleges provide a higher quality education. It’s true that you can’t learn advanced Hittite in a community college, but not that many people speak or write Hittite these days.

          1. Community Collegian

            Don’t have a monopoly or near monopoly on the perception of quality. Believe it or not, most of their graduates are seen as useless to the part of the working world that requires skills as opposed to greasy handshakes and haughty manners.

    4. ambrit

      Dear Jim;
      As someone who experienced a dilute form of the aforesaid “hobnobbing” I’m here to say that it can all too often be a disillusioning and demoralizing occurance. Replace “hobnobbing” with “toadying” or “selfabnegating” and you get much closer to the heart of the matter.

    5. Denis

      “But the fact is, highly selective colleges have no monopoly on quality education. Their undistinguished graduates in politics seem to produce spectacularly poor results.”

      As point out in a prior comment, they’ve a monopoly on the perception of quality.

      Also, for what it’s worth, the US education system is so dismal that most of its students can’t name each of the US presidents since WW2 — let alone name and place each State on a map or vaguely place a random country on a map or do some basic maths or physics. Ivy league or not, the US education system is pitiful at best.

      As for graduates in politics, I’d suggest that you get what you vote for: considering that the education level of the average US citizen is dismal, don’t expect them to vote for anything but religious bigots, extremist bigots, demagogue bigots, and other bigots. Did I mention bigots?

      1. ambrit

        Dear Denis;
        How about intellectual bigots?
        The best way to fix an election is to choose the candidates. This and other “Thinking Blogs” have had lively exchanges thrashing out how this is done. For an example; I once sat in on an advanced class in advertising. Just curious. One of the lessons was to watch “Triumph of the Will” by Leni Riefsthall. (Sorry, I’ve forgotten how her name’s spelled.) This was shown and analyzed as an object lesson on how to do propaganda right. Since then, I’ve never sat through a “Candidates Humble Life Story Short Film” without an almost uncontrollable urge to do a Dr. Strangelove. So, even the best of us, (how’s that for underhanded propaganda?) can and do get fooled.

    6. Bribes

      I am re-posting this link from below, as it is relevant to this thread.

      http://blogs.forbes.com/halahtouryalai/2011/05/25/the-government-will-pay-you-big-bucks-to-find-the-next-madoff/

      Essentially, the SEC adopted strong rules to protect and reward whistleblowers reporting financial fraud to the SEC.

      For some background, one of the major battles in crafting this legislation was whether whistleblowers had to go to internal compliance before going to the SEC. The Chamber of Commerce wanted to require whistleblowers to go to internal compliance first, if they were to receive any award whatsoever. This would’ve stopped most whistleblowers by giving the guilty party time to cover its tracks and prevent whistleblower rewards.

      The SEC originally adopted exactly those rules, but a fair amount of advocacy later, the SEC did an about-face and made some very strong rules protecting financial whistleblowers.

      1. Bribes

        Sorry. I meant to put this in the thread about SEC investigations. I don’t know what happened. To the Administrator, if it can be moved, please do. I don’t plan to re-post this _again_.

  6. Susan Truxes

    The article about Khuzami and the SEC makes the whole effort sound so collegial. When the SEC “trusts” the public companies it is investigating it defers to those companies and allows them to do their own internal investigations. Frequently these in house investigations produce useful results and reduced fines for the companies who cooperate in good faith. Oh, and besides, the SEC has no subpoena powers!

    1. anon48

      “Frequently these in house investigations produce useful results and reduced fines for the companies who cooperate in good faith.”

      Potentially letting the foxes take inventory of the henhouse seems just a little too convenient to me.

      “Oh, and besides, the SEC has no subpoena powers!”

      They are supposed to be able to call upon DOJ.

  7. Susan Truxes

    About spent fuel rods in pools and spent fuel in steel containers in the United States: Where has the dialog been on this? Harry Reid has made an effort to prevent Yucca Mtn. from being the repository of this stuff because the area is prone to earthquakes (small ones) and because he anticipates that some day Nevada will be the “Saudi Arabia of thermal energy.” Nearly the entire state of Nevada is a dome of magma with a relatively thin crust. But spent fuel is such an overwhelming issue it should trump all the spinoffs and headscratch. We were completely overtaken by events at Fukushima. I think the military should be employed. And, just curious, whatever happened to Pons and Fleischman?

    1. Ellen Anderson

      Why, why, why aren’t people more upset about this? If Indian Point has a meltdown (for whatever reason and there are lots of them) the 50 mile evacuation zone involves over 17,000,000 New Yorkers.

      We have land mined the entire eastern seaboard. Anyone out there care? What are we to do?

      1. Francois T

        Come one now!
        Such an accident would be a great bonanza for the National Security State. They could test all their crowd control methods and tactics, as well as making sure the workers and ordinary people lose even more of their meager assets and sense of security.

        With all these draconian provisions that McConnel and Harry Reid are trying to ramrod into the Patriot Act, someone’s gotta try them down the road…just in case real terrorissssssss become better than the sad joke they actually are.

        Is that jaded enough for you? :-)

  8. alex

    from “Public Schools Charge More Fees”:

    After adjusting for inflation, average spending per pupil has increased 44% over the past two decades … Personnel costs—which amount to about 80% of expenses in many school districts—have driven some of the increase … The average salary for a public-school teacher nationally has jumped 26% since 2001, though that growth didn’t quite keep pace with inflation.

    What kind of lame writing is that? First note that real (inflation adjusted) costs have risen 44%, claim it’s partly driven by personnel costs, then note that (over a different time span) nominal (non-inflation) teacher salaries have risen 26%, but if actually adjusted for inflation they’ve dropped.

    Wow, talk about confused and uninformative. Speaking of education, can the author and editor get refunds on their educations?

    There’s no real explanation for rising (real) costs, just the same old “some people say we can no longer afford [blah, blah, blah]”. Right, US real GDP per capita has written considerably over the last 20 years, so that means we can no longer afford silly frills like education. Gotta love the reasoning.- Lewis Carroll has been outdone.

    1. BondsOfSteel

      Could it be the drive to reduce class size?

      I know in Washington State, there was a huge push to reduce class size to ~ 25 students/teacher instead of ~40. This would account for the increase in personnel costs and without the same increase in salaries.

      1. alex

        “Could it be the drive to reduce class size?”

        Could be. I have to go back to my day job, but for a reporter finding out such things _is_ their day job. Why don’t they do it?

        I see endless articles on soaring public school and college costs, but invariably they’re a collection of random semi-coherent factoids. Assuming that’s not meant as a subtle(?) satire on the education that American reporters have received, I have to ask where is a full-blown analysis.

      2. reslez

        In the U.S. public schools are required by federal law to accept disabled/special needs children. Some of these children require an individual aide apiece. Naturally when they imposed this mandate Congress never saw fit to provide funding commensurate with the costs.

    2. schoolteacher

      The biggest problem with public education now is that parents don’t care. Parents are not doing their part to help educate their children and have a dismissive attitude towards school and learning. Their children bring this attitude to class with them and disrupt each others learning. K-12 becomes a useless exercise resulting in mass failure. Students simply refuse to think. This failure can be measured against other countries that achieve far better outcomes with less money.

      They only way to get parents to care apparently is to charge them as much as they can afford.

      1. alex

        “The biggest problem with public education now is that parents don’t care.”

        Presumably that’s based on your on-the-job experience, but with all due respect one teacher’s frustrations, however justified, do not an analysis make.

        Where do you teach? Is that true in general or is it mostly the problem kids that you notice most? Do these attitudes really differ much from decades past, or is it just nostalgia for an imagined past when everyone respected education?

        1. schoolteacher

          I don’t have an axe to grind against parents. Frankly, they are overworked compared to a few decades ago and barely have time to make nutritious dinners let alone raise their children.

          The only way to get their attention seems to be to tax them. When they realize they are sinking some serious money into their children’s education, they start to take their job of raising children more seriously and their children start to take school more seriously. It makes the teacher’s job much nicer when this happens.

  9. Eagle

    “It wasn’t this way in my day. A lot of merely middle and high end of middle class kids went to Ivies.”

    In my experience, this is still the case, more so than ever before. There’s nothing in that article that would lead one to think otherwise, though I would be interested in seeing the breakdown over time.

    1. Community Collegian

      It’s not clear which colleges the article is talking about. The main thrust of the article seems to be that Amherst does not follow this possibly fictitous trend. I saw it as a kind of propaganda piece for Amherst college.

      How much did Amherst college pay for it?

  10. kevinearick

    fund of experts – hahahahahahaha as someone else would say.

    Masons-In-A-Box: Talk About Stupid

    So, I go up to Canada to see what’s going on there…

    marry a nurse from a small town where her old family controls their part, have a kid, and get a house on the Thames outside of London, 40 acres of tobacco land, tractor barn, and 2 greenhouses, setting up to grow pot for the government, working for the municipality, having the boys (who talk like a bunch of teenage girls) grade my driveway on a regular basis. Doesn’t the moron hook up with a cop, assuming the Family Law system is bullet-proof.

    Her family is already telling me what I should do with the property – build a hockey rink, etc. We live in a small farm town, and all of Canada is a small town, if you know what I mean. She realizes the jig is up, so don’t the two of them fake a robbery on our house as an excuse for the cop being there. She springs the divorce on me, I walk across the line, and tell her lawyer that I will see him and his friends in international court. The whole bunch of them didn’t want anything to do with that.

    And to top it all off, she sends the Christmas presents, which were supposedly stolen (her family’s presents were not stolen), to our acquaintances afterward…

    Power + Ignorance = Stupid Corruption

    Out of the thousands of reports I provided to the Navy as an off-the-book consultant, I provided the following conclusion in 1996: Family Law has to go, or a simple output gap information system will bankrupt the global markets. In the meantime, my timekeeper code has been copied and distributed globally, the outline of the modules of which I have been providing to you, between the lines. My kids already have their system up and running, and it assumes a substantial die-off. Careful what you wish for.

    There is already 40% excess housing stock. What is going to happen in the case of a die-off? The sooner the legacy families begin bankruptcy proceedings for the nation/states, the more of them are going to survive the process. Now, it’s the legacy families against their own minions. A 3% cut in teacher salaries isn’t going to get it. “Unemployment improves, but the labor force shrinks.” Crack me up.

    Where is the future income going to come from to pay the pensions and medical care?

    The government checks have to stop and the organizations serving as havens for the feminists and mama’s boys have to be decertified to re-boot the system, so they will be, and won’t that be a clusterf***? It’s not like they haven’t been served notice.

    The outliers are electrons. No system is bullet-proof. It’s a matter of time and time is relative. What matters is the nature of thrust required. Build your bullet algorithm accordingly. The calculus of physics is just addition by subtraction over time. The electron of electrons adjusts the firing angle. They can employ the increasing pressure and decreasing volume as the necessary motor, or let it blow up. In any case, Democracy is going to leap forward.

    1. thracian urn

      Weren’t you living in San Diego when you got divorced?
      Or is everything you write a kind of secret code that no one cares enough to try to figure out?

  11. Pepe

    Insider Trading Inside the Beltway

    Stephen M. Bainbridge

    University of California, Los Angeles (UCLA) – School of Law

    UCLA School of Law, Law-Econ Research Paper No. 10-08

    Abstract:
    A 2004 study of the results of stock trading by United States Senators during the 1990s found that that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.

    Under current law, it is unlikely that Members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading.

    This article analyzes present law to determine whether Members of Congress, Congressional employees, and other federal government employees can be held liable for trading on the basis of material nonpublic information. It argues that there is no public policy rationale for permitting such trading and that doing so creates perverse legislative incentives and opens the door to corruption. The article explains that the Speech or Debate Clause of the U.S. Constitution is no barrier to legislative and regulatory restrictions on Congressional insider trading. Finally, the article critiques the current version of the STOCK Act, proposing several improvements.

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1633123

  12. Bribes

    SEC adopted a new rule under Dodd-Frank today. This is a BIG win for providing information on SEC violations within the financial / banking world.

    “Under the rule, whistleblowers whose information leads to enforcement action are entitled to take 10% to 30% of the penalty the SEC collects over $1 million. Before this rule, the SEC’s reward program was limited to insider trading cases and the amount of an award was capped at 10 percent of the penalties collected in the action.”

    http://blogs.forbes.com/halahtouryalai/2011/05/25/the-government-will-pay-you-big-bucks-to-find-the-next-madoff/

    1. bondsman

      “of the penalty the SEC collects”

      But when was the last time the SEC collected anything from anyone?

      They wouldn’t even shut down Madoff despite whistleblowers yelling and screaming for years.

  13. Steve B

    Good afternoon,
    I’ve been visiting this website for some time now, and find a strong connection to many of the ideas expressed here. While its clear that not everyone is always on the same page, there nonetheless seems to be a general agreement that the present leadership of the US has proven itself illegitemate and incompetent in light of our shared democratic values. How do we correct this problem? I’m ready to organize, but don’t know how. I’ve dabbled in various local community/labor-oriented groups, mostly in get-out-the-vote campaigns around specific local issues, but have yet to find a group of colleagues with similar, uh, intellectual capacities and inclinations. Quite simply, where are the philosopher-kings capable of challenging the sophists currently in charge, and how do I join them? Pardon my crassness, but reading/posting on this is little more than mental masturbation (which I do enjoy!). While nice, its probably time for real action. I’m in that mid-sized city directly in the center of the continental US, on the confluence of the Missouri and Mississippi. Anybody else nearby and ready for the streets?

    Thanks,
    SB

    1. psychohistorian

      Steve B,

      I find the streets here in Portland to be wet and cold today and would much rather plot the textual version of revolution here, in cyberspace.

      The reason there are no emerging “democratic” leaders is that it seems to be a very short career for those that try and give their lives.

  14. Max424

    YS: “Never in my wildest dreams did I think we’d reopen so many supposedly settled ideas on this front. Shows a certain naivete, no?”

    I don’t know Yves, I’ve been wrestling with the naivete question myself.

    All throughout the 80s and 90s I was making fact based, math based, doomer calls (and back then, some of them were pretty wild), and most them turned out to be, deadly accurate.

    The thing is though, I didn’t really believe, any of them. Even as I checked off the list, I said. “This can’t be,” or, “The process of disintegration that I’m looking at can’t be real,” or, “If it’s real, it will be arrested (must be arrested!).”

    Turns out I was a flabby American Exceptionalist, done in the by blatant propaganda that I believed could never touch me (because I was so brilliantly attuned to its oblique and insidious nature).

    Hell, I’m so pathetic, I though it was possible (in fact, I thought the odds were better than 50/50), that Obama was the reincarnation of Abe Lincoln,* sent by someone (?) — in the nick-of-time (!) — to deliver us! How embarrassing for me.

    Never again! The shackles are off; it’s only intellectual freedom for me, baby, from here on out.

    * And MLK and FDR. I thought Obama might be; the perfect American combo! …giggle…

    1. reslez

      YS: “Never in my wildest dreams did I think we’d reopen so many supposedly settled ideas on this front. Shows a certain naivete, no?”

      Well, I never dreamed the 21st Century would decide to reargue the whole torture debate. I thought that one was safely in-coffin. But I guess sadistic authoritarians are the rebels of our era and have decided to buck the status quo by boldly questioning the basics of our civilization such as caring for elders and educating the young. I’m still waiting for the right wing to add slavery to their campaign platforms. (The left will compromise with indentured servitude for debt.)

      I though it was possible (in fact, I thought the odds were better than 50/50), that Obama was the reincarnation of Abe Lincoln,* sent by someone (?) — in the nick-of-time (!) — to deliver us!

      Er, what? Are you talking about God? Or space aliens or something? If you’re prone to this sort of delusion it might be a good idea to spend more time questioning your priors.

      1. regressor

        The purpose is to roll back 2000+ years of civilization, abolish all liberal documents like the Magna Carta, the Bill of Rights, and even the Bible, and regress into a state of nature where might makes right and the weak become slaves of the powerful. I believe this is the Democrat/Republican platform, and there is passive buy-in from virtually everyone.

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