Links 5/10/10

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The Incredible Healing Mouse Scienceblogs (hat tip reader Francois T). Pretty amazing.

New analysis of 40-year-old recording of Kent State shootings reveals that Ohio Guard was given an order to prepare to fire Cleveland Plain Dealer (hat tip reader John D)

Friction a non Socratic dialogue Robert, Angry Bear

Euro could reach parity with dollar: German economist AFP. So now no one can say it’s the evil Anglophones who are saying this sort of thing.

Goldman set for brutal cull Financial Times

The “E” and the “M” of the EMU Chevelle

Obama to Nominate Elena Kagan to Supreme Court Wall Street Journal. Not only does she have ties to Goldman (which might be forgiven, most adults can be allowed one skeleton in the closet), I’m told she is an authoritarian, particularly in regard to Presidential power. And it’s very Machiavellian to nominate someone who has never been a judge, hence has no history of decisions to plumb to see how she would make decisions.

€300bn late payments hit European companies Financial Times. Yow!

Moody’s, Berkshire and The SEC Karl Denninger (hat tip reader Scott)

60 Minutes on walking away Rolfe Winkler

So how’d the BP executives get off the Deepwater Horizon? Lambert Strether

Sex & Drugs & the Spill Paul Krugman

Europe’s QE is sterilised and sensitive Tracy Alloway, FT Alphaville

Economics, conventional wisdom and public policy Adair Turner, Institute for New Economic Thinking. Today’s must read, this speech was the high point of the conference. If only we could kidnap Turner and make him Treasury Secretary….

Antidote du jour:

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  1. attempter

    One would think Krugman believes what he’s saying, but it’s hard to do so when he starts out with an absolution of the reactionary corporatist Obama and closes by repeating Obama’s typical lies which are directly unmasked by his actions.

    Sorry, K, it doesn’t work when just a month ago Obama went all in on Drill Baby Drill, said environmentalists are just the filthy prepetrators of “tired debates”, and therefore proved himself closer ideologically to Sarah Palin than to the mythical public servant you’re describing in your column.

    By breaking yet another implicit (and maybe explicit – I lose track) campaign promise, Obama endorsed all aspects of oofshore drilling, the whole sum of the corporate drilling culture. (Otherwise, why wouldn’t he have radically revamped the regulatory structure beforehand? And why have offshore drilling anyway? The Bush admin itself admitted drilling offshore won’t have more than a microscopic effect on imports or gas prices, and even that not for decades. It’s obvious there’s zero rationale for offshore drilling other than to allow the oil rackets and of course the bank rackets to extract rents while socializing much of the cost and risk.)

    Actions, not empty lies after a disaster, are what matter.

    And according to this:

    the Obama administration has continued giving environmental waivers since the eruption and during the still-continuing hemorrhage.

    Sorry, K, it sounds like at the very moment Obama was issuing those wondrous words you’re claiming represent his real heart, his flunkies were carrying out his real Palinesque agenda.

    Actions, not words which are immediately proven to be lies, are what matter.

    1. DownSouth

      I agree Krugman is whitewashing Obama, but give Krugman his due, he does at least point out the obvious, and that is that the commonalities between the drilling disaster and the financial disaster are clarion:

      1) At BP there was a culture of risk taking where getting things done quickly and cheaply overrode safety concerns. Efficiency trumped safety.

      2) There was industry capture of regulatory authority and the complete gutting of regulation.

      3) There existed a flagrant disregard for the commons and for the common good.

      All this was informed by an ideology whose hallmarks are a quasi-religious belief in free markets, a demonization of government and a callous, uncaring social Darwinism that idolizes greed.

      It’s an unholy brew of libertarianism, Austrian school economics and Ayn Rand, all in the service of neoliberalism.

      1. attempter

        That’s true, but I guess when I see someone correctly diagnosing the problem but then recommending a course of action (having faith in Obama) which all knowledgeable observers know is really just continuing on the same course, I focus on the astroturfing and not the diagnosis.

        Krugman’s target audience here, just like with the health racket bailout bill, with the China misdirection ploy, and with sham finance “reform”, is the general audience who doesn’t follow the issue closely on its own (who doesn’t traverse the econoblogosphere, for example) but just believes what an establishment opinion leader like himself says.

        So the goal is to get people to think, “here’s the problem, and faith in Obama is the solution”, and in that way to enable the continuation of kleptocratic policy.

        1. DownSouth

          Krugman says “we need politicians who believe in good government, because there are some jobs only the government can do.”

          But like you say, Krugman seems to be blinded to the fact that Obama doesn’t believe in good government, but corrupt government, and with guys like Obama and Bush in charge, the job will never get done.

      2. gatopeich

        Krugman sold his soul for the Nobel. I was followin him closely, and that very day he started acting as a ‘tool’.

        Maybe we all have a price.

  2. fresno dan

    Economics, conventional wisdom and public policy

    “The first would entail imposing increases in banking system liquidity and capital requirements which are not just large but transformational, taking us back to the highly liquid and much less leveraged banks of the 1950s or before.”

    Qui bono? Who has benefited from lower capital requirements and increased leverage (at banks)? It seems to be the banks, and it seems to be nothing more than rent seeking.
    Of course, when you have so many public “servants” constantly stating that the world runs on “credit” I would wonder if they are even intellectually able to consider any policy that would constrain the availability of credit – it seems credit and politics are inescapecially entwined, and share a common view of short term gain without true acknowledgement of long term cost.

  3. Richard Kline

    Kagan is an extremely disappointing choice for an AJSCOTUS, and as such eminently typical of Obama. As SocGen she has enthusiastically endorsed all the claimed expansions of executive power fabulated by Bush II and eagerly snatched up by Bo Prez. Her worst aspect is that she is profoundly pro-corporate, and as such will complete the oligarchic control of the Court for a generation to come. She was an undistinguished professor of law; don’t look to see any intellectual depth or intent to her rulings. “Status quo, jah,” could sum up most all of what will issue from her pen. We will now have the worst Court since the 1920s from the standpoint of the public interest; probably since the nineteenth century.

    . . . Just another of our major institutions which has been sold out from under the citizenry. One wonders where this all ends? We are headed for the least functional public government in our country since the Garfield Administration but with a government with prodigiously greater financial, police, military, and regulatory powers. Uncharted territory, in other words, largely on the fascist margins of the political vector space.

    1. Andrew Bissell

      We will now have the worst Court since the 1920s from the standpoint of the public interest

      Oh come on, she can’t be any worse than Oliver Wendell “Three generations of imbeciles are enough” Holmes, can she?

      We are headed for the least functional public government in our country since the Garfield Administration but with a government with prodigiously greater financial, police, military, and regulatory powers.

      The government seems quite functional in the Wilsonian sense: imperial, power-seeking, and authoritarian.

    2. Cynthia

      It’s no secret that Goldman owns Congress and the White House, but now it looks like Goldman may soon be owning a piece of the Supreme Court, too:

      It’s also no secret that Elena Kagan wants to put a bullet through the head of our civil liberties, so no civil libertarian — right, left or center — should want her on the Supreme Court. Not only does she want to turn our country into an authoritarian police state, she also wants to keep our country in a never-ending war against the Muslim World. Read Glenn Greenwald and you’ll know what I’m talking about:

      In fact, Kagan is such an enemy to our civil liberties and such a friend to our warmongering neocons that she’s a fascist fantasy come true. Even though most right-wing fascists tend to be staunch opponents of gay and reproductive rights, most of them will be willing to overlook the fact that Kagan is a pro-choice, closet lesbian and thus won’t object to her appointment to the Supreme Court. Kagan will also be a fantasy come true for Obama in that she’ll support him in his endeavor to keep all of his ill-gotten, anti-American, unconstitutional powers that he acquired from Bush intact, enabling him to get away with being just as big of a fascist as Bush was!

      From what I’ve read about Elena Kagan, she can be best described as Joe Lieberman in drag. That’s not a pretty sight in more ways than one.

        1. craazyman

          I was already there. Ready for the absinthe bar. Will settle for a 2-bagger, with a shallow stop, just in case. -JT

      1. kevin de bruxelles

        Yes but the beauty of identity politics is that it only takes one wingnut group to comment on her femininity, jewishness, or homosexuality and the Left will come rushing in to protect this GS flunky as if she were a lost little puppy crossing a busy freeway at rush hour

        If only we could instead follow the words of Martin Luther King and judge people by the quality of their character instead of the colour of their skin – and by extension, gender, sexual orientation, etc. But this of course means in both directions. In other words people are not necessarily less evil just because they are black, female, gay, or a disabled veteran.

        So it is no contradiction to deplore attacks on her identity and still resist her nomination due to the obvious fact that she is a corporatist tool.

    3. Cynthia

      Listen to Mark Ames, the author of “The Exile: Sex, Drugs, and Libel in the New Russia,” give his account of what it was like to live in Russia when Larry Summers was Yeltsin’s Economic Hitman in Chief (listen to link below) and you’ll know that Larry Summers, acting as Obama’s Economic Hitman in Chief, is helping to spawn a new breed of American oligarchs that would make our turn-of-the-century robber barons green with envy. Larry Summers is helping our new American oligarchs strip us of our social safety net and shrink our middle class down to a size where they can drown it in Grover Norquist’s bathtub, just as he helped the Russian oligarchs do to the Russian people and their middle class several decades ago.

      Now we learn that Larry Summers, Obama’s Economic Hitman in Chief, was responsible for appointing Elena Kagan dean of Harvard Law School. To add insult to injury, we learn that Cass Sunstein, Obama’s Judicial Hitman in Chief, is bosom buddies with Elena Kagan. Cass Sunstein, if you don’t already know, is a judicial hitman who wants to take our Bill of Rights and turn it into chopped liver so that he and his fascist friends can enjoy munching on it between two slices of rye bread! In fact, Sunstein and Kagan are such enemies to our Constitutional rights that they make Anthony Scalia look like a civil libertarian!

      Putting this all together, Kagan can best be described as Summers and Sunstein all rolled into one, making her the embodiment of what Naomi Klein describes as “disaster capitalism.” So this makes Obama a disaster capitalist’s fantasy come true.

    4. Francois T

      Since learning of this ab(n)omination, I’m searching for an article where the author was questioning why do the Democrats exist anyway.

      I have to admit this provocative question takes a new meaning to me. After all, name me one, major really progressive piece of legislation to emanate from Washington since, say, 1976?

      Or, just take a look at Obama’s record in civil liberties, job creation, health care, financial reform, military expansionism etc. etc.

      In each and everyone of these fields, Obama’s mark has been about first compromise as much as we can to feed his corporate benefactors and the Reichpubliscums, while bitch-slapping his own base…but not too much, huh? Juuust the right amount, so He can pass for a “Serious and Reasonable” President. Of course, no Republican President would even think of acting this way with his base, nor would he be held to such a standard to demonstrate “Seriousness”.

      Hence, the Kagan stuff is only par for the course. There will be enough progressives who will accept Kagan because Da Leader said so. They will also accept it because they have been conditioned to never, ever ask for what they really want, just what they’re told to take and STFU!

      It goes without saying that a complete rout at the polls in 2010 does not frazzle Obama in the least. Make no mistakes about it: it could very well happen with a vengeance. He is cocksure of his chances to be the President again in 2012 and it is the only thing that matters to him. (I mean, who can the Republicans put forth without provoking a colossal burst of laughing for all corners of the US?)

      I know this sounds harsh, but pray provide an alternative explanation as to why he has exhibited such a constant desire to maul the morale of his own base? Quite simply, he doesn’t give a shit. He doesn’t have to give a shit because Democrats as a whole do not have any firm convictions they’re willing to fight tooth and nail for. Power for its won sake is enough for them.

  4. rcyran

    I don’t really understand why it is a disaster if the Euro reaches parity with the dollar. It traded far below the dollar for several years after 2000 (I remember because I was being paid in dollars! It was worth around 80 cents at one point)

    It just seems odd if a currency level that was hit less than a decade ago blows up people’s positions. And while it might lead to a fall in Europeans’ standard of living, I would think it would be good for both Greeks (tourism more competitive) to Germans (exports). Guess the key question is what percentage of total Eurozone debt is held in their own currency, which I don’t know.

    Sure, we don’t want to get into a series of beggar thy neighbor devaluations, but perhaps a bit of devaluation might give them a bit of time to get their house in order.

    1. Ignim Brites

      Good point. I don’t get it either. The only explanation I have is that the declining Euro is a proxy for credit default risk. The problem isn’t that the Euro is declining. The problem is that billions and billions of credits will not be repaid. The currency exchange value of the Euro does not affect that fact. So the internal economy of Euroland is heading from a second dip. The decline in the Euro reflects loss of interest in investing in a losing proposition, viz. the European economy in general.

      1. MindTheGAAP

        “The only explanation I have is that the declining Euro is a proxy for credit default risk.”

        Eurodollar would be a good proxy for this.

  5. LeeAnne

    What a morning. “Sterilized” funds -my my. Time for a post and discussion on the new lexicon?

    Arthur Levitt on Grethchen Morgenstern’s article about the effects of hidden finance/government treatment of fannie and freddie opines on Bloomberg this morning that (I’m paraphrasing) since no one wants to do anything about it, the burden of these TBTF GSEs will become so great that new rules will come about in a few years.

    Unbelievable! –as if the real Gods don’t exist –the shocks to come and the flight into metals is a no-brainer at this point.

    1. sam hamster

      If the flight to metals is a no brainer, then that is where the trap will be laid.

        1. Francois T

          Brain? That is not enough Grasshopper!

          Guts matter too: Thus, no balls, no babies sez the Master! :-D

  6. a

    “So now no one can say it’s the evil Anglophones who are saying this sort of thing.”

    There’s a difference between the value of the euro and its existence.

    The evil – or rather, completely clueless – Anglophones insist on talking about the euro self-destructing. On the other hand, the euro going to parity would be cheered on by the Europeans and is recognized by any sensible soul as a possibility, since at that level the euro is only a tad on the weak side.

    1. Jim in MN

      “So now no one can say it’s the evil Anglophones who are saying this sort of thing.”

      Indeed, clearly the evil Saxophones are playing the same tune!

    2. Martin

      Purchasing power wise the Euro would be only a tad on the weak side. But even in Q4 2009 the Eurozone had already a current account surplus. Think what parity would mean! Probably the Eurozone would run a large CA surplus.
      Actually, within a rather short time, I think a Euro at parity would kill any US recovery or the US gov’t would have to come up with enormous stimulus. Both would lead to a rising Euro again.

  7. christofay

    Recently Petersen of the “Cut the Social Safety Now Institute” had a panel of experts to declare that social security is an onerous burden.

    Rubins was there.

    Sir Alan Andrea Mitchell Greenspan, Earl of Washington Consensus, and Clint’n were on the Panel of Experts.

    My question, if anyone cares to answer is, did Greenspam and Clint’n receive a stipend to appear on the Panel of Experts to determine that the social safety net needs to be cut now?

  8. Valissa

    Soros is sponsoring the Institue for New Economic Thinking and yet he was a huge backer of Obama. I never know quite what to think of Soros. His institutions seem to be doing some good works, but now that I don’t trust any of the elites anymore, even the ones on the left (whom I once had hopes for, but the joke was on me).

    Here is an article from 4/16/07. I would not recommend wasting your time reading the article so much as simply looking at the photo on the front page… of George Soros as the kingmaker of Obama, with his moneyed friends. That photo is priceless as a symbol of what is to come.

    Money Chooses Sides

    George Soros was also a big funder of MoveOn, a place I used to donate alot to until I realized they were useless pawns. So what does George really want here? And is any of it good for us folks in the masses?

    1. Valissa

      As evidence that the democratic process in our so-called democratic society is being quashed by the so-called Democratic Party under his lordship Obama, here is the key excerpt from the above article:

      For example, Democratic voters have been excised from their gubernatorial primary. They will hear no discussion or debate, because there remains only one viable candidate: Jerry Brown. Six others are running, and they deserve gratitude for making a go of it, but they lack the following they need to compel the former governor to engage them in any exploration of their ideas or platforms. Brown’s consultants, allies and Democratic Party supporters skillfully aced out any would-be opponent, such as San Francisco Mayor Gavin Newsom, of staff and resources.

      The result is that Brown doesn’t have to present voters any plans or positions. He doesn’t have to say whether he will buck his labor supporters and trim the state’s costly pension obligations. He’s the nominee. If you’re a Democrat, you can take him or leave — well, no, you can’t even leave him. He’s who you’re getting.

        1. Valissa

          Welcome to The Matrix! Which color pill would you like?

          Either that or we’re all stuck in The Twilight Zone… bwahahahahah….

  9. Daniel

    A good read from an unusual source: Mark Cuban, owner of the NBA Dallas Maverick:

    Wall Street doesn’t know what business it is in. Regulators don’t know what the business of Wall Street is. Investor/shareholders don’t know what business Wall Street is in.
    The only people who know what business Wall Street is in are the traders. They know what business Wall Street is in better than everyone else. To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible. Its primary business is no longer creating capital for business. Creating capital for business has to be less than 1pct of the volume on Wall Street in any given period.

  10. micron26

    The healing mouse is indeed interesting. But achieving healing/regeneration via altered checkpoint control (modulation of p21 levels here) is fraught with worrisome caveats, which–to be fair–were addressed in that news piece. You definitely don’t want to do anything to increase mutation rates in any somatic cells, because cancer is the likely outcome.

    1. MyLessThanPrimeBeef

      It’s simply human hubris or maybe just parrhesia to acknowledge the risk on one hand but neverthless proceed with it on the other hand.

      1. micron26

        The effect in the mouse was discovered by accident. It’s very, very unlikely that anything therapeutic would directly result from the work.

  11. Glen

    Walking away from bad deals is a common enough business tactic.

    Why is anybody surprised that people will do it too?

  12. MindTheGAAP

    “Executives suggest that a combination of Goldman’s rapid rebound from the credit crisis and the struggles of many of its rivals is prompting few partners to leave.

    The recent fraud charges by the Securities & Exchange Commission against the bank, which it denies, might have compounded the effect. Insiders said employees rallied round the company as it came under siege from regulators and politicians. “

    Give me a break. This is such an idiotic thing for the FT to write that I am surprised it made it past the editors.

    1. MindTheGAAP

      “The company also laid out in the filing a worst-case scenario of what could happen if the firm doesn’t resolve the SEC case and can’t obtain appropriate waivers from relevant regulators.

      Imposing Restrictions

      The results could include “an inability to act as a registered broker-dealer or provide certain advisory and other services to U.S. registered mutual funds,” the filing said. “In addition, regulators could impose restrictions on the activities of our banking, commodities, investment advisory or other regulated businesses.”

      And yet they didn’t consider this material a few months ago? WTF??

      1. Skippy

        Industry Gods bequeathed social licence fair poorly whence its threatened.

        Skippy…see heavy mining of old in Utah and its brethren…after all we have done for you[!] poised rivers and aquifers, spikes in health related problems, unreclaimable lands, unsupportable population booms after the bust etc…but hay man I’m just trying to make a buck!

  13. Sundog

    If nobody thinks government can do anything good, then you attract mostly cynics and losers who are mainly interested in leveraging their jobs into lucrative deals with industry.

    “Reflections on the oil spill”, Edmund Andrews

    Rig workers were forced to remain offshore and incommunicado for hours after the first explosions, watching the Deepwater Horizon drilling platform burn and knowing some of their mates were not accounted for. Very funny business, seems to me.

    A little way off, Sandell stood on the Bankston’s plank deck and watched the rig that had been his home for the past eight years pitch and burn. Back in his room on the Deepwater Horizon was the white gold wedding band his wife Angela slipped on his finger 17 years ago.

    He wanted desperately to call home and tell his wife and their three children that he was alive. There were satellite phones on board, but the workers were not allowed to use them.

    Finally, at 11:30 a.m. on Tuesday, the Bankston headed back to port. Sandell closed his eyes and said a prayer.

    “‘The real deal’: Survivors recall the Deepwater Horizon explosion”

  14. emm

    “From what I’ve read about Elena Kagan, she can be best described as Joe Lieberman in drag. That’s not a pretty sight in more ways than one”

    As good a summary as any.

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