Links 6/19/11

The Social Psychological Narrative — or — What Is Social Psychology, Anyway? Edge. Be sure to click the teeny + sign to read the entire piece.

Japan finds hot spots in areas that seemed safe Washington Post

Libya conflict: Backlash ensues to Obama’s refusal to seek Congress’s nod Christian Science Monitor

Road Rage in Russia Foreign Policy (hat tip reader Carol B)

China ‘steals’ Alpine village from Austria in hope to transform outdated southern city Daily Mail (hat tip Ed Harrison)

WW2 Bengali Holocaust: “Churchill’s Secret War” By Madhusree Mukerjee CrossCurrents (hat tip reader May S)

2nd test flight of X-51 aircraft ends in crash Associated Press (hat tip reader Buzz P)

Totally. Fucking. Clueless. Shakesville (hat tip reader BDBlue) Team Obama, that is.

City Government demands all keys to properties belonging to Cedar Falls residents YouTube (hat tip reader Bruno). Not sure what happened June 13, but the attitude of the city officials is stunning.

Paychecks as Big as Tajikistan Gretchen Morgenson, New York Times

A Sokratic Dialogue: Liquidity Preference, Loanable Funds, and European Hedge Funds that Fear the Collapse of U.S. Treasury Bond Prices Brad DeLong

Marxism without revolution: Class John Quiggin

Hoenig: Restrict bank activities to core services Ed Harrison

Call for Experiences: Deposing Employees of Document Mills Lynn Syzmoniak. If you know any foreclosure defense lawyers, please forward to them.

Lawyers and Accountants Once Put Integrity First Mark Emerson, New York Times. I may write a short post on this later; regardless, this is an important reminder of how far standards have fallen.

Antidote du jour:

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  1. attempter

    Re handing over keys:

    That’s pretty wild, but I must say this as clearcut a sheeple test as we’re likely to see anytime soon. Here your wretched obedience isn’t even passive – you have to actively hand over a key. Are there citizens calling for universal disobedience of this, and community support for anyone sanctioned for disobedience? If not, how despicable for them.

    1. PhilK

      Monday, June 6, 2011 7:00 am

      CEDAR FALLS, Iowa — Opponents of an expanded key box ordinance in Cedar Falls don’t plan to go down without a fight.

      A group of people who say the ordinance is a risk for invasion of citizens’ privacy and an unnecessary cost for businesses are mounting a campaign to keep it out of the books.

      Judd Saul developed a video based on footage from the May 23 City Council meeting and posted it to YouTube. He and others opposed to the ordinance are spreading the word to people they know and expect a big crowd at the June 13 council meeting to speak against the requirement of key boxes.

      “If it does pass, we are going to file a lawsuit,” Saul said. He believes it is unconstitutional.

      1. attempter

        A lawsuit’s OK, though not exactly a will to disobey. (Your link doesn’t work, but only returns to NC. I tried clicking on it to see if there was more.)

      2. Externality

        Note how this was implemented. An obscure body inserts a mandate in the “International Fire Code.” Then, local governments decide to adopt the updated Fire Code with little or no public discussion. Finally, to comply with the lengthy code, the local government suddenly imposes the keybox requirement.

        (Next, will likely come access to the key box for the police, Homeland Security, the FBI, etc. Anyone who objects will be accused of supporting crime, terrorists, etc.)

        Other links:

        1. Search& Seizure Epileptic

          the “International Fire Code.” Then, local governments

          Would you prefer to put your house-key into a lock-box accessible by volunteer fireman, or would you prefer that he chop your front door into pieces with his axe? Think about it!

          Automatic sprinkler system? That will not stop us. We can smash all of your doors when we are suddenly suspicious that one of your cats has suffered from a myocardial infarction and needs our expensive taxi service to local animal hospital. Why are we suspicious of a medical emergency? What difference does that make?

          Just do as you’re told

    2. DownSouth

      • “Our job is to make sure that property and people remain safe.”

      • “The merits of an idea does not depend on the number of people who hold that idea.”
      ▬Cedar Falls City Councilman Kamyar Enshayan

      Scientist kings rule! And they all speak the same language. This is true whether it’s Cedar Falls with a population of 36,145, Greece with a population of 11 million, the United States with a population of 312 million, or the European Union with a population of 500 million.

      The argument is always the same—-the experts know best, and what the people think be damned. Stripping us of our democracy and our civil liberties is always rationalized as “protecting” us.

      Long live the scientist kings!

      Long live the security state!

      1. attempter

        If you look at any of them (political and economic “elites”), at any level, we find that not only are they not superior, not actually elite, but on the contrary they’re the most inferior, worthless, mediocre filth.

        (And their “ideas” are always purely idiotic from any point of view other than their own crapulence.)

      2. psychohistorian

        Our job is to make sure that property and people remain safe.”

        Think about that quote. It puts the safety of “someone’s” property before that of people.

        Those “someone’s” own the banks, the multi-national corporations, many governments and the idiot that stated this’ mind.

        I think that personal/social ownership of parts of the earth and inherited wealth are the nuts civilization needs to crack to stay alive.

        1. Billions for me, None for you

          It’s not nuts at all. My watch alone is worth more than 700 serfs’ lives. Clearly, my watch should be protected before those serfs.

          Also my watch is an asset whereas those 700 serfs are a net liability after factoring in their food, clothing, housing, and health insurance. Their lives are worth less than cattle frankly.

          1. Cedric Regula

            O/T but I heard the Japanese are developing an Atomic Watch that synchronizes itself with its surroundings and is guaranteed to stay accurate for 100,000 years!

    3. howard

      if the people of cedar falls actually hand over the keys, they themselves are to blame.

      if the people of cedar falls do not vote those six clowns out of office asap, they themselves are to blame.

      i blame the sheep, not those who would sheer them (and subsequently slaughter them).

  2. dearieme

    Lawyers and Accountants: when we’ve let our house in a College town, our rule has been never to take tenants who teach or study Law, Economics or Business. We have been happy, and more than happy, with the assortment of Engineers, Vets and Archaeologists that we’ve had.

  3. Independent Accountant

    Fallen? Where were the CPAs and attorneys during the 1979-1986 S&L crisis? Why did Congress produce a 1760-page study in 1976 about the then Big Eight accounting firms. I disagree that professionals’ standards have fallen. We just forgot the crises of old.
    Everson writes, “it would be prudent to ask whether lawyers and accountants offer the same protection against corporate misconduct that they once did”. I’ll answer that. Yes they do. Very little.
    Everson continues, “Three or four decades ago, investors and regulators could rely on these professionals to provide a check on corporate risk-taking”. Huh? 1976 was 35 years ago! What is this ignoramus talking about? See my “31 More Years” posts.
    Everson writes, “The mission of the junior accountant or lawyer was clear to all: help clients adhere to professional standards and follow the law”. Really? Or to elevate form over substance to evade the law?
    Everson writes one thing I agree with, “Congress should take a hard look at attorney-client privilege as it applies to corporations”. I have advocated ending such privilege with respect to SEC registrants for over 30 years!


    1. texas toaster

      There was a period of maybe 5 years in the 1970s when guys like Ralph Nader had a chance. There were only a handful back then. Ever since then they are automatically overruled in court.

    2. Thomas Barton, JD

      Kudos to you IA for your excellent counterpunching to the nonsense spewed forth once again from the NYTimes. Where were the shining knights of law and accountancy during the horrific 1960s for our nation’s lakes and streams and rivers and ponds ? Where were they when Detroit’s Big Three automakers churned out extremely dangerous autos when I was a child one of which I rode in as a boy, the Corvair. And for that person who will not let her home to law students or economists or others many of those tenants are fine and outstanding and would never countenance such a moronic blanket prohibition.

      1. Rex

        You survived your encounter with the horrible Corvair it seems.

        I’ll concede on the Pinto gas tank, but I lived through the Corvair “Unsafe at Any Speed” period and I think it was mostly hyperbolic. I haven’t taken Ralph Nader seriously since.

        We should try to be careful not to tilt at windmills when there be real giants that could use some cutting down to size.

    3. Anonymous Jones

      Yes, I agree. Total bollocks. There is no evidence that these professions had ‘higher standards’ years ago. They made less money, relative to now, that’s the evidence? Really? WTF? Is this really happening? Complete delusion.

      It’s psychotic to believe that lawyers and accountants 50 years ago exhibited more ethics. I could tell you all the stories of them schtupping the ‘help’, if that would help you disabuse yourself of this truly bizarre delusion of the ‘good old times.’

  4. new yuppy rant :)

    “Earning $3,600 a year, my dad shared a two-bedroom apartment in Greenwich Village with three classmates. At the time a United States District Court judge was paid a salary of $15,000. Today, a judge’s salary has gone up slightly more than tenfold, a bit more than the increase in inflation. A new lawyer at the firm where my father worked, however, is pulling down well over 40 times what my dad first earned. ”

    1. $3600 IN 1946 = $41000 today, but I bet dad graduate law school/undergrad debt-free and Greenwich Village real estate was much cheaper in real terms. Though with casual business attire I’ve probably saved a grand or two in haberdashery costs.

    2. Top-tier associates bill 25% to 40% more hours than now in 1946.

    Just as in investment banking, the “manufactured indignation/everything was better in the good ole’ days smugness” should be directed at the partners/executive compensation–not us lowly indentured servitude peon associates who are mere cogs in the Marxist class warfare machine :)

    1. BDBlue

      I think one of the ways lawyers standards have gone down* is how they treat the help. When I was at a big firm in the early 1990s, I thought we got treated horribly. But new attorneys today have it so much worse.

      * I do think lawyers standards have dropped. Saying they’ve gone down does not necessarily mean they were all that high to begin with. And, of course, that’s also talking about the profession across the board when there have always been crooks in the profession.

  5. anon48

    Re: Lawyers and Accountants Once Put Integrity First

    YS- “I may write a short post on this later; regardless, this is an important reminder of how far standards have fallen.”

    Please do!

    Regarding the Time article- I think I’m more in agreement with Independent Accountant. I’m doubtful that the standards (professional integrity) were any better in the good ol’ days. It would be like saying America was more pure in the 50’s (i.e. if one ignores the prevalence of discrimination, civil rights violations, political corruption, and etc). A more accurate statement would be to say that there’s probably a similar correlation between professional integrity and client integrity as existed in years past.

    So- the real problem is that client integrity appears to have steadily declined over the past few decades (for reasons such as the spread of perverse financial incentives, reduced fear of enforcement and public perception, among others). And when the stakes are high enough, the professionals have continued to just go along for the ride.

    The article does spotlight the inherent conflict between the CPA’s role to help the put the client’s best foot forward, vs. their responsibility to protect the public interest. This is tough to resolve but one viable response is increased enforcement. Right now my perception, as one who currently practices in public accounting and has previously participated in the professional oversight process for CPA’s, is that the fear of enforcement repercussions arising from professional misdeeds is low to nonexistent.

    So-may I suggest one avenue for you to explore- role of the CPA’s Professional organization- the AICPA- as overseer of the profession. That role was rightfully stripped from it because of the audit failures that arose in the late 1990’s and as a result, the PCAOB was born. But the AICPA still has a disciplinary function whereby individual members can be expelled. May not seem like much, but expulsion is a big deal. Regarding your professional career, getting expelled becomes the equivalent of being branded with the letter A during the Puritan days of early New England.

    And because the AICPA seems to have evolved into nothing more than a PR machine for the large CPA firms and is therefore incapable of utilizing this tool. That is, unless the individual member is affiliated with a smaller professional firm or company. Want proof? Just make a list of all large audit failures over the past 20 years. Then check the AICPA for a list of members expelled (which are published) during the same time period that were associated with the largest failures. Don’t be surprised by what little you find.

    (My sense is that many of the partners and employees of the largest firms would welcome a higher level of oversight. Just not the guys who control the client relationships and make all the money).

  6. Deb Schultz

    While I think the claim that the merit of an idea is not measured by the number of people holding that idea, I think this councilman has confused ideas with ordinances. Ordinances most definitely depend on finding merit in the eyes of the majority affected by them, at least in representative democracy.

  7. Rogue_Leader

    Please be careful about referring to Daily Mail stories: they have a reputation for selective reporting, exaggeration and sensationalism. They do occasionally produce some decent investigative journalism, but stories bylined “Daily Mail Reporter” usually aren’t.

    There’s a reason the reporter didn’t want to put their name to it.

  8. Abe, NYC

    Quiggin’s conclusions are similar to those in “Lifting the veil.” It’s nice to get a dose of optimism (especially if you read NC daily :) but I’d be really interested if somebody plotted potential mechanics of a successful pushback against the elites. I’d really like to believe a change is coming, but it seems to me the majority of Americans are happy with their lot and afraid of their status being taken away from them (which is so easy now, as Yves keeps pointing out) – too happy and afraid to support radical measures. Absent a significant deterioration in the standards of living for the majority of Americans, I think it’s unlikely that the elites can be cut down to size.

    Not that that deterioration isn’t coming. Everyone knows there’s going to be a big crisis in the next few years. It might be a case of the sooner the better. Sometimes I think might be good for the country if a right-wing nutcase like Ron Paul or Michelle Bachmann actually came to power. That would bring the matter to a head.

  9. Tertium Squid

    Clueless article:

    Is that what we’ve come to? Demanding better lip service from White House communication personnel?

    Hope those chains rest lightly upon you…

    1. JTFaraday

      Well, but they’re so excited that Nancy Pelosi “says there’s a War on Women.” Somehow the idea that in leading the war on the American people, Nancy Pelosi has been leading that War on Women seems to have escaped everyone’s notice. Did she or did she not, Herself, enthusiastically whip that very same objectionable Healthcare Bill through the House?

        1. Rex

          “Talking about cluelessness…”

          Sorry to be critical; usually I am in sync with your comments. But this one could be taken a number of different ways. Not sure to whom/what it was directed.

  10. PQS

    Re: Keyboxes:

    It’s been my experience in commercial construction that these devices are required, although not universally, on new construction projects only. I’ve not seen a jurisdiction (even up here in the Commie Northwest) require them retroactively for existing buildings.

    The idea is that in more fortified structures (such as a large brick grocery store or a bank) that the fire department won’t have to waste valuable time trying to break down walls/saw through roofs/break tempered glass to gain access to save lives and put the fire out before it spreads. Yes, it’s probably overkill, but I’ve never seen anything sinister in it. Especially if you’ve seen how fast a fire can spread in an unsprinklered building. (I once observed a wood frame apartment building burn like a torch and destroy several units in about five minutes. No kidding.)

    Of course, requiring them for private homes is totally outside the pale. I don’t think I’ve even seen them for multifamily residences. I think this is a case of OverZealous Code Enforcers Going ApeS&*T, also not an un-heard of affliction of building departments the world over.

  11. anon48

    “Hoenig: restrict bank activities to Core Services”

    Hoeing is the president of the KC Federal Reserve Bank. The paper seems to be written in a way that a lay person understands (e.g. I seemed to understand it). The following passage is a perfect example since it gives crystal clear arguments that can be used to justify dismantling of the TBTF institutions. Although the arguments are not new (I’ve read similar arguments presented on this site at various times), they along with the other observations and conclusions make it worth your time reading the paper. The following passage starts on page 14-

    “From Critics of restricting bank activities argue it would reduce the economies of scale and scope that are critical for the largest banks to be successful in global markets and that large corporations want one-stop shopping for their financial services. These arguments, however, are not persuasive.

    – First, there is no strong evidence of economies of scale. There are many conceptual and empirical problems with studies of economies of scale.

    – Second, there is even less evidence of economies of scope. Nevertheless, older studies from the 1990s show that there are no economies of scale when banks are larger than about $250 million in assets, although the threshold is likely to be higher in today’s economy because of inflation and advancements in information technology. In fact, a more recent study from the mid-2000s suggests there are economies of scale for the largest banking organizations, but the results are highly questionable because there are so few banks at the sizes in question and the study uses data prior to the problems that banks had during the financial crisis.

    – Third, large corporations would still be able to do one-stop shopping for commercial and traditional investment banking services, although they would have to go to securities dealers to purchase swaps and other derivatives for hedging purposes. In fact, there is evidence that multiple functions of large, complex banks actually increase systemic risk and anecdotal evidence that if bank activities are restricted as suggested here, a nonbank financial industry would emerge and thrive.

    – Finally, even if there are economies of scale or scope, it does not necessarily mean that banks should be allowed to continue to conduct all of their current activities. Whether they should depends on comparing the marginal benefits from the reduced private costs of operation to the social costs associated with financial crises. Given the large costs of the 2007-9 crisis, the efficiencies and cost benefits of size and scope would need to be extremely large.

    Critics of restricting activities also question how we would go about divesting the prohibited activities. The divestitures that were required by the Glass-Steagall Act and the breakup of AT&T in the 1980s suggest that divestitures can be conducted in an orderly manner in a relatively short period of time.

    Critics of restricting activities also are concerned that it would cause two major problems for U.S. banks because they would face a competitive disadvantage relative to universal banks, mostly from Europe, that are allowed to conduct the full range of activities.

    – One problem is it would drive U.S. banks to move to other countries. However, it seems highly improbable that any other country would be willing or able to expand its safety net to new large and complex banking organizations.

    – Second, the competitive disadvantage of U.S. banks would lower their franchise values, which would provide an incentive to take even greater risks to raise lost revenues and maintain ROEs. However, the virtue of restricting activities is that it is easier for the supervisors and the market to detect and punish excessive risk taking.”

    1. Cedric Regula

      It’s clear Hoenig will be arrested soon for conspiring with Paul Volcker, and now E. Warren too, to wreck the global economy and financial system.

      Eric Holder gave this matter top priority, and outsourced the warrant writing and development of the prosecution’s case to the Board of the New York Fed.

  12. Cedric Regula

    File: How Clowns Keep Themselves Entertained

    Lifted this from ZH today. I guess the May debt ceiling breach came as a surprise, then TG announced his accounting gimmick plan (raid the gov pension plans) to push the surprise to Aug 2, and now we need 3 month temporary hikes to the ceiling -pushing out the surprise- so the Rs&Ds can have a heart to heart discussion about this. Everyone knows we think best in the winter months, and new ideas are bound to flow forth!

    Just The Tip: Republicans Considering Transitory Debt Ceiling Hike

    So much for the engrossing “Debts of our lives” soap opera. In the most expected outcome possible, the “best hypocritical actor” Oscar winners known as Republicans have caved and according to chief Senate republican sock puppet Mitch McConnell “Congress and the White House could raise the debt limit for a few months while they seek a comprehensive, long-term budget deal.” Of course, when the $300 billion or so “temporary” hike which will last the US government for just under two months, we will get another temporary extension, and then another, and so forth, until the current batch of Oscar winners is voted out en masse yet again, only to be replaced with another set of sock puppets, and the posturing and the drama, not to mention the comedy, can begin anew. Luckily the G-Fund will at least get a temporary reprieve until its is plundered again, some time in late August, early September, when the debt ceiling is breached again, and an unmanageable debt load has been resolved through… the issuance of more debt. Don’t be surprised to see the net notional US CDS outstanding to continue its torrid pace of sequential increase.

  13. tyaresun

    Looks like the entire West or at least the NC readership shares Churcill’s blindspot.

  14. jafd

    Re Mark Emerson’s column:

    There’s little ‘institutional memory’, after the passing of a generation, of the ways to ‘game’ the Financial System.

    I’m old enough to remember something of the ‘Go-Go Years’ of the ’60’s. Know a young man who got a Wharton MBA a couple of years back. Asked him if he’d ever heard of Equity Funding Life Insurance Company ? ‘No’ National Student Marketing, Robert Vesco, and Bernard Cornfeld drew equal blanks.

    Those who do not remember the past are doomed to buy stock in Enron.

    1. Rex

      “Those who do not remember the past are doomed to buy stock in Enron.”

      Or invade Iraq.

      Short term or selective memory seems to be all the rage these days.

  15. Anonymous Jones

    Oh, the social psychology article started so well…until I clicked on the [+] sign. Really? You don’t think those DARE and Scared Straight studies might have suffered from selection bias? Really? It’s just me?

    They start discussing how difficult it is to discuss real knowledge, because of the inherent propensity to shape all information gathering based on a pre-existing worldview, and then they point to junk studies that are nothing but bias writ large? Yikes.

    And the stuff at the bottom is priceless. Conclusion: don’t argue with Pinker, but if you do, it’s probably not a good idea to assume that just because he wrote something in a poorly worded manner that he won’t come back and slaughter you on the rebound with a more careful phrasing about ideas you clearly haven’t considered.

    1. Foppe

      Yeah, I found that a shame as well. I’d already posted the link a few days ago based on Gilbert’s introduction, but when I read the rest I had to almost kick myself to keep from falling asleep. So either Gilbert is just much more interesting than Wilson (quite possible; I’ve seen some of Gilbert’s talks at TED and they’re quite good), or they picked a really, really stupid thing to interview Wilson about, and the guy has no idea whatsoever which things are interesting to mention and which things aren’t.

  16. Anonymous Jones

    Oh, and really, do I have to say this…the defeatism false dichotomy in the Quiggan article? Why do I have to be the a**shole?

    Acknowledging that the idiots that compose the vast majority of our species will unlikely be able to gather together to rein in the elites is not complete defeatism. If I were a complete defeatist, why would I read and comment here every day? I can acknowledge, though, at the same time, the difficulty in fighting the insane delusions of the 2d, 3d, and 4th quintiles and their obsession in making sure that the 5th quintile gets *nothing* undeserved while the top 1% take at least *one thousand times* what the 5th quintile could ever, on its best day, “steal.” This is what I like to call *reality*. Say it with me. Reality. Not defeatism. Reality. Acknowledging the problem is the first method of finding any sort of solution. Is this so shocking what I’m saying? Really?

    What the top 1% are receiving is undeserved. We should do everything we can to contain it. I’m willing to do my part. I’m trying. At the same time, am I skeptical that the people around me are going to do something sensible and clearly in their best interest? Yes, I’m sorry. I’m skeptical. I think there is an abundance of evidence that supports my skepticism. You are free to disagree.

    1. Valissa

      Hey there Mr. REALITY, graet commentary as always… somebody has to be the reality evangelist… keep up the good work!

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