Alleged financial reform

Regarding the recently announced "financial reform," Dylan Ratigan asks us to consider what has not been fixed.

- The Cops (regulators and ratings agencies) working for the crooks. - Banks still Too Big To Fail. - Banks gambling with your deposits. - Banks allowed to "mark to myth" and use off-balance sheet accounting to bonus themselves into the atmosphere, with the taxpayer taking the fall. - Banks getting trillions from the Fed, Fannie and Freddie -- AKA you, the future and present taxpayer. What does it mean for us? It means that the same people who brought you these horrible changes -- rising wealth discrepancy, massive unemployment and a crumbling infrastructure -- have now further institutionalized the policies that will keep the causes of these problems firmly in place.
This is Orwellian, indeed, yet the Democrats are celebrating. What's going on? Kevin Baker takes a crack at it in a Harper's article titled "The Vanishing Liberal: How the Left Learned to be Helpless."
Coming to power when he did, with the political skills and the majorities he possesses, Barack Obama squandered an almost unprecedented opportunity But it is increasingly clear that he never intended to challenge the power structure he had so skillfully penetrated. With the recent Supreme Court ruling that corporations are, once more, people, American democracy has snapped shut again--the great, forced opening of the past 130 years has ended. There is no longer any meaningful reformist impulse left in or politics. The idea of modern American liberalism has vanished among our elite, and simply voting for one man or supporting one of the two major parties will not restore it. The work will have to be done from the ground up, and it will have to be done by us.

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The state of the Afghanistan occupation

Frank Rich sums it up at the New York Times, provoked by Michael Hastings excellent journalism at Rolling Stone:

The war, supported by a steadily declining minority of Americans, has no chance of regaining public favor unless President Obama can explain why American blood and treasure should be at the mercy of this napping Afghan president. Karzai stole an election, can’t provide a government in or out of a box, and has in recent months threatened to defect to the Taliban and accused American forces of staging rocket attacks on his national peace conference. Until last week, Obama’s only real ally in making his case was public apathy. Next to unemployment and the oil spill, Karzai and Afghanistan were but ticks on our body politic, even as the casualty toll passed 1,000. As a senior McChrystal adviser presciently told Hastings, “If Americans pulled back and started paying attention to this war, it would become even less popular.”
Why are we in Afghanistan? I haven't yet heard anything other than vague metaphors. According to the White House,
So make no mistake: We have a clear goal. We are going to break the Taliban’s momentum. We are going to build Afghan capacity. We are going to relentlessly apply pressure on al Qaeda and its leadership, strengthening the ability of both Afghanistan and Pakistan to do the same.
Apply pressure on al Qaeda? Give me a break. According to the CIA, there are fewer than 50 al Qaeda in Afghanistan. As far as "breaking the momentum" of the Taliban, consider this retort by Jon Stewart, beginning at minute 4:
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In more recent news, say goodbye to $3 billion of our tax dollars, freely walking out of Afghanistan. Not that you'll ever prosecute corruption under Hamid Karzai:
Top officials in President Hamid Karzai's government have repeatedly derailed corruption investigations of politically connected Afghans, according to U.S. officials who have provided Afghanistan's authorities with wiretapping technology and other assistance in efforts to crack down on endemic graft.

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Most media outlooks ignore the real story regarding Afghanistan

In light of Rolling Stone's incredibly revealing article on the muddled and chaotic U.S. policy regarding Afghanistan, most media outlooks are focusing the demotion of General Stanley McChrystal but ignoring the real issue regarding Afghanistan. Joshua Holland of Alternet explains:

[T]he story by Rolling Stone reporter Matt Hastings also reveals just how narrow the discourse about our Afghanistan adventure really is. Because while we’ll be treated to tens of thousands of column inches and hours of cable news blather about McChrystal’s “insubordination,” or whether Obama looks “tough enough” in handling the situation, the most important part of Hastings’ article is largely being ignored by the corporate media. Hastings told a tale of a project with no hope for success. His story shows us that the U.S. presence in Afghanistan is all about tactics dressed up as a strategy. It’s a profile of a military establishment running on inertia -- unable to withdraw because withdrawing is an admission of defeat, but also unable to accomplish the wholly unrealistic tasks put before it.
Andrew Sullivan is another writer who is not getting distracted by false issues.
One suspects there is simply no stopping this war machine, just as there is no stopping the entitlement and spending machine. Perhaps McChrystal would have tried to wind things up by next year - but his frustration was clearly fueled by the growing recognition that he could not do so unless he surrendered much of the country to the Taliban again. So now we have the real kool-aid drinker, Petraeus, who will refuse to concede the impossibility of success in Afghanistan just as he still retains the absurd notion that the surge in Iraq somehow worked in reconciling the sectarian divides that still prevent Iraq from having a working government. I find this doubling down in Afghanistan as Iraq itself threatens to spiral out of control the kind of reasoning that only Washington can approve of.
In this earlier post, I wanted to know what we are getting for a billion dollars every 3 days. Where's the good news from our two long wars? We still haven't even heard any benchmark for success, either in Afghanistan or Iraq. These wars, which usually are all but invisible in the American media, are financially and morally bankruptcy our country.

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Putting the incentives in the wrong place

At Slate.com, Eliot Spitzer argues that the BP disaster and the Wall Street disaster have something in common:

The law of incentives is what links the Wall Street cataclysm and BP's ongoing eco-disaster: In each case, we socialized risk and privatized gain, creating an asymmetry that created an incentive for private actors to accept and create too much risk in their business model, believing that at the end of the day, somebody else would bear the burden of that risk, should it metastasize into a disaster.

He mentions the astounding fact that in their current risk analysis of the too-big-to-fail banks, the Wall Street agencies assume that the federal government will come to the rescue with future bailouts. What we have is amazing. Public risk and private gain don't begin to pass the smell test. We are doling out corporate welfare where it is not needed and where it is not in the best interest of the taxpayers. And somehow, this catastrophic system passes as "the free market" among many modern-day free market fundamentalists. Spitzer points out that there are two ways to deal with businesses that engage in dangerous activities, tort liability and regulation, and that the public will be protected only if we have at least one of these.

A regime of full tort damages and recoveries is one way to balance safety and exploration, or investment and risk, or whatever economic activity we are discussing. But there is another way: meaningful and vigorous oversight to impose safety standards that are dictated not by the market for insurance but by the judgment of serious experts in a regulatory context.

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Change blindness and its political ramifications

I recently discovered this entertaining video of a simple and impressive change blindness experiment. Here are many additional examples from the lab of psychologist Dan Simons. I've also posted on this topic before here. If you like trying to find the changes, can you find the nine changes in this short video? It's amazing that we are so oblivious, yet so many of us are also so confident that significant changes won't will slip past us. This undeserved confidence makes us politically vulnerable too, I believe. It takes massive effort to remember that hundreds of politicians who are making claims this month previously made directly contradictory claims only a few months or a few years ago. Whether it's a change that occurs over a few seconds or a few years, the problem is similar--inability to attend to all of the details around us, especially when we are not primed to be looking for those changes. [more . . . ]

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