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    • Exchange Rates 101
      In light of the collapse of the Ruble I think it’s worth revisiting what controls exchange rates. Supply and Demand. Yeah, if you know something about the subject you’re probably shaking your head. Supply and Demand doesn’t set prices in many cases in the way that an Economics 101 course tells you. Such texts will [...]
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The Desolations of Smaugs

Gotta make this quick so I can bop down to the farmers’ market in East Liberty.

Here are two posts that belong together.  The first is about the crazy amount of money that the wealthy are just sitting on and not investing.  In The World’s Richest People are Sitting on Gigantic Piles of Cash that aren’t Earning them Anything, we get confirmation of what we have suspected for some time, that is, rich people are hoarding money.  But the reason they are hoarding makes no damn sense.  Apparently, the wealthy are waiting for a market correction before they dive back in to investing and since that doesn’t look like it’s going to happen anytime soon, they’re going to sit on the cash.  Now, I can understand that feeling if you’re a poor schlub like me, hoarding the miserable little bit of IRA you have left after several years of employment insecurity.  It makes less sense if you’re a plutocrat with more money than god.

Hmmm, maybe we should be wondering why the wealthy think there is going to be a pullback.

The second is about the consequences of hoarding all that money.  When the shareholders demand more money and less investment, companies tend to shutter their facilities.  Recently, Hoffman-LaRoche in Nutley, NJ closed it’s doors and is preparing to dismantle the site.  When I was a young chemist a long, long time ago, I visited the Nutley campus.  Like many research facilities, it was more like a small town with a gatehouse and a shuttle that delivered the visitor to her destination.  Now that Roche has decided to stop doing research in the US because shareholder value (and Americans are notoriously easy to lay off since they have virtually no labor protections whatsoever), the Nutley facility is about to undergo a radical transformation.  If it is anything like my facility where the rent the company was demanding from small startups was prohibitively high, they probably won’t get many takers.

In other words, if some of the scientists they laid off decided to get together and try to operate one of the buildings as a small incubator, they wouldn’t be able to afford it.  And these days, vulture capitalists want a lot of the research done up front so they don’t actually have to risk any money at all.  That makes research on small scale even more difficult to finance.  Rent, reagents and researchers are expensive.  So, if Roche can’t get any takers to rent its empty labs, it may go the route of some of the other companies in similar circumstances and demolish perfectly serviceable, and in some cases, brand new research buildings, rather than keep them on the books.

Lovely.

One final thing, Hillary Clinton gave an interview to Terry Gross, former Obama fangirl extraordinaire, the other day.  It got a little testy about half way through when Gross started pushing her on same-sex marriage.  Hillary talks primarily about her four years as SOS and seems to think that Edward Snowden had other options to spill the beans.  I’d have to differ with her there though.  Snowden had superuser privileges.  Anything he revealed while he was still in the US would trace right back to him very quickly.  You don’t give su privileges to many people, or at least I don’t think the NSA and its contractors would.  I could be wrong about that.  It seems a little sloppy to allow one person to download massive amounts of information and have no one notice.

Given the reaction of the Obama administration to leakers, I think Snowden did the only thing he could have done and I’m not unhappy that he did it.  I meet people everyday who are pretty non-political who are keenly aware of what Snowden revealed and they are not happy to know that the government has so much information on them.  Until Snowden, the conversation about spying on Americans was tepid at best.  Hillary should know by now that timing is everything.  Snowden forced door open and let the sunshine in a lot more quickly than some politicians might have found convenient but he sure did get their attention, didn’t he?  No putting the genie back in the bottle now or slowing that genie down now.

Ok, enough with the foreign policy stuff.  What about domestic issues?  I want to hear about that now.  No time like the present.  Let’s not put it off any longer.

 

Bullying beyond the classroom

Emily Bazelon, a senior editor at Slate, has written a book on cyberbullying, Sticks and Stones, and gave an interview to Terry Gross yesterday on Fresh Air.  One of the schools she talks about in her book that is a notorious bullying school is located in Connecticut.  She describes the school as being extremely competitive and that a culture of meanness thrives as a way of getting ahead.  In this school, you can get bullied simply for being not as economically well off as your peers.

The mother of one of the students who was targeted was less interested in curtailing online social media access than changing the culture of the school.  Bazelon says of the girls who bullied the other student:

“We want to think that empathy is this natural quality we all have, and in fact, almost everyone is capable of empathy. But there are these moments in adolescence where kids freeze out these feelings. I spent a lot of time with some of the girls who were bullying Monique [who is profiled in the book], and in moments it chilled me to listen to how dismissive they were in talking about her. But in other reflective moments they would say things like, ‘You know, I see that she’s walking down the hall with her head hanging down and really doesn’t have as many friends as she used to have.’ So it wasn’t that they were incapable of empathy, it was much more that they were in a culture in which they were being encouraged to be cruel to another kid to enhance their own status instead of really letting their feelings of empathy for her have an outlet.”

When I heard this part, I immediately thought of bankers and wondered just how many of them are living in Connecticut.

Catholic Bishop Responds to The Nuns’ Story

Terry Gross followed up her interview with Sister Pat Farrell of the Leadership Conference of Women Religious with the view of the church as presented by Bishop Leonard Blair of Toledo, Ohio.  Bishop Blair lead the commission that investigated the nuns and wrote a report criticizing the sisters for not sticking to church teachings.  The Bishops are planning to take over the LCWR and impose conformity on it.  You can listen to Bishop Blair’s interview with Gross here.

I’m at a loss for words.  Wait, that’s not quite right.  What I mean to say is that the bishops seem to be undergoing a process of self-immolation on a public stage because if what I’m hearing is the “logic” of the church, it is incomprehensible.  I find the bishop’s response to Sister Pat’s interpretation of obedience to be particularly confounding.  Sister Pat says she interprets her vow of obedience as obedience to God and her conscience.  You would think that God’s word would be the ultimate authority.  Not so, says the bishop.  The sister isn’t allowed to get around the obedience to the church even if it is in contradiction to what the sister interprets as God’s will.  The church is a hierarchy and the sister is not in it.  She doesn’t have the right to discuss or question anything.  She only has the duty to do what she’s told, even if she thinks it’s wrong.

And you know, that’s probably ok.  I mean, if you’re going to be a believer of a certain religion and that religion says you must follow us unquestioningly and not rely on your own understanding, then you’d better do what they say or find another church.  The Catholic church is particular flavor of Christianity.  You need to accept that it’s always going to be lime and never fruit punch.

The bishop has more to say on the church sexual abuse scandal.  To me, he is saying that the church doesn’t have a problem with homosexuality and pedophilia (which don’t have to go together but these priests are not mature in their sexuality. It’s not a bug, it’s a feature of their teachings and training).  Bishop Blair attributes the sexual abuse cases to an evil that has gotten into the church.  And in some weird way he justifies the crackdown on the sisters as a response to that evil.  The priests and bishops need to refocus on church doctrine to keep themselves in line and so the first thing they do is make sure the sisters are conforming.

There’s more on human sexuality in marriage and contraception but with every issue, I feel like I’m hearing 2000 years of rationalizations layered into some bizarre accretion.  Somewhere back in the 4th century, the Roman empire co-opted early Christianity and Catholic dogma took a hard right turn forcing everything around it to twist itself into knots trying to keep up.  It’s like one of those old models of the solar system where the earth is the center and everything around it takes more and more complicated paths to explain observations of astronomical patterns, like retrograde orbits.  But hey, this is the Catholic church we’re talking about.  It only took them 400 years to forgive Galileo for being right.

This is what Sister Pat is up against.  And I have to say that if she stays in the church and complies with this assessment, she will need to lose her own conscience.  It will be substituted by some other entity’s conscience.  The loss is not just to herself though.  All of the people who depend on the assistance of her organization will be harmed by her compliance.  She’s going to have to make a choice.  She won’t be the first person to have to defy the church.  Martin Luther did it and that turned out alright, sort of.  But what Martin Luther did to church dogma, Sister Pat would be doing for women in general.

At some point, Catholic women are going to have to ask themselves what’s in it for them that can’t be provided by some other faith.  Is it true that God only speaks to one man in Rome and this holy representative made it to the top through piety and not politics?  And if there is a political element to his election to pope, doesn’t that undercut his authority in some respects?  He’s not the most holy or wise.  He’s just the most popular of the cardinals.  And if that’s true, then how do we know that they’re operating in the best interests of God?  And if they’re using their own judgement and not hearing from God directly, how is their conscience more reliable than Sister Pat’s?

I only ask but *she’s* not allowed to.  The Catholic hierarchy is telling her that this is what she signed up for, no matter how self-serving it is for the guys in charge.  If she wants to do things her own way, well, she’s not being a good Catholic.  It’s sort of like being a woman in the Democratic party.

It’s up to her.  Get in line and be silent and subservient forever or listen to God and her conscience, leave and  start her own order.  This might be the most courageous thing a Catholic woman has ever done.  It would be so significant that it would shake the hierarchy to the core.  Who knows, the Church might need to start asking some questions of itself.  Don’t wimp out, Sister Pat.

While we were out chasing phantom racists…

Pic courtesy of The Daily Show

…like magpies drawn to some shiny object, the fabulous banker boyz were deep sixing Elizabeth Warren for head of the new Consumer Financial Protection Agency.

(One of our commenters said that ‘racism has been weaponized’. Pretty much.)

I’m not surprised that they hate Warren’s guts.  The consumer finance industry is juicy with rent type devices.  Here’s a good example:  I tried to convert some dollars into euros for my daughter’s upcoming trip to France.  Went to my bank to do the deal.  No can do.  I would have had to order the euros 3 days in advance.  They don’t keep euros laying around, you silly customer of 22 years.  I didn’t have time for that so the bank directed me to a money changer in the mall.  So, I went there and found that they weren’t offering the current exchange rate.  No, their exchange rate was much higher.  Fees, you say.  Nope, worse than that.  The cashier said that the currency operator negotiated its own exchange rate for euros and then charged a fee on top of it.  The fee was waived if you exchanged more than $500.  But even if I had it, who in their right  mind sends a teenager abroad with more than $500 in cash?

The final rate for the exchange on July 6, 2010 at the ubiquitous ripoff currency exchanger was going to be $151.00 for 100€.  Needless to say, I passed, bought her a Visa with some emergency money on it and put her on the plane with her US cash, instructing her to get her host family to make the conversion at the French end, which they did for the correct exchange rate.

But wait!  There’s more.  We got to the airport and at the very last minute, got charged an additional $100 unaccompanied minor fee.  This fee pays for a flight attendant to take your kid’s passport, put it in an envelope, and escort the kid to the waiting family at the arrival gate.  $100 buckaroos.  Pay up or the kid never leaves Kennedy, which is a fate worse than death.  I mean, have you *been* to Kennedy?  Was there any mention of this fee at the time the (ridiculously expensive) ticket was purchased online where the kid’s age was clearly entered in the age field of the ticket form?  No, there was not.  The same thing happened to the host family on the French end resulting in a $100 last minute fee for their kid too.  Surprise!  Surprise!  (Should I mention the airline?  Ok, it was Delta)

See, with an Elizabeth Warren type, I’m thinking that abuses like this would happen with less frequency.  And the only reason they’re happening now is because there is no one watching the store.  Put in a less competent or committed individual and it will be one little rip off after another.  My little example from my “overprivileged” lifestyle is just the tip of the iceberg.  Consider all the ATM fees, the wireless fees that are *supposed* to go towards building better networks but don’t, the teaser rate mortgages, the financial services fees from people who are managing your 401K but don’t seem to think they owe you a decent return on your investment.  Stuff like that.  A billion here, a billion there and pretty soon we’re talking about real money.  *YOUR* real money.  Maybe the wealthy don’t think these fees are a big deal but the rest of us can’t afford to keep shelling out hidden costs and surprise last minute fees and astronomical interest rates.

Anyway, that’s what was going on while you were distracted by the unfortunate saga of Ms. Shirley Sherrod, may she live long and prosper at an agency that will appreciate her dedication and enlightened attitude.

More on what the new Financial Reform bill and what it will do, or NOT do, can be found in this Fresh Air interview with Benjamin Applebaum of the NYTimes.

Update: ABCNews reports that Warren will be “actively involved” in the Consumer Finance Protection Agency that she helped to create.  Oooo!, isn’t that special.  Maybe they’ll let her pick out an agency logo or choose the colors for the offices.  My leg is all tingly.  Actually, this news is depressing.  But don’t despair.  There’s probably another racism story in the works to take our minds off of it.

Sunday: Who is Sheila Bair?

Sheila Bair, 2nd most powerful woman in the world
Sheila Bair, 2nd most powerful woman in the world

If you want to hear Obamaphile Extraordinaire Terry Gross squirming in her chair, skip the Gene Simmons interview.  The most entertaining interviews this year have been the ones Terry has had with Theresa Ghilarducci, a pensions and retirement specialist, and Robert Kuttner who wrote and published the book, Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.  Kuttner is being clever here.  What he’s actually doing is challenging Obama.  During the interview, one gets the distinct sense that Kuttner *knows* that Obama is not a transformative president.  It’s not in Obama’s character.  But he is trying to force grim realities upon Obama in the hopes that he will step up to the plate and deliver.

Those grim realities, and the possibility that a new president with approximately 142 days of Senatorial experience is going to be facing the most serious crisis since the Great Depression, make Terry very uncomfortable.  It’s like, “What do you *want* from him???  He just gave you the warm fuzzies?  Isn’t this enough???  Presidentin’ is really hard!”  I just love this exchange:

Kuttner:  I think the whole point is that crisis can be turned into opportunity but that Obama has to be very bold in the way he proceeds.

Gross:  But that’s the problem, isn’t it?  I mean, there are so many places that have grave financial need now.  Cities and states, uh, infrastructure, bank bailouts, homeowner bailouts, the auto industry wants money.

Kuttner:  Hmm-mmm.

Gross:  I mean, there’s a kind of crisis in every sector, so how do you decide what your priorities are?  That’s going to be a really hard one for Obama, don’t you think??

Yes, Terry, we *do* think.  And we have thought this for some time now.  That is why we did not support Obama.  We thought it would be too overwhelming for a guy with no knowledge of the executive branch or how the mechanisms of government actually worked.

Terry seems genuinely shocked that the economy is seriously smothering her pleasure in the nation’s self-actualization over the Obama victory.  My advice is to enjoy is while you can.  The $^*( hits the fan when the inauguration is over and the drum lines go home to Georgia.

Kuttner mentions several possibilities for Treasury Secretary.  Larry Summers is at the top of Obama’s list but not Kuttner’s.  Summers was too involved in deregulation in the 90’s.  He also mentions Governor of NJ, Jon Corzine, to which I reply, “Take him!  PLEASE!”  But Kuttner points out that Corzine was once the CEO of Goldman-Sachs and we already have enough incest between Treasury and Wall Street.

Then he mentions Sheila Bair, the head of the FDIC.  You may be surprised to know that this woman that probably no one has heard of is the 2nd most powerful woman in the world behind Angela Merkel.  She’s a very smart, very tough administrator who was right on top of the bank mergers of recent months. Democratic Cogresscritters like her. She’s also a Republican but one who is friendly to regulation.  Weird.  I guess such creatures aren’t mythical after all.

So, here we have a well-respected, pro-regulation, Republican administrator who is also a woman.

Will Obama go with Bair for Sec. of Treasury?  And what will it say about the transformative nature of Obama’s presidency if he defaults to Summers, a deregulator who thinks women aren’t smart enough to compete with men in math and science?

Morning Java

Need to work again today. For some reason my employers continue to insist on productivity for money. It’s extortion, I tells ya’! In the meantime, here are some interesting pieces from around the web and the media:

  • On yesterday’s Fresh Air with Terry Gross, David Kirkpatrick handicaps the Republican race and explains why John McCain is so hated by conservatives. One of the more interesting tidbits is that Rush Limbaugh says the McCain, Clinton and Obama are indistinguishable and that the emphasis for conservatives this election year should be to elect more conservatives to Congress. Uh-huh, I can see where he’s going with this. Terry’s been doing a lot of outstanding political interviews this yea. Subscribe to the podcast, You won’t be sorry. And contribute to your local public radio station if you have a few bucks. (The MacBook Air is MINE!)
  • Digby throws her two cents in on the McCain nomination and how he will fare against either Obama or Clinton. I agree that their going to throw national security issues at Obama but where Digby thinks they won’t stick, I don’t put anything past the GOP when they crank up the perception management techniques. Many voters see McCain as a maverick, moderate Republican, which he isn’t. He’s just not as fascist as the crazies at CPAC. But he looks sane in comparison to them so when they start to make Obama look like Robert Mugabe on steroids, McCain’s going to look good.
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