Paul Krugman points out, one more time, that we haven't solved the root problems that led to our 5+-year recession:
Suppose you’re a hedge fund manager, getting 2 and 20 — fees of 2 percent of investors’ money, plus 20 percent of profits. What you want to do is load up on as much leverage as possible, and make high-risk, high return investments. This more or less guarantees that your fund will eventually go bust — but in the meantime you’ll have raked in huge personal earnings, and can walk away filthy rich from the wreckage.
What brings this to mind is a new Center for Public Integrity report on the lifestyles of the rich and infamous — finance honchos who brought down their companies and much of the world economy with them. So, Lehman’s Dick Fuld gets to ruminate on what went wrong in his Greenwich mansion or his 40-acre ranch, or maybe his 5-bedroom house in Florida. Jimmy Cayne of Bear Stearns plays bridge from his $25 million apartment in the Plaza Hotel. And so on down the line.
So it really was heads they win, tails we lose, with all the incentives being to take maximum risks and let the taxpayers clean up the mess.
Luckily, it won’t happen again, because we’ve had comprehensive financial reform. Right? Right?
As one commenter wrote, "The Occupy Wall Street folks were on to something."
Democratic candidate for Minneapolis Mayor Jeff Wagner has a new ad:
It's hathos-inspiring.
If the AP report is true, this is a complete win for the President:
Assad is now agreeing to preserve and strengthen that norm. He’s agreeing to sign the treaty banning chemical weapons — a treaty Syria has been one of the lone holdouts against. He’s creating a situation in which it would be almost impossible for him to use chemical weapons in the future, as doing so would break his promises to the global community, invite an immediate American response, and embarrass Russia.
This is, in many ways, a better outcome than the White House could have hoped for. Punishing Syria may or may not have actually reinforced the norm against chemical weapons — particularly if the strikes went bad and the American people punished members of Congress who voted for them. But Syria joining the treaty against chemical weapons definitely, almost definitionally, reinforces the ban.
This we call "diplomacy." And it's good to see when it works.
Security guru Bruce Schneier has two essays in the Guardian this week. The first explains how the US government betrayed the Internet:
By subverting the internet at every level to make it a vast, multi-layered and robust surveillance platform, the NSA has undermined a fundamental social contract. The companies that build and manage our internet infrastructure, the companies that create and sell us our hardware and software, or the companies that host our data: we can no longer trust them to be ethical internet stewards.
I have resisted saying this up to now, and I am saddened to say it, but the US has proved to be an unethical steward of the internet. The UK is no better. The NSA's actions are legitimizing the internet abuses by China, Russia, Iran and others. We need to figure out new means of internet governance, ones that makes it harder for powerful tech countries to monitor everything. For example, we need to demand transparency, oversight, and accountability from our governments and corporations.
Unfortunately, this is going play directly into the hands of totalitarian governments that want to control their country's internet for even more extreme forms of surveillance. We need to figure out how to prevent that, too. We need to avoid the mistakes of the International Telecommunications Union, which has become a forum to legitimize bad government behavior, and create truly international governance that can't be dominated or abused by any one country.
He followed up today with a guide to staying secure against the NSA:
1) Hide in the network. Implement hidden services. Use Tor to anonymize yourself. Yes, the NSA targets Tor users, but it's work for them. The less obvious you are, the safer you are.
2) Encrypt your communications. Use TLS. Use IPsec. Again, while it's true that the NSA targets encrypted connections – and it may have explicit exploits against these protocols – you're much better protected than if you communicate in the clear.
There are three other points, all pretty simple.
As London continues to suffer with perfect weather this weekend, I'm taking a moment to get in from the cool sunny breezes and small cumulus clouds obscuring almost 10% of the sky. Yesterday the temperature soared to an unimaginable 24°C, causing Londoners to seek solace by standing outside pubs in groups drinking lagers. Today things have cooled off to more realistic levels (19°C right now), but the sun continues to make Londoners miserable and wait the restoration of normal weather.
Anyway, I've been meaning to post this map, which shows the U.S. population by race—one dot per person. Here's Chicago:
The yellow area south and west of the Loop are mostly African-Americans; you can see the abrupt change where the Austin neighborhood meets Oak Park on the west side. White people are blue dots, so purple-ish areas are well-integrated, while bluer areas are not.
Other parts of the country have different stories. Play with the map and take a look.
The IRS has (correctly, I believe) ruled that legally-married couples get to file joint returns. All legally-married couples:
All legally married same-sex couples will now be recognized for U.S. federal tax purposes the same way as their heterosexual counterparts, the Obama administration said on Thursday.
As expected after a landmark Supreme Court ruling in June, the U.S. Treasury and Internal Revenue Service said:
“The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.”
I believe there was no other possible result under the Internal Revenue Code now that DOMA is dead, but I'm glad that the IRS saw fit to underscore the point.
Former law professor Barack Obama makes the case:
“This is probably controversial to say, but what the heck, I’m in my second term so I can say it,” Obama said during a stop at the State University of New York at Binghamton. “I believe, for example, that law schools would probably be wise to think about being two years instead of three years because [….] in the first two years young people are learning in the classroom.”
In the third year, he said, “they’d be better off clerking or practicing in a firm, even if they weren’t getting paid that much. But that step alone would reduce the cost for the student.”
He continued: “Now, the question is, ‘Can law schools maintain quality and keep good professors and sustain themselves without that third year?’ My suspicion is, is that if they thought creatively about it, they probably could.”
The remarks apparently were made off-the-cuff, and no further details were available from the White House. But experts said the notion – although not new itself, as American law schools were two-year endeavors through the 19th century – is gaining traction.
Wow, I wish there had been a two-year plan when I was a law student. For one thing, 1998 would have been a lot more fun for me. I found some of my third-year courses interesting, and in a couple of cases (Wills, Copyright) genuinely useful. But I'd already decided by third year that I had no intention of practicing.
If I'd actually wanted to practice law after earning my JD, then my third year would have been worse than useless. I may have made other choices—clinics instead of content courses, for example—but I'd still have spent a lot of money without gaining a lot of practical experience.
Last week the Justice Department and several states, including Texas and Florida, sued to stop the American—US Airways merger. Today a couple of them realized their error:
Political and business officials in Florida, Texas and North Carolina are asking the U.S. to reconsider its suit to block the proposed merger of American Airlines and U.S. Airways, saying the combined company would benefit their local economies.
Florida, Texas and North Carolina...are home to large hubs for both airlines.
American Airlines, which sought Chapter 11 protection in late 2011, is one of the largest private employers in Miami-Dade County. The carrier operates around 70 percent of the flights at the Miami airport, making it a dominant hub for flights to and from Latin America. Local officials have long promoted Miami as the “Gateway to the Americas.”
Yeah, I didn't understand that four of the six states who joined the Justice Department suits (these three plus Arizona) contain four of the five largest hubs of the two airlines—including the airlines' headquarters (American in Texas and US Airways in Arizona).
Even though I thought there would be a challenge to the merger, after I thought about how the challenge actually went down, it didn't make any sense. Obviously the people who depend on American and US Airways for their livelihoods agree.
Chicago has recently rolled out a several hundred DIVVY bike sharing stations, similar to the Citi Bike scheme in New York. For a small annual fee, or a moderate per-hour charge, you can take a bike from any DIVVY bike station and ride it to any other station within two hours. (The two-hour time limit keeps the bikes in circulation.) The city has a hundred or so stations now, with a couple thousand bikes.
Of course, not everyone is happy about the bikes, which help cut pollution, reduce traffic and noise, and are greenhouse-negative. A three-unit condo association near Wrigley Field sued the city yesterday because they don't want Those People on their block:
David Kolin and his wife, Jeannine Cordero, learned Tuesday that the area in front of their North Side condo building soon would be home to a Divvy bike-sharing station, one of hundreds the Chicago Department of Transportation is installing across the city.
"We don't think it's appropriate in a residential area to have this thing set up," said Kolin, an attorney. "It's not a very attractive thing to have. It's led to crowds already."
"It's hideous," added Cordero, also a lawyer. "It's less than 20 steps from our front door."
"We are aware of the request from a few residents to relocate the Divvy station away from their building on Pine Grove Avenue near Addison Street," CDOT spokesman Pete Scales said in a statement. "This residential street location was determined to be the safest for customers near the busy intersection of Addison and Lake Shore Drive. It is located in the public way, close to the curb on the street, and not on any private property."
It would have to be a pair of attorneys, wouldn't it? You don't like the bike rack on the city street in front of your house...why?
All I can say is, Mr Kolin and Ms Cordero: STFU.
The judge in the American Airlines bankruptcy just expressed doubts the airline will survive:
A judge asked AMR Corp for guidance on whether he should approve its plan to exit bankruptcy, in light of an antitrust challenge to its planned merger with US Airways Group Inc.
The request suggested Judge Sean Lane would hold off on approving AMR's plan at a hearing in U.S. bankruptcy court in New York on Thursday.
Lane said he had "lingering doubts" as to whether it was appropriate to confirm the plan. He told AMR, its creditors and other parties in the bankruptcy to submit briefs on the issue.
Lane said he had strongly considered canceling Thursday's hearing but decided to give parties an open forum to discuss the antitrust challenge.
Absent the antitrust challenge, Thursday's hearing would have been the final step in AMR's exiting bankruptcy and implementing its merger.
This really sucks, not just for American's shareholders, but also for air travelers in the U.S. The Justice Department believes the merger will hurt air travelers, but Cranky has some good analysis why this isn't so. Plus, the Justice Department has had access to the competition data for years; that makes the timing of their case look suspect, in my mind.
And personally, my biggest beef with all this concerns the bank of frequent flier miles I've built up for many, many years now. If American can't merge with US Airways, all my miles might vanish. (US Airways has promised to honor them if the merger succeeds.) The judge and the Justice Department have made that much likelier this week.
My worst fear is that the bankruptcy proceedings could turn so rapidly there won't be time to cash in any of the miles, or even if I can cash them in, there won't be an airline around to honor the award tickets when I try to use them.
What, on earth, was the Justice Department thinking?