Dan Froomkin- gone from WaPo

A shame.

More later.

first you get this:

I must say that, to my mind, Steele has a point. It isn't the judicial rulings that trouble me so much as her non-judicial opinions and mindset. The constant, oppressive consciousness of her identity - racial and gender - and the harping on it so aggressively so often does strike me as a classic mode of victimology deeply entrenched in her generation. I don't think it's disqualifying and I don't see any crude racialism in her rulings, but I do think it shows that for Obama, this kind of racial/ethnic view of the world is so endemic it's invisible to him. And it's off-message for his candidacy and life. But, hey, maybe he feels Scalia needs to get as good as he gives.

To which you quite rightly get this

You wrote,

The constant, oppressive consciousness of her identity - racial and gender - and the harping on it so aggressively so often does strike me as a classic mode of victimology deeply entrenched in her generation.

Maybe I have missed something, but I haven't seen any constant harping by Sotomayor over the past few weeks, and I haven't heard any in her history. I do see a constant harping on the "wise Latina" remark (made 9 years ago) and a constant harping on the Ricci case - not by her, but the abyss of 24-hour cable news. Yes, Obama has spoken about her race and gender. But it is an historic pick, and deserves mentioning what she has accomplished. She is a role model for young Latinas and Latinos growing up in inner cities, and the community is better for it.

and this:

So, I guess I was guilty of casual - if unintended - prejudices against gay marriage. Your constant harping (yes, harping) on the subject forced me to acknowledge the sanity and rightness of your argument for gays to marry.

So I'm too weary to describe all the ways in which your post lacks self-awareness. Please reflect on it some and let your readers know if further reflection brings the outrageousness of that quote into sharper focus.

To which our dear Mr. Sullivan replies:

The distinction I draw is the distinction made in Virtually Normal. I do not consider myself better than anyone because I'm gay; I do not think gay people have some superior wisdom; I seek civil equality so the sharp division between homosexuality and heterosexuality can eventually be elided. I've never shied from being honest or talking and writing about being gay, but I hope the goal of all of it is to move beyond the reductionism of the victimology of the left, not to entrench it. If Sotomayor had written an essay called "The End Of Latino Culture" or had written of the day she hopes Latino-specific political organizations disappear, I'd feel differently about her non-judicial record.

Let's go to Sotomayor, shall we... Where she acknowledges a shared idea of utopian justice, while retaining the practical knowledge that William Gaddis so bluntly summarized when he opened A Frolic of His Own "Justice? You get justice in the next world, in this world you have the law.":

For all of us, how do change the facts that in every task force study of gender and race bias in the courts, women and people of color, lawyers and judges alike, report in significantly higher percentages than white men that their gender and race has shaped their careers, from hiring, retention to promotion and that a statistically significant number of women and minority lawyers and judges, both alike, have experienced bias in the courtroom?

Each day on the bench I learn something new about the judicial process and about being a professional Latina woman in a world that sometimes looks at me with suspicion. I am reminded each day that I render decisions that affect people concretely and that I owe them constant and complete vigilance in checking my assumptions, presumptions and perspectives and ensuring that to the extent that my limited abilities and capabilities permit me, that I reevaluate them and change as circumstances and cases before me requires. I can and do aspire to be greater than the sum total of my experiences but I accept my limitations. I willingly accept that we who judge must not deny the differences resulting from experience and heritage but attempt, as the Supreme Court suggests, continuously to judge when those opinions, sympathies and prejudices are appropriate.

There is always a danger embedded in relative morality, but since judging is a series of choices that we must make, that I am forced to make, I hope that I can make them by informing myself on the questions I must not avoid asking and continuously pondering. We, I mean all of us in this room, must continue individually and in voices united in organizations that have supported this conference, to think about these questions and to figure out how we go about creating the opportunity for there to be more women and people of color on the bench so we can finally have statistically significant numbers to measure the differences we will and are making.

By the way, a very balanced speech made in front of an organization promoting Latin Lawyers, where modestly (unlike Sullivan, I think) she promotes Latin judges as a source of (statistical) plurality which undoubtedly would hopefully close the gap between justice and the law while acknowledging that judicial modesty should triumph above all...

No victimology, simply thinking through the consequences of identity on judicial decisions. A rather rational and humble position, especially considering her Souterian reliance on precedent and legal process in what I've seen of her decisions.

P.S. The irony of Sullivan's reply is compounded by the fact that today Sullivan has been running a series of letters from various overachieving (gay) readers about how being gay has shaped their achievements.

P.P.S. Did he read this speech? I doubt it.

Lutz is a Putz, con't

Kausfiles (when it actually writes posts rather than tweets) can do some good stuff.

Take this takedown of Bob Lutz.

As I've stated, if you want to know why GM is in the state it is-- analyze the mindset of not only this guy, but the people who hired him and thought he would be a good spokesman...

Inflation, continued

I really like Dan Gross writing at Slate on matters of the economy and he has a sharp analysis of the Ferguson/Krugman feud. Sharing Krugman's skepticism about these "Bond Market Vigilantes" who appear to caution about government spending whenever the Democrats start spending.

Here is a particularly relevant paragraph to the points I had made earlier:

Both the Fergusonians and the Krugmanites (of whom I count myself one) err in reading too much into short-term fluctuations in bond prices. There's so much more at work. Randall Forsyth of Barron's explains a technical reason for the short-term spike in 10-year and 30-year rates. Banks and financial institutions that own mortgages hedge their exposure to refinancing by buying and selling Treasury bonds. When mortgage rates start to rise, as they've done in recent weeks, institutions do the opposite and sell. "While mortgage investors previously had bought noncallable Treasuries to offset the risk of their mortgages, mortgage investors have unwound that hedge, selling their Treasuries," Forsyth writes.

Essentially reading the long-term out of fluctuations of the market is a fool's errand.

p.s. Great line from Gross:

In evaluating the relative claims of the pessimists and the optimists, you also have to evaluate the messengers. And in this instance, the Fergusonians lack credibility. H.L. Mencken tagged the Puritans as people possessed of the "haunting fear that someone, somewhere, may be happy." Ferguson represents a strain of intellectual Toryism bedeviled by the haunting fear that someone, somewhere may be getting social insurance. (Fellow sufferers include Clive Crook, Andrew Sullivan, and George Will.)

What I'm reading...

Image: from New York Times article on the lovely Lara Logan

Big fan of the lovely Lara Logan... Pictures of "Thinking People's Sex Symbols" will grace this feature... As I find them (or you non-existent readers) send them to me...

From the Times, there is Ross Douthat . I know I'm supposed to be a fan of Douthat, because he is a Conservative with ideas, he's young, former blogger, blah, blah, blah... But reading he and Brooks today make me think that a banality which expresses itself as superficially clever is the key feature for an NYTimes column.

Citing the ways that the Supreme Court has become a legislature by other means, he proposes installing a super-majority vote, to remind voters that the court is "answerable, when all is said and done, to us." Except it isn't... It's answerable to the Constitution. Do Justices legislate from the bench? Yes, it is impossible not to. However, the goal is to find justices who do it inadvertently rather than explicitly. With the departure of Souter, this may be a pipe dream (as Douthat suggests), but it should indicate that rather than changing the court, we should be improving our legislators' understanding of how the court functions.

Douthat understands this is a republic not a democracy, right?

I've been underwhelmed by Douthat.

Big fan of "How the World Works" from Andrew Leonard... However, I thought everyone agreed that the global spike in oil prices last year this time was bubblicious?

Oh, yeah GM is bankrupt

Here's why:

*The WSJ [shocker] blames the UAW...
*Brooks blames everyone, but mostly the Unions (and the Gov't).

Me? I would have shorted the company had I ever met this guy before the 60 minutes special on electric cars, where after repeatedly mispronouncing Silicon as Silicone and denying global warming, he wonders why people think Detroit is dumb:


http://en.wikipedia.org/wiki/Robert_Lutz

Inflation

Perhaps consistent with the old saw that there is more information out there then there is stuff to know about, people have started to worry about the inflation that may arrive when this crisis passes...

Niall Ferguson worries about it... Krugman doesn't... people with numbers compare it to Japan and say it isn't a big deal.

and so on.

A thought experiment: Most of the excess cash has been flushed into banks through the various programs (TARP, quantitative easing, etc.), who have been largely sitting on it to meet capital requirements and because they are scared. Meaning while the money supply has increased, the money in circulation hasn't. In policy terms (several months ago-- I know, I know no one cares about several months ago) there was a lot of discussion of setting capital requirements on a sliding scale so that banks would be forced to lend less of their money when times were good (allowing bubbles to inflate less rapidly) and more when times are bad (stimulating the economy). Say this idea of the sliding scale of capital requirements passes (an idea, I would think, the Obama administration would be amenable to) and, independently, the economy improves-- while lenders are no longer scared they can't go nuts, because reserve requirements are increased which while expanding the money supply avoids huge inflation.

[Obviously, someone smarter than me should correct me if I'm wrong here]

Is this likely? I don't know... But it is something to think about: predicting anything at this stage of the game is a silly thing, since I do think (and would overcome my bias against predictions) that once we are out of the woods, the banking regulations are going to be reexamined.

Sign of the Times

Following a link from Andrew Sullivan I discovered this ad from the national review:



A play on the famous William Buckley quote: "Standing athwart history yelling stop." Buckley's "history" implied a Burkean conservatism a legitimate program you could debate with, because it contained ideas (a theoretical apparatus, an independent mindset, a suggestion that rather than letting "history" run roughshod it should be considered and debated etc.), "Washington Liberals" implies nothing really. [Other than perhaps a particularly cynical Rovian Republicanism.]

On a related note, Brookhiser had an Wall Street Journal editorial calling for the return to William Buckley and the way his conservative ideas were in dialogue with history... But Buckley, as Brookhiser notes, allowed thought through history at every turn. He was thinking through, not just reacting.

This seems to be the major difficulty of the current Republican party and its intellectual apparatus:

It is simultaneously resting on its laurels (as it does in evoking this slogan) and panicking (as the content of the slogan implies).

I don't think 2006 and 2008 were as bad as they seem for Republicans, but I think they need to get past the paradox that they are trapped in and that seems encapsulated in this ad.

How this blog (waste of time? opinion rag without paper?) got started...

Unemployed dissertation writer that I am, I read a lot of blogs on politics and then, (when the economy and my future as an educator at the post-secondary level went in the tank) finance. I'd read something stupid and post a comment about it-- see here, for instance.

What set me off most was this post from Andrew Sullivan. Irritated by his misunderstanding of the issue (see the great bronte capital for an explanation of this misunderstanding), I fired off a snarky email...

Dear Mr. Sullivan,

I am a long term reader of your blog and admire you for your independent stances on numerous issues. However, when you use a term such as "zombie banks" to describe the current situation (with its connotations to Japanese banking and its "lost decade"), you misunderstand the nature of these Japanese problems and of the problems here in the United States. They are not at all alike.

Granted you are parroting your talking points from public intellectuals who are similarly misstating and I could explain this to you more clearly, but I think it ridiculous that someone who is paid to "blog" on these issues should be receiving free explanations. Instead I would point out that the fact that you continually misunderstand these economic issues should serve as a reminder of the old saw, "Better to remain silent and be thought a fool than to speak and remove all doubt."

The capital lesson of intellectual responsibility...

Impolitic and snarky, yes, but it gets to my fundamental point... I don't have a particular axe to grind other than thinking most of the punditocracy is a waste. There is way too much information out there for you to have a valid opinion on everything...

Though I'm going to try-- since as is often attributed to Mark Twain (though I think Robert K. Mueller actually said it):

Those who think they know it all are very annoying to those of us who do.

No, really, my goal is to treat issues as in depth as possible and try to point out certain short cuts in people's thinking that ignore the multitude of factors involved in particular issues or over or under-emphasize those factors... I should make clear that I am not an econ. or quant guy, public policy specialist, etc. merely what we would call an over-informed citizen with too much time on his hands...

Welcome

Hello, welcome to "Ignorance Arbitrage." I will be posting a "mission statement" at some point, but I wanted to begin with a comment on a recent article from on Harvard Univeristy's Endowment that Felix Salmon posted as well.

I think most commentaries on overlook in this discussion is that Harvard was without a fund manager (though, in his defense Felix Salmon did note this here). Active institutional portfolio management strategies when crossed with passive management equals the liquidity disasters that Harvard may be (have been, see my second point) facing. Yale-- under Swensen's tenure-- while losing money has largely avoided these liquidity difficulties as Swensen is happy to point out.

Moreover, one wonders how much the reporting of Harvard's difficulties is lagging the data-- now that credit is "easier," I imagine that Harvard's illiquid assets are more liquid than they were two or three or six months ago. Some of their value may have returned as well. Moreover, the data on "calls" from PE firms hasn't changed in several months-- is it still a current and pressing crisis?

I'm not denying Harvard (and the Academy in general)may be hurting right now, but to extrapolate from this moment to declare this the end of Harvard or to use this information to condemn the "new" endowment strategies is a bit short-sighted (ignoring, for instance, the fact that illiquidity allowed Harvard to have 34 billion to fall from). I'm not one for predictions, but I can't help but think that the return from crisis in the financial world is going to make us think that the reaction to this particular aspect of the crisis may be overblown and a bit late.