Archive for July, 2013

Uh-Oh

Posted on July 31st, 2013 in Uncategorized | 1 Comment »

Business Insider is reporting that President Obama just gave a “full-throated defense” of Larry Summers during a small meeting with Congressional Democrats….

Social Media Slapdown

Posted on July 30th, 2013 in Uncategorized | No Comments »

Over the weekend, NPR host Scott Simon tweeted about his mother’s death—as it happened.

Heart rate dropping. Heart dropping.

On Facebook, author Joe McGinnis lambastes Scott Simon for tweeting his mother’s death.

Simon tweets: “I tell her millions of people love her.” That’s loving and kind and a beautiful thing to say. I hope she heard it and that it comforted her. But it’s not true. One cannot “love” someone one did not know. To suggest otherwise is to debase the concept of love. Mr. Simon feels beloved by his many fans. But very few of them knew his mom. Obviously, I’m not intruding on his very genuine grief, but I must point out that Mr. Simon opened the door to debate about the propriety of tweeting intimate moments in order to keep fans feeling connected to your innermost self.

You know where I stand on this…and I’m particularly enamored of McGinnis pointing out that, actually, millions of people don’t/didn’t love Simon’s dying mother. If I were dying and someone said that to me, I’d head for the exit straightaway.

As McGinnis argues,

Building a Twitter following by violating the final private moments of your own mother seems to me, to put it mildly, tone-deaf and crass.

Yes.

Apparently the ‘roids are Kicking In

Posted on July 30th, 2013 in Uncategorized | 3 Comments »

Watch as David Ortiz destroys a dugout telephone…and also smashes Dustin Pedroia’s skull to pieces while he’s at it. (This last is no joke—that bat looks scary close to hitting Pedroia.)

Kinda reminds me of this Roger Clemens moment….

Hitting .329 with 20 home runs at age 37, Ortiz is having a suspiciously good season.

Big Nick’s and the End of Manhattan

Posted on July 29th, 2013 in Uncategorized | 2 Comments »

Anyone who’s ever lived on the Upper West Side of New York, or traveled there from the depths of downtown, knows Big Nick’s restaurant on the corner of 77th and Broadway. I first learned about it when I moved to the city in 1995. My then-girlfriend and I lived in a brownstone at 77th and West End, and we quickly became acquainted with this local icon. Tucked into a tiny, 1000-square-foot space in which not an inch was wasted, Big Nick’s had the best burgers in the area, great fries, pizza, and a ridiculously long menu with some surprisingly ambitious entries. I used to love watching the food be prepared, as its cooks seemed to find various ingredients tucked away in shelves and drawers and refrigerators invisible to the eye, like something out of a Harry Potter story. Big Nick’s was open 24 hours a day, and it was a great place to end a night on the town. My girlfriend used to love the tuna melt, which must have weighed about a pound. (She had the metabolism for it.) On weekends, we would wake up late and order pancakes delivered to our apartment, all of a block away.

So…you know the end of this story. After 50 years at the location, Big Nick’s is being forced to close; its rent is going up from $42, 000 to $60, 000 a month. For 1000 square feet.

The owner of Big Nicks’ space is the owner of the Belleclaire Hotel above it, which has been a terrible neighborhood tenant. I lived in that apartment for a decade. During that entire time, the sidewalk along the Belleclaire was completely dominated by a scaffolding, because it was cheaper for the hotel to pay for the scaffolding than to actually make the repairs that required it for the protection of pedestrians.

For a decade.

You can guess what’s taking Big Nicks’ place: a bank.

I don’t live on the Upper West side anymore, haven’t for almost almost ten years—the mall-ification of the area is a big reason why—and certainly this process has been going on there for many years. But this is the official death knell of the Upper West Side, which needs every bit of local color it can get. What a shame.

The Wall Street Journal Slams Larry Summers

Posted on July 29th, 2013 in Uncategorized | 24 Comments »

The debate over who should be the next Fed chair didn’t let up much over the weekend, which is primarily a function of Larry Summers’ recent status as the main contender; everything Summers touches gets hot-hot-hot.

On Saturday the Journal ran with a piece pointing out the conflicts of interest Summers has because of his buckraking (something he once said he would not do)—”Summers Faces Hit Over Potential Nod Because of His Wall Street Ties.”

The Journal reports that not only has Summers been working with hedge fund D.E. Shaw, investment group Andreesen Horowitz and wealth management firm Alliance Partners, he has also been consulting for Nasdaq and Citigroup (Bob Rubin’s old firm, surprise, surprise).

The recent financial crisis has focused attention on the Fed’s role—and shortcomings—as a financial regulator. The Fed has more direct oversight of and authority over big banks, including Citi, than any other regulator. Mr. Summers’s work for Citigroup is almost certain to be cited by critics suspicious of him for his advocacy of financial deregulation during his years in the Clinton administration, where he served as Treasury secretary. Some critics say the recent financial crisis had its roots in deregulatory efforts.

In an editorial today the Journal slams both Summers and competitor Janet Yellen, the latter on the basis of her support from advocates who think Obama should choose a woman. This is slightly unfair, of course, as no one said a word about gender until Summers’ name started getting talked up, and Yellen’s qualifications are unassailable. And the Journal takes aim at Summers again.

Citibankers will consider it a bargain if their man ends up running the agency with primary responsibility for regulating Citigroup. In the Dodd-Frank world, too-big-to-fail banks are public utilities that resist regulatory advice at their peril. If he returns to the heights of financial political power, Mr. Summers wouldn’t forget who helped him build a comfortable nest egg.

This is absolutely true. But it’s also true that Summers wouldn’t need to be on Citigroup’s payroll to be looking out for its interests. The Bob Rubin connection alone would suffice, but the truth is, Summers has been a shill for Wall Street dating back to the financial crises of the 1990s, when he and Rubin, at Treasury, consistently fought to get irresponsible banks repaid at the expense of millions of struggling and unemployed people.

Still, the Journal’s repeated attention to this theme is significant; the White House now knows that it does not have the Journal’s support for the choice of Summers.

Perhaps the smartest writing I’ve seen about Summers and the Fed appeared in Politico over the weekend. Economics blogger Mike Konczal details in this piece exactly what the Fed does and why that makes Summers the precise wrong choice.

The next chair of the Federal Open Market Committee, as the powerful body that controls the U.S. money supply is formally known, will face three major issues during his or her tenure. The first, and most urgent, is to determine how to navigate our economy out of the current doldrums. The second is to decide how aggressively to enforce the new set of financial reform rules that emerged from the financial crisis. And the third, crucially, is to find a way to rebuild monetary policy and the Fed so that the United States won’t see a repeat of the current crisis. Yellen is clearly the superior candidate on all three counts.

Konczal is particularly good on the Fed’s role in financial regulation and why its importance there should disqualify Summers.

The last responsibility of the next chair will be how to enforce the new rules of the financial sector. Summers’s role in the financial deregulation of the 1990s [is] widely known, as are his dismissals, as late as 2005, of those who thought financial innovation could increase the risks of the financial sector. But Summers has also been on the wrong side of many key debates more recently: He didn’t support a bankruptcy solution for the U.S. foreclosure crisis (after saying he’d fight for it to get Congress to vote for the second round of TARP). He was reportedly against including a ban on hedge fund like trading at our commercial banks — the Volcker Rule — during financial reform. Meanwhile, as finance blogger Bill McBride notes, Yellen was making the correct calls on the housing bubble and its potential damage.

Konczal gives a terrific hypothetical: The Fed will soon be deciding, singlehandedly and in private, whether “financial firms like Goldman Sachs can have large, extensive businesses in physical commodities such as aluminum.” (You will remember that the Times just found out that Goldman has been manipulating the aluminum market, costing consumers billions of dollars annually.)

Given Summers’ snuggly ties with Wall Street, which way do you think he’d lean?

The question, of course, is whether the President cares about all this anti-Summers backlash. One argument suggests that he does—why else float Summers as a trial balloon, if not to see what the reaction might be? The other argument is that the President wants to anticipate the reaction so that when he picks Obama, the White House knows how to spin the pick.

Either way, it’s the kind of situation where you really do think that the President has some serious blind spots…

Larry Summers and the Race for the Fed

Posted on July 26th, 2013 in Uncategorized | 3 Comments »

When you think about it, the resurgence of Larry Summers is remarkable, and says something commendable about him and something unfortunate about the way higher education is generally perceived and something kind of depressing about the short-memory times we live in.

Eight years ago, Summers couldn’t have been appointed dogcatcher. He resigned from Harvard a massively unpopular figure on campus (although to be fair, many students liked him, since he was something of a celebrity and he bought them pizza; students at Harvard are desperately grateful when any authority figure notices them). Summers was despised by women who knew virtually nothing about him except that they thought he thought they were genetically ill-equipped at science and math. He was despised by the faculty from which he had begun his rise to stardom. He was distrusted by African-Americans for his shameful treatment of Cornel West. (What did Cornel West ever do that Larry Summers has not since done in multiples?) And he had lost the most prestigious job in higher education in a short—but felt much longer—five year period.

Eight years later, Summers is, according to some reports, President Obama’s leading choice to be the next chair of the Federal Reserve.

The current buzz about this story really began yesterday, with a Washington Post piece by the respected DC-reporter Ezra Klein.

All else being equal, President Obama would like to choose Larry Summers, Klein and co-author Evan Soltas wrote.

On the merits, they think the preference many on the left have for Janet Yellen is a bit puzzling. Yellen and Summers are both strongly committed to reducing unemployment. They’re both committed to implementing Dodd-Frank — as much as the left mistrusts Summers on financial regulation for his actions in the 1990s, the White House believes that he, like many others, is strongly committed to regulating Wall Street now. They see a lot of the opposition to Summers is based on bad or outdated information.

And here’s something that I found particularly interesting:

The White House is running a very insular process. People I would’ve thought are being heavily consulted report that they’ve had little or no contact with the White House. People who have been consulted are surprised at the superficiality of the discussions. If the president is making any calls to ask for advice himself, he is making very, very few of them. This is a dynamic, of course, that favors a candidate like Summers who knows the inside players extremely well ….

Klein and Soltas’ post set off a flurry of econ-blogging from people who think Summers would be a terrible choice.

A couple examples:

Felix Salmon:

The choice of Summers would also be the clearest signal yet that Obama feels that he did what needed to be done to deal with the financial crisis, and that financial reform is, for the rest of his presidency, going to be a very low priority. Summers is a deregulator in his bones; he didn’t like the consumer-friendly parts of Dodd-Frank, and his actions have nearly always erred on the side of being far too friendly to Wall Street. He considers monetary policy to be largely irrelevant in a zero interest rate environment, and there is no chance whatsoever that he would take a robust leadership role with respect to the Fed’s other big job, which is regulation. If you want to repeat all of the Clinton-era mistakes of financial regulation, you can’t do better than appointing Clinton’s very own Treasury secretary.

Janet Yellen has all the makings of an excellent and prescient Fed chair — but she’s a White House outsider, and a woman. If Obama allows Yellen to be thusly disqualified, he deserves all the outraged dismay that will surely follow any Summers nomination.

HuffPo:

Leading Democrats are struggling with the idea that President Barack Obama may actually nominate economist Larry Summers to head the Federal Reserve. If he does, he’d pass over Fed Vice Chair Janet Yellen, who saw the warning signs of the 2008 financial collapse, for Summers, whose deregulatory advocacy as treasury secretary contributed to it.

Salon:

After contributing to the crisis, and then losing $1.8 billion for Harvard by investing most of their cash reserves in an endowment stuffed with risky trades, Summers denied the existence of the housing bubble. At the Federal Reserve annual conference in Jackson Hole, Wyoming in 2005, right before the crash, economist Raghuram Rajan warned of the imminent catastrophe in a formal paper, arguing that excessive risk-taking had surged, and that the banking system faced a “full-blown financial crisis” from the sliver of toxic securities on their own books. Larry Summers was the first to stand up and attack Rajan, bellowing that he found “the basic, slightly lead-eyed premise of [Mr. Rajan’s] paper to be misguided.” Incidentally, Janet Yellen spoke publicly about the risks of the housing bubble around this same time.

In short, if we wanted to pin the crisis on one person, Summers would be a viable candidate.

Following this day of Summers storms, the Times joins in this morning with a piece about the gender subtext of choosing Larry Summers over Janet Yellen. Yellen, the Times points out, is one of a small group of female economists who have managed to break into the Obama administration’s inner circle. (Christie Romer, to whom Drew Faust denied tenure, is another.)

Summers, on the other hand, has the support of several White House insiders, like Jack Lew, Gene Sperling and Jason Furman, and some Wall Streeters, like Bob Rubin, and Sheryl Sandberg, whose career Summers boosted when he secretly gave her the okay to digitize Harvard’s libraries for Google.

The Times plays up the gender angle:

the choice also is roiling Washington because it is reviving longstanding and sensitive questions about the insularity of the Obama White House and the dearth of women in its top economic policy positions. Even as three different women have served as secretary of state under various presidents and growing numbers have taken other high-ranking government jobs, there has been little diversity among Mr. Obama’s top economic advisers.

“Are we moving forward? It’s hard to see it,” said Ms. Romer

To me, the idea that anyone would appoint Larry Summers to a hugely powerful, highly un-democratic position seems the height of folly—an invitation for him to abandon all his attempts at human decency and revert to his overbearing, egoistic, bullying persona.

So to find out what’s going on, I had a long talk with someone who knows all the players and is considerably better informed on the situation than I am.

The choice of Summers is indeed the way the White House—read: Obama—is leaning, this person said. That’s why you’re seeing all this stuff in the press; the White House is putting it out there, vetting the reaction to a Summers pick. Why? Well, the argument that Summers was an architect of deregulation and is therefore partly to blame for the financial crisis doesn’t cut with Obama; deregulation happened in the mid-to-late ’90s, the economic crisis happened a decade and change later, and the real villain, the president believes, was leverage. Instead, Obama is influenced by the economic advisors with whom he talks daily: Jack Lew, Gene Sperling, Jason Furman, probably Tim Geithner—all of whom are graduates of the Bob Rubin/Larry Summers school of influence. Moreover, said this source, Obama has always been infatuated with Summers’ “genius”—this was said with some skepticism—and Summers has always been very assiduous about sucking up to the president. Finally, because the overall economic news is good, Summers will get some credit for the economy’s positive momentum.

This may be why you see Yellen supporters raising the gender issue—because it’s the last, best card they’ve got.

I said at the beginning of this post that Summers’ rise from the ashes said something commendable about him, unfortunate about higher education and kind-of depressing about the short-memory times we live in. Let me elaborate. I think you have to commend Summers’ persistence; he does not give up. But part of his rebirth is due to the fact that so many outsiders have such a disdainful view of academia that, when Summers lost his job, he actually gained support in certain quarters of the populace whose inhabitants think of professors as liberal eggheads who don’t know a thing about the real world. And as for the sort memory issue—I do think that Summers’ anti-regulation stances are relevant, and so are his close ties with Wall Street, which has paid him millions of dollars in a not very long time and for a not very large amount of work. He was wrong on the merits of, say, deregulating derivatives. He was wrong on the importance of preserving creditors’ rights at the expense of ordinary people during the financial crises of the early ’90s. He was wrong on women in science. He was not only wrong about Andrei Shleifer, he lied about it. He was wrong on Zayed Yasin. He has repeatedly been vile in discussing the Winklevoss twins—this bit of video is one of the most appalling scenes of smugness and bad judgment you will ever watch.

Larry Summers has been wrong on many, many things, and he should not be trusted with power, especially the immense and un-democratic power of the chairmanship of the Federal Reserve, and he would be the wrong choice to chair that organization.

This Looks Good

Posted on July 25th, 2013 in Uncategorized | No Comments »

Even if it’s the kind of thing one has existential nightmares about.

Quote of the Day, Part II

Posted on July 25th, 2013 in Uncategorized | 1 Comment »

“Regardless of his motives or whatever animosity he engendered, it’s hard to watch what is now happening to him, what he is doing to himself, and not feel something close to pity for the guy.”

—sportswriter Sean Newell, writing about Alex Rodriguez on Deadspin. And I agree, by the way. A-Rod is an incredibly frustrating player and human being—but did he really do anything much worse than many other baseball players who aren’t subject to nearly the same level of snark?

Quote of the Day

Posted on July 25th, 2013 in Uncategorized | 1 Comment »

“For every [young illegal immigrant] who becomes a valedictorian, there’s another 100 out there who weigh 130 pounds, and they’ve got calves the size of cantaloupes because they’re hauling 75 pounds of marijuana across the desert.”

—Iowa Republican congressman Steve King, in an interview with conservative website Newsmax.

King also argued that the U.S. should not grant citizenship to millions of Latinos living in the U.S. because the new citizens would then drive up the cost of low-wage labor.

The Crimson Whitewash

Posted on July 24th, 2013 in Uncategorized | 13 Comments »

Two universities released reports this week of investigations into misdeeds at those universities. One report dug deeply into the relevant matters and excoriated some university officials. The other report conducted a pro forma investigation and concluded exactly what the university president had publicly said before commissioning the report: that any wrongdoing was purely the result of misunderstood policies and protocols.

The honest university: Rutgers, which is essentially the state university of New Jersey. The, shall we say, less-than honest university: Harvard.

Here’s the language from Harvard’s report:

All actions taken in connection with these email searches were conducted in good faith. The administrators from the University and the FAS who authorized, supervised and conducted these searches believed that they were acting in compliance with applicable email privacy guidelines. There is no evidence that anyone intentionally violated any requirement to give notice to the Resident Deans regarding these searches. Further, there is no evidence that any of the indviduals involved read the content of any emails that were identified as a result of these searches.

As Dana Carvey/Church Lady used to say, “Well! Isn’t that conveeeeeeeeeenient!

I’ve only read the report once, but it seems to me deeply, even fatally flawed. It lacks, for example, any discussion of methodology. It appears that the players in the scandal were interviewed—the report’s intro says that Keating “has interviewed persons having personal knowledge of the email searches,” but doesn’t say how many—and there’s no sense of whether they were under any kind of legal oath (doubtful) and therefore would have no particular reason to be wholly forthcoming.

Sometimes the report also makes me wonder about who *wasn’t interviewed. Take complete idiocy such as this, for example, from page 8 of the report, describing a back-and-forth between a Crimson reporter and Resident Dean X, who for some reason goes unnamed even though she apparently outed herself subsequently.

In an email, Resident Dean X [blogger: that is too funny] responded, clearly telling the reporter that the Crimson did not have permission to use any of the information that had been provided, including any direct quotes or general quotes from “a Resident Dean,” because the Resident Deans had been given clear instructions not to talk with the media bout Administrative Board matters. …The Crimson ran with the story anyway.

Naughty Crimson! To run with a story even though it hadn’t been granted permission. Apparently our legal expert is unimpressed with the First Amendment.

Was the Crimson reporter interviewed? It doesn’t sound like it. Why bother? That might contradict the story of Resident Dean X, which would certainly complicate matters.

I also love the part on page 25 where, having established that “Resident Dean X” was the leaker of Dean Jay Ellison’s email—apparently for entirely innocuous reasons—Evelyn Hammonds decides that this is not enough: She should then search Dean X’s personal email.

Thereafter, Dean Hammonds decided….to conduct further searches of Resident Dean X’s accounts, i this case both the administrative and personal accounts, because Resident Deans occasionally use their personal accounts for administrative matters. These searches were undertaken

That, my friends, does not pass the smell test. Dean X (!) already admitted that she had forwarded the emails. What’s the point of going further? Just to see if you can really nail her ass? Nobody expects the Spanish Inquisition!

It’d be easy enough to comb through this report and find plenty of similar instances in which common sense is papered over with legalese. And it’d probably be a lot of fun, too. But to do so would be to miss the larger point, which is that the issue here is not just whether the deans acted in good faith, or whether various Harvard policies were violated or not.

It’s not ultimately about the law; it’s about judgment. It’s about whether it was just plain stupid of Harvard officials to conduct a witch hunt over an email. There is abundant discussion of “leaks” throughout this report—as if Harvard were the Nixon White House. And yet Harvard doesn’t learn lesson one from Washington, which is that the hunt for the leaker typically does more self-inflicted damage than the leaker does. It makes you look small and petty and it invariably leads to abuses of power, like the ones that happened here.

And perhaps from a lawyer’s narrow perspective, everyone involved “acted in good faith” because they did not believe they were breaking Harvard’s rules. But this begs the question of whether trying to track down a leaker by any means available is in and of itself an act of bad faith—especially in a university setting. Dean Jay Ellison—the former Texas lawman—seems particularly at fault here. When his email on the case process is forwarded, Ellison doesn’t say, “Oh, fuck, I wish they hadn’t done that”—after all, nobody really reads those stupid and probably unenforceable legal disclaimers at the bottom of emails from various self-important and legalistic organizations—and sit down with his resident deans to remind them of the paramount importance of confidentiality. No, Ellison instantly launches a search for the leaker; he couldn’t be more gung-ho about conducting e-spionage to see who made him look bad. A commenter below congratulates Dean Ellison for asking that his own email be searched, saying that this is an act of honor; I suggest that it’s a basic way of avoiding looking like a total hypocrite and is something about which Ellison really had no choice. On page 24 of the report, Ellison admits pretty much the same.

But the real reason for this report isn’t about getting at the truth, or creating information for a debate on how to revise Harvard’s e-spionage policies. (Nobody seems to think that there’ll be a debate over whether Harvard should be able to read its employees’ email; it’s just a matter of when, where and why.)

The reason for this report is to protect the university against lawsuits, including a rumored threat of one from now-displaced dean Evelynn Hammonds as well as possible lawsuits from students affected by the cheating scandal. (That is, of course, why a lawyer was hired to write it, rather than, say, members of the faculty.) Hence all the good faith: Hey—we tried! And the real reasons for the e-spionage were 1) to protect against said lawsuits and 2) to keep, to the fullest extent possible, any news about Harvard’s cheating scandal from being covered in the press, thus damaging the university’s reputation.

And that is also why this whitewash of a report was produced. But reading between its lines suggests a more damaging picture: that of a university hierarchy obsessed with damage control and image preservation, dominated by bureaucrats and lawyers, where the tensions between academic freedoms and information technology are only discussed in so far as to establish the limits of the former. And so in the end, under the don’t-rock-the-boat leadership of Drew Faust, Harvard will glide through this without any enduring damage—from a public relations standpoint, that is—but with its virtues just slightly diminished, its values somewhat eroded, its purpose now just a little bit more pointless.