UP@NIGHT

Moral Hazard.  If you haven’t already heard about it, be prepared.  It’s a monster epithet.  The Republicans will be hurling it at those attempting to develop plans to assist defaulting home owners.  Namely, one President Obama.  I can already see Eric Cantor, the House Whip, parting the clouds to hurl his epithet from on high.  He’s positively giddy, I am sure, to be getting an opportunity to condemn liberal (or perhaps even socialist) politicians seeking to help people who have been “irresponsible” about their finances.

Moral Hazard refers to situations in which organizations or individuals are tempted to break or modify a contract if the risk associated with the agreement can be transferred.  With regard to the current mortgage crisis, if we set aside high rolling institutions, it boils down to this: home owners with mortgages agreed to pay lenders back on certain terms.  If the government now assists those who can’t keep up their side of the bargain, that is, make their mortgage payments, they are creating an incentive for future bad behavior.  The government is creating a moral hazard.  When viewed in these terms the so-called moral hazard issue can be understood as akin to the slippery slope dilemma.  Once you do X, say, have a beer, before long you will become an alcoholic.  Doesn’t sound plausible?  Okay, here is a more common one: if we provide birth control to young people, it will lead to rampant promiscuity.  Likewise, if we provide assistance to those who have gotten in over their heads by having mortgage payments that are too expensive, it will lead to people running around and buying things that they can’t afford (assuming that they will be rescued).  It will lead us (as a nation) to become irresponsible about our finances. QED

Ah, wait you say.  You think that this horse has been out of the barn for quite some time.   I couldn’t agree more.   I don’t think that helping a few million people (out of a population of 300 million) who are going to lose their homes is going to create a culture shift, that is, get the horse back in the barn. Perhaps Cantor and friends believe that by drawing a (Maginot) line in the sand they will begin a great transformation of our culture.   We will halt financial irresponsibility, etc.  There are labels for people who believe in magic of this sort:  radical right wing utopians.  Change just doesn’t work this way.  Further, these utopians would love to mislead us about what’s actually happened and frighten us about an imminent moral collapse.

1) Such radicals might say that people should have known better.  Many/most people who are in dire straights acted in good faith when they took out a loan to buy or refinance a home.  There was supposed to be a process in place that told them whether they were qualified or not.  Now you can say, well, they shouldn’t have listened to the banks that wanted to lend them money to buy a home.  But this would have been counterintuitive for most folks.  If a bank wants to lend me its money, it must know what it is doing.  It’s the  bank’s money, after all.  Why would they give it to me if I were a risk?  That’s a reasonable assumption.  And it’s one that the banks wanted us to accept.

2) I haven’t seen the banks, credit card companies, or mortgage houses doing anything to help inculcate the proper attitudes toward financial responsibility in the populace.  Quite the contrary.  They spent millions (billions) to advertise the virtues of easy credit.  The economy road on this paper tiger for years, and the bankers laughed all the way to their banks regarding how much debt that they could get people to absorb by offering items such as “teaser rates.”

3) Does anyone really believe that many folks are going to run out and start taking mortgages that they can’t afford, because they think that they can depend on the government for a rescue sometime in the future?  These are extraordinary times. Help that may come from the government now is not something that people will be able to depend on in the future.  Hell, they can’t even be sure that they will get it now.

4) The phrase “Moral Hazard” sounds very serious and terribly scary, as if the entire moral sky will fall if we succumb to granting aid.  Right wing radicals would love us to believe that the notion of “Moral Hazard,” and their contractual understanding of morality, should be at the center of all of our ethical and political deliberations.  It is the talisman that can hold big government at bay.  However, the kind of personal responsibility that it refers to is a piece of the moral puzzle that is our lives, not the whole puzzle.

We must keep our guard up to defend against a Moral Hazard tempest in a teapot (dome).  Republican discourse about MH associated with mortgages tends to focus on individuals.   They want to make sure that individuals are not rewarded for bad behavior.   But when one lives in a society in which wealthy individuals, rich bankers, CEO’s, etc, are regularly rewarded for bad behavior, it’s unproductive to start scolding the little guy.   There are bigger fish to fry.  And further, perhaps more importantly, holding fast to worries about MH in the current economic crisis is like saying that we should let the ship sink–and we are altogether in a ship of state on this one–so as not to reward the shipbuilders for having done a lousy job.  People like Cantor will argue that if we plug up the holes, we will just be doing the builders a favor.   And if we give home owners assistance, we will just be rewarding them for lousy planning and disrespect for contracts.  Even if this were true and things were this simple, which I dispute, we would still need to assist these homeowners in order to help stop the bleeding in the economy.  Their losses will continue to become our losses if we don’t stop the death spiral in the real estate market.

Deep commitments to broad stroke principles–for example, never create a situation in which you seem to reward someone for behaving irresponsibly–must not get in the way of common sense.  This is why we must all be pragmatists now.

And here is Late Night with Conan O’Brien – Stephen Colbert String Dance Off (2/17/09)

[See "Update" from February 15th below.]

Quickly, which of these pictures doesn’t belong with the others?  If you selected #3, the Guggenheim Museum, consider yourself smarter than most members of Congress.  Seems that Congress can’t tell the difference between a casino, a golf course, and a museum.

The Senate pulled the plug on 50 million dollars for the National Endowment for the Arts that was originally in the stimulus bill, a pittance really, given the size of the stimulus package.  But it then added insult to injury by attaching an amendment prohibiting the use of stimulus funds for, “any casino or other gambling establishment, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, arts center, or highway-beautification project.”  And even Senator Schumer signed off on this one.  (He claimed that it was an error.  Hmmm. This is the guy who recently brought us “Annie Oakley” Gillibrand as the junior Senator from NY. )  New York Magazine, 2/12/09.

It appears that Congress, unlike the president, is willing to accept the notion that the arts are just another form of recreation or entertainment.  The arts do entertain, and good entertainment is to be prized, but this is not all that they do.  The Germans have a term for what that arts can help accomplish: Bildung.  The word is not easily translated, and there has been much debate about how it should be understood.  But what can be said here (this is a blog, after all, not a treatise) is that Bildung suggests (personal or social) growth through education, experience, and creative endeavors.  Golf, for example, for all of its virtues as a sport, or casinos, for all of their character producing vices, will not generate Bildung.   But spending time with (great) works of art may, if one is open to them.   To put the matter succinctly, art is an individual and social good; it is educational in ways that casinos and golf courses are not.

I support the stimulus package.  (As a matter of fact, I would argue that it’s too small.)   I understand that there was a need to get the stimulus package through asap.  I understand that the Republicans remain caught in a time warp.  With tax cuts as their only mantra and the market still a god, they deserve John Boehner’s bombasts and Eric Cantor’s cant.  But come on, did no Democrats read this amendment?  First, the Democrats should have defended the money for the arts because of the unique role that they play in society.  (Let’s not, for example,  forget the role of artists in the WPA during the great depression.) Second, in practical terms, there is billions in this bill for people in all sorts of industries, but not a penny for artists, who also need jobs, and the non-profits that help support so many of them.  Let us also not forget that the performing arts are economic engines in many communities, and yet we invest relatively little in them as a society.   We expect them to live off private charity or outrageously priced tickets.  The result:  too many poor and middle class folks are cut off from the performing arts.  (Are you listening Schumer?)

And yes, the package is also unfair to those who work in zoos and aquariums, typically non-profits, whose budgets surely will be cut in these hard times. While it’s not clear that zoos generate Bildung, although they might, they are certainly educational and serve the common good.  (And they too employ people.)  Obviously Congress can’t tell the difference between this, a non-profit educational institution,

and this,

Qualcomm Stadium (The name says it all)

UPDATE, February 15, 2009.  “Saving Federal Arts Funds: Selling Culture as an Economic Force.” The New York Times reports that the 50 million for the arts was salvaged in the final bill.  In addition, the offending language comparing museums to casinos was removed.  Democrats, all is forgiven.  Republicans, you are still in the dog house.  Here is an excerpt from the Times column.

As the details of the final bill were being hammered out, tens of thousands of arts advocates around the country were calling and e-mailing legislators. Arts groups also organized an advertising blitz arguing that culture contributes 6 million jobs and $30 billion in tax revenue and $166 billion in annual economic impact.

The tide turned. In addition to preserving the $50 million allocation, the final bill eliminated part of the Senate amendment that would have excluded museums, theaters and arts centers from any recovery money.

“It’s a huge victory for the arts in America,” said Robert L. Lynch, the president of Americans for the Arts, a lobbying group. “It’s a signal that maybe there is after all more understanding of the value of creativity in the 21st-century economy.”

That Senate amendment, proposed by Tom Coburn, Republican of Oklahoma, had grouped museums, theaters and arts centers with implied frivolities like casinos and golf courses.

Thursday, February 12, 2009 was President Lincoln’s 200 birthday.  You might recall that in Lincoln’s second inaugural he spoke the words, “With malice toward none, with charity for all…”   Now charity is not exactly empathy, but they are in the same family of sentiments.

Enter David Vitter.   Lincoln’s 200th birthday found Vitter at a Chinese restaurant in D.C. equating Obama’s call for empathy for the downtrodden with “dictatorship,”  producing one of the great non sequiturs of the last couple of decades.    This is how the story was reported in Mother Jones (which, given Vitter’s record, I am inclined to trust).

Republican Louisiana Sen. David Vitter made a trip to DC’s Chinatown on Thursday to nibble on kung pao chicken and rally the conservative troops. Addressing the DC lawyers chapter of the conservative legal group, the Federalist Society, Vitter got right down to red meat. After quoting comments from President Obama suggesting that he’d like his judicial nominees to be able to empathize with the downtrodden, Vitter declared that demanding empathy in a judge was something you’d expect in a “dictatorship.” How empathy equates with repressive rule, Vitter didn’t really explain, except to say that it had little to do with ensuring checks and balances on an imperial government.

You might think that a senator would have remembered some of Lincoln’s most important words on this day. But not Dave.  Next time a judge is empathetic or shows some mercy, just remember that for Dave we are one step closer to a dictatorship.

But perhaps this is not just about Dave.  Are the Republicans losing it?  I mean, they made Eric Cantor House whip, a man who is certainly in over his head and seems not to worry about prevaricating.

Here are several labels that have recently and often been applied to Obama: pragmatist, bipartisan, compromiser, and centrist.   The Republicans take no prisoners strategy regarding the stimulus package–which has been driven not by concerns about pork, but by an ideology that still affirms that the market always knows best–has depended on using Obama’s bipartisanship to their advantage.  They typically view him as someone whose pragmatism guarantees a willingness to compromise and operate in a bipartisan fashion.  And yes, it’s true,  Obama would prefer bipartisan solutions.   But be not confused, Republican comrades, pragmatism and bipartisanship are not two sides of the same coin.

Obama, as I have argued elsewhere, is not only a political pragmatist, but a philosophical one.  Two points here:  1) Philosophical pragmatists are not dogmatists; they are falibilists who are suspicious of those who claim to possess certainty in political and ethical matters.  2) Broadly speaking, pragmatists seek what works.

Much confusion is possible regarding these points.  One might think that if someone doesn’t believe in certainty and also looks to what works, he isn’t deeply committed to any values.  This is specious inference.  Pragmatists can be deeply committed to any number of values.  They just don’t think that they have a direct line to the Deity regarding the truth of these values.

So, then, how does this relate to the Republicans’ misreading of Obama?  Republicans have been assuming that Obama’s desire for bipartisanship and compromise is at the heart of his pragmatism.  If they push hard enough, his pragmatism (read: desire to get things done “only” through compromise) will win the day for them.  They will be able to hold back the tide of reform.

But bipartisanship and compromise are strategies and goods, not absolute goods for the philosophical pragmatist.  The pragmatist respects them because they speak to his or her commitment to fallibilism and community, and because they might help us get the job done.  However, if they are failing as strategies to achieve pressing ends, a philosophical pragmatist will not hesitate to engage in triage.  If people don’t have jobs and are without medical care, if the economy is in a death spiral, well, we have an obligation to address these problems.  Be nice to do so through having everyone on board, but we can always return to pursuing bipartisanship another day.  It’s a good, not The Absolute Good.

If bipartisanship is not working as a strategy to get the stimulus package through, which Obama deeply believes is necessary for the well-being of the country, his political and philosophical commitments, and temperament, will move him to turn his energies to figuring out what will work.  And what will work here may turn out to be an offensive against recalcitrant Republicans whose failed policies cost them two elections, 2006 and 2008.  And you know what, he’s got the upper hand if he makes this move. (Republicans might think that Obama wouldn’t dare because he will need them down the line.  However, if they aren’t playing ball now, he can’t be sure they will do so down the line.)

A piece of advice to Republicans:  Don’t push this guy too hard.  You are dealing with a mindset that you haven’t seen in a couple of generations. You will end up regretting it. (He’s perfectly capable of wearing the black hat.)

(Image from The Boston Phoenix)

UPDATE, February  9th, 2009, PM.  The following is an excerpt from The New York Times of Obama’s first press conference as president:

So my whole goal over the next four years is to make sure that whatever arguments are persuasive and backed up by evidence and facts and proof, that they can work, that we are pulling people together around that kind of pragmatic agenda. And I think that there was an opportunity to do this with this recovery package because, as I said, although there are some politicians who are arguing that we don’t need a stimulus, there are very few economists who are making that argument. I mean, you’ve got economists who were advising John McCain, economists who were advisers to George Bush — one and two — all suggesting that we actually needed a serious recovery package.

And so when I hear people just saying we don’t need to do anything; this is a spending bill, not a stimulus bill, without acknowledging that by definition part of any stimulus package would include spending — that’s the point — then what I get a sense of is that there is some ideological blockage there that needs to be cleared up. [emphasis added]

….

UPDATE, February 10, 2009  Peter Baker in the New York Times writes (excerpt):

Taking on Critics, Obama Puts Aside Talk of Unity

“It is not too late to craft a bipartisan plan that creates more jobs and helps get our economy back on track, and Republicans stand ready to work with the president to do this,” Representative John A. Boehner of Ohio, the House Republican leader, said after the news conference.

For his part, though, Mr. Obama seemed to suggest it was too late, and that the time for bipartisanship lay further down the road. He said he recognized that some Republicans had good-faith doubts about his program, but he also characterized some of the opposition as an effort to “test” the new president.

(Baker’s article, which includes discussion of the press conference, is worth a read.  It’s clear that Obama’s pragmatism does not require him to stick to  “bipartisanship” and that the Republicans are about to find out that they have overplayed their hand.   Poor Boehner, the Republicans’ goose egg vote in the House, of which he was so proud, is coming back to haunt him.)

….

UPDATE, February 14, 2009, excerpt from UPI.com:

WASHINGTON, Feb. 14 (UPI) — U.S. President Barack Obama plans to travel and campaign more to pressure Republicans in Congress rather than trying to win their loyalty, sources say.

Now that a mammoth, $787 billion economic stimulus bill has been approved virtually without Republican support, White House advisers have determined that Capitol Hill horse-trading with GOP opponents wasn’t successful and that Obama should instead tap his immense popularity and public salesmanship skills to push legislation in the future, the Washington publication Politico reported Saturday.

Posters from the WPA, Library of Congress Collection

Sometimes you can almost smell a cheap shot.

The stimulus package that passed the House last week failed to receive one Republican vote.  Among the worthwhile provisions in the bill is fifty million dollars for the National Endowment for the Arts.  This is no mere give away.  The money would help to stimulate the economy, even though it is a rather paltry sum for the whole nation–the price of one CEO’s jet to be exact.   But the arts certainly make for an easy target, especially when you are willing to lie about  the contents of the bill.

While the debate over the stimulus package was raging, the Republican whip, Mr. Eric Cantor, claimed that $300,000 had been set aside in the bill for a sculpture garden in Miami.  Well, here are the facts.  No such provision exists in the bill.  It seems that Cantor felt that the package wasn’t specific enough for his taste, so he decided to claim on national TV that a project that had been funded in the past is in the current bill.   From Politifact.com (St. Petersburg Times):

In an interview with Fox News on Jan. 23, 2009, Virginia Rep. Eric Cantor, the House Republican whip, said that in a meeting with President Obama, Cantor asked if he “could use his influence on this process to try and get the pork barrel spending out of the bill. I mean, there’s $300,000 for a sculpture garden in Miami.” . . .

“We don’t know what they’re going to spend it on,” Bradley [a Cantor spokesperson] said. “There is no direction to the NEA on how to spend it.”

So to give people an idea of how the NEA spends its money, Cantor’s staff looked at some recent grants awarded by the NEA.

And in 2008, the NEA gave $300,000 to the Vizcaya Museum and Gardens in Miami to restore an outdoor statuary. The Vizcaya estate is one of the country’s most intact remaining examples from the American Renaissance, a period when the very wealthy built estates to look European. The $300,000 grant was to help restore some of the outdoor sculptures — statues, urns and fountains — that had been severely deteriorating due to South Florida’s salty, damp and subtropical climate, not to mention the hurricanes.

But again, this was an NEA grant from last year .

Vizcaya Museum and Gardens

Yes, there certainly have been more serious lies by politicians, but the point is that here you have the House whip willing to make stuff up (non-existent pork)  in order to help sink the stimulus package.  Pretty shameless stuff.   (As a matter of fact, Eric, it’s a shanda fur die goyim. You should know better.)

The fact is that 1) artists have lost jobs in the current recession and 2) the arts are economic engines in many communities.  There is good statement on the website of the National Endowment for the Arts detailing reasons for supporting the provision for the arts in the stimulus package.  For example, the statement cites a report by the National Governor’s Association:

A recent study released by the National Governors Association titled Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development states, “Arts and culture are important to state economies.  Arts and culture-related industries, also known as ‘creative industries,’ provide direct economic benefits to states and communities:  They create jobs, attract investments, generate tax revenues, and stimulate local economies through tourism and consumer purchases.”

P.S.   Eric Cantor appears to be a major piece of work.  Here he is trying to blame Congress during Jimmy Carter’s administration for the current housing crisis.

UPDATE  2-11-09.  More Cantor…This guy is just what the Republicans need to make sure that they remain the minority party for the next few generations.  Go, Eric (and his Office), Go.

The Plum Line, Greg Sargent’s blog
Cantor’s Office Responds: Video Depicting AFSCME Members As Goons

By now I am sure that most of America has heard about the former VP’s outrageous interview with Politico, which has been generously quoted in the MSM. Besides reiterating what every sentient adult American knows, namely, that it is possible that there will be a serious terrorist strike in the U.S. in the next few years, Dr. Doom tried to set the stage for the blaming the attack on the Obama administration. “When we get people who are more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry.” Politico

This nonsense is from a man whose war in Iraq and torture policies have in all likelihood created more terrorists than all of the combined recruiting techniques used by Al Qaeda.  He has made us less safe and decent in oh so many ways. But just as my fury was reaching unspeakable heights, I heard about a rather amazing turn of events. The Obama Administration plans to use Dr. Doom’s “expertise” in a thoroughly new fashion. They are creating a department of soothsayers made up of individuals who claim to have powers that allow them to leap over historical realities in single bounds. Cheney will direct this group of Jeremiahs. He plans to use his gifts in reading bird entrails, especially ones that he has shot, to help educate his comrades.

Obama it seems is way ahead of us on this one. It turns out that those of us who have been hypercritical of Dick have not realized that he has been suffering for years from a rather rare syndrome that leads him to believe that he has prophetic powers. His pacemaker, which was implanted several years back, suffers from a serious defect. It produces a low frequency audio pulse to the Thermonuclear region of the Hiffocampus. (It goes softly “boom” about every 18 minutes.) This results in behavior that is hard to separate from that of sociopaths, especially in terms of their tendency to lose sight of the differences between truth and lies, right and wrong. So, yes, Cheney has been a pathological liar, but for an understandable reason. Unfortunately the pacemaker cannot be removed without creating the possibility that the patient might suffer from an overload of guilt and remorse, which could lead to suicide. And his doctor’s oath, unlike Cheney’s own as VP, requires that he do no harm.

The Obama administration’s plan to make Cheney Director of the Cassandra Complex is an elegant solution to the problem of Cheney. As you may recall, even when Cassandra was telling the truth about the future, she was fated to not be heeded. Cheney can now spend the rest of his days, along with a bevy of sociopaths, feeling good about the fact that they know the future but no one will listen to them.

Here is a model of their new building, right off the Mall in D.C. The design goes back to Bentham. (And since, needless to say, no one can really know what the future holds in store, this is a good place to store folks like this.)

AP Photo/Ron Edmonds

Just in case you haven’t heard, Rush Limbaugh is now calling the shots in the Republican Party.   It seems that you can’t criticize Rush if you are a Republican, especially if you are in the House of Representatives.  Here is an excerpt from Congressman Phil Gingrey’s “apology” to Rush, on Rush’s radio show, for having dared to criticize him.  (Select the link to view a video of Rush speaking with Gingrey.)

Rush, thank you so much. I thank you for the opportunity, of course this is not exactly the way to I wanted to come on. … Mainly, I want to express to you and all your listeners my very sincere regret for those comments I made yesterday to Politico. … I clearly ended up putting my foot in my mouth on some of those comments. … I regret those stupid comments. Huffington Post, January 28, 2009.

And who does Rush want to see as the Republican standard bearer?  Sarah Palin, of course.  And he is not alone.

Coming off a shellacking at the polls in November, the plurality of GOP voters (43%) say their party has been too moderate over the past eight years, and 55% think it should become more like Alaska Governor Sarah Palin in the future, according to a new Rasmussen Reports national telephone survey. Just 24% think failed presidential candidate John McCain is the best future model for the party, and 10% are undecided. Rasumssen Reports, January, 29, 2009.

Now there are many sound arguments for not taking Palin seriously.   But let’s not bother with  arguments here.   Let’s just follow the video

Let me show you something…

A thanks to the (anonymous) person who did this video.

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UPDATE  3/2/2009   Rush has really got them on a leash.  A GOP senator can’t even say the words, Rush is wrong.