Black comedy with Alan Greenspan

A couple days ago, Financial Times gave some column-inches to Alan Greenspan to bash the Dodd-Frank financial regulation bill. Not, of course, for being insufficient in its strictures (see Matt Taibbi for that), but rather for being too heavy-handed and market-distorting. The money statement, and the one that has elicited unending amounts of scorn and hilarious snark, is this:

Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

To which Dean Baker says,

Just in case you have forgotten, we have 25 million people who are unemployed, under-employed or have given up looking for work altogether because Alan Greenspan did not understand financial markets and the economy. Perhaps the FT will have a column offering advice on disaster management from Michael Brown.

Crooked Timber dedicates a whole post, plus a gazillion comments, to mocking the “with notable exceptions” thing. I haven’t read them all because the sheer number of them is overwhelming, but there’s some pretty funny stuff in there. “With notably rare exceptions, Germany remained largely at peace with its neighbors during the 20th century.”

It’s also interesting to note that the vast majority of commenters on the original FT piece are largely derisive of Greenspan, and of FT for giving him undeserved airtime.

Finally and more substantively, the thrust of Greenspan’s argument appears to be that the financial sector is just too complicated to be regulated. This is, needless to say, a troubling line of argument, but not one that’s entirely uncommon. In fact, World Bank President Bob Zoellick essentially made a similar argument when he gave a talk here last year, saying that he had the World Bank put pressure on the Basel III financial regulatory talks so that the resulting regulations would not be an “overreaction” that resulted in unintended consequences. About Dodd-Frank, Greenspan says:

The financial system on which Dodd-Frank is being imposed is far more complex than the lawmakers, and even most regulators, apparently contemplate. We will almost certainly end up with a number of regulatory inconsistencies whose consequences cannot be readily anticipated.

I understand the idea of unintended consequences as an argument against sweeping reforms, but when the system to be reformed is so thoroughly broken, one would think that something more than cautious baby steps is called for.

Flying Whale

The Racism Matrix

This particular post was supposed to be Flying Whale’s task, but unfortunately I need it to exist now, so that someone else can use it now.

But before we get to the racism matrix, we need to talk briefly about structure and agency.  Structure and agency are just fancy sociologist words to describe the fact that people make choices in their lives (agency), but that those choices are constrained by the rules and systems that govern society (structure).

The most helpful metaphor for this that I know is that society is like a river, flowing downstream.  Individuals are like a swimmer in that river.  They can choose to swim with the current or against the current, but ultimately, their movement is within the context of the current’s flow.

Enter the racism matrix:

	Racist	Anti-racist
Active
Passive

Pretty straight-forward.  Two columns by two rows.  And so we begin trying to fill it in.

What’s active and racist?  Being a member of the KKK.  Calling someone a racist slur.  Refusing to hire someone because of their race.

What’s passive and racist?  Letting an employee at a car dealership serve you first, even though an African American was in line before you.     Being a member of an association that doesn’t allow membership for people of color.  Staying silent when a friend tells a racist joke.

Then what’s actively anti-racist?  Participating in the Civil Rights Movement.  Signing a petition that demands an investigation when a white police officer kills a person of color under suspicious circumstances.  Supporting affirmative action for people of color.

Which leaves the passively anti-racist cell.

The point of the Racism Matrix is that the passive anti-racism cell doesn’t exist, that it’s impossible to be passively anti-racist.  Which is to say, in a racist society, being passive and doing nothing will support the momentum of the status quo and will therefore have a racist effect.

Think back to the swimmer and the river.  You can swim with the current (active racism) or you can swim against the current (active anti-racism).  But if you just float on your back, you’re going to be pulled along with the current (passive racism).

There’s no way to float against the current.

At a conceptual level, this means that one of the ways in which structure intervenes into our lives is that it removes one of our cells of action (or inaction, as the case may be).  But as a teaching tool, the Racism Matrix says this: if you don’t like a system you see playing out in your society, you have to DO something to counter it.  Otherwise, you are supporting it.

Jonas

The WTO clubs baby seals?

That’s a headline you might expect to see at FreeTradeKillsAnimals.org in the very near future. The WTO has just established three panels addressing complaints from Canada and Norway regarding the European Union’s recent decision (plus older regulations in Belgium and the Netherlands) to ban imports of seal pelts due to “the concerns expressed by EU citizens about seal products from hunts which involve shooting seals and clubbing them to death.” In non-trade-wonk language, Canada and Norway are asking the WTO to strike down the EU ban on seal products.

Canada’s request for the establishment of a panel claims that the EU regulations violate its obligations under the GATT and TBT agreements, and describes the issue thusly:

The European Union trade ban prohibits the importation and the placing on the market for sale in the European Union customs territory of any seal product except: (a) those derived from hunts traditionally conducted by Inuit and other indigenous communities, which contribute to their subsistence; and (b) those that are by-products of a hunt regulated by national law and with the sole purpose of sustainable management of marine resources. In addition, seal products for personal use may be imported but may not be placed on the market. The effect of the trade ban, in combination with the implementing measure, is to restrict virtually all trade in seal products within the European Union, and in particular with respect to seal products of Canadian origin.

If the WTO rules against the EU, it will be yet another case of a democratically established regulation intended to protect the environment being overturned in favor of an ideal of free-flowing unregulated commerce. Canada’s case will likely be that its seal-product export industry is a crucial part of the livelihoods of some of its vulnerable populations, and that the hunting of seals is done in a sustainable manner. The Canadian chapter of the Humane Society International (an organization which, is should be noted, is hardly a reliable opponent of current “free-trade” policies) anticipates these arguments:

National polling consistently shows the overwhelming majority of Canadians want the commercial seal hunt to end, oppose the Canadian government using tax dollars to promote the sealing industry and support the rights of foreign nations to prohibit trade in seal products… Canada’s seal slaughter is conducted by commercial fishermen who earn, on average, less than 5 percent of their annual income from killing seals.

It is worth noting that the U.S. banned the importation of seal products from Canada in 1972’s Marine Mammal Protection Act – yes, the same MMPA that was weakened by the famous GATT tuna-dolphin case. Furthermore, in 2005, a bipartisan resolution was introduced in the Senate calling on Canada to end the commercial hunting of seals.

In sum, Canada’s reaction to international pressure from the EU and the United States regarding its seal-hunting industry is not to eliminate or downside said industry, but instead to defend it using a minimally accountable transnational commercial institution that has historically sided with commercial interests over environmental protection or other sound regulatory measures. This is a rather telling indicator of the power of global commerce over international norms about environmental and consumer protection.

That said, environmental and animal rights organizations tend to have massive clout with American and European publics when they can show that cute furry cuddly things are in danger. And few things are cuter, furrier or cuddlier than baby seals (evidence above courtesy of Google Images). So this is also a golden opportunity for such organizations to raise a stink about the structure of the global economy; whether they are able to take advantage, and how they frame the broader issues at hand, will be very interesting to see.

Flying Whale

Ag subsidies revisited

Over at The American Prospect, Monica Potts has written one of the clearest and most concise summaries of what a progressive view on U.S. agricultural subsidies should take into account. This is a topic I’ve written about before on this blog, in reference to an excellent University of Tennessee report from 2003. Potts gives a brief historical outline and discusses why the debate should be about reforming subsidies rather than eliminating them:

Sometime between Fast Food Nation and Food, Inc., progressives arrived at the simplistic conclusion that crop subsidies are bad for the environment and our health, and we need to end them. But crop subsidies were established for a real reason. The market for items like corn, wheat, soybeans, and cotton — all nonperishable foods — have serious problems that subsidies were designed to address. The reasons for subsidizing these crops are complicated, but they boil down to this: You can’t trust the forces of supply and demand to set stable, fair prices.

I have little to add, just wanted to highlight this as a very well-written summary of the issues at hand. Worth reading the whole thing – and if your interest is piqued, so is the Tennessee document.

And yes, I owe a lot of attention to a couple of recent commenters – you are not being overlooked.

Flying Whale

Neoliberalism’s newest foe: Orrin Hatch?

The Hill is reporting that Sen. Orrin Hatch (R-Utah) is threatening to package together the South Korea, Colombia and Panama FTAs into a single giant toxic loogie of awful. As the ranking member of the Senate Finance committee, which has jurisdiction over trade issues, Hatch is not in a powerless position, so this might actually matter.

While Hatch is doing this ostensibly to force the passage of all three FTAs, this action might also give opponents of the deals their best possible chance to stop their passage:

While the AFL-CIO and other big unions oppose all three deals, the South Korean deal has won support from the United Autoworkers. And while other unions oppose the Korea and Panama pacts, they would see movement on Colombia by the administration as almost an act of war. For years, unions have drawn a line in the sand over Colombia, which they say has not done enough to stop violence against union organizers.

The article concludes, “Trade was supposed to be a winning issue this year for Obama and the GOP. Wednesday’s move shows it will be a victory that is hard to achieve.” So, “Obama and the GOP” don’t win; who else loses? Let’s see… multinational corporations looking to hide behind generous Panamanian tax-haven laws; banks looking to hide behind Panamanian bank secrecy regulations; Colombian resource extraction companies looking for new markets for their products, created at the expense of millions of displaced indigenous and Afro-descendant peoples; any companies in the U.S., Korea, Colombia or Panama hoping to be able to sue against public health, environmental or labor protection laws that infringe on their expected profits…

Those are the regular folks “Obama and the GOP” are fighting for with these trade deals. Don’t you feel sorry for all of them already? Luckily, Orrin Hatch has our back.

It’s a strange world.

Flying Whale