I’m reading the long New York Times piece on Citbank’s demise. Deep into it there’s this paragraph:
<<To make matters worse, Citigroup’s risk models never accounted for the possibility of a national housing downturn, this person said, and the prospect that millions of homeowners could default on their mortgages. Such a downturn did come, of course, with disastrous consequences for Citigroup and its rivals on Wall Street.>>
And then this one:
<<In fact, when examiners from the Securities and Exchange Commission began scrutinizing Citigroup’s subprime mortgage holdings after Bear Stearns’s problems surfaced, the bank told them that the probability of those mortgages defaulting was so tiny that they excluded them from their risk analysis, according to a person briefed on the discussion who would speak only without being named.>>
Maybe someone can explain this to me. I don’t know personally anyone who makes a financial decision without considering the possibility that the markets could shift direction. But if you’re entrusted with managing tens of billions of other people’s money, and are paid, I don’t know, five or ten or, in the case of Thomas Maheras, $30 million a year to do so, you don’t consider that possibility? It genuinely baffles me.
Knowing much better the milieu they come from, I think I understand how Doug Feith and Paul Wolfowitz could make the mistakes they made. But this makes little sense.
I do wish there would be some “accountability” though, some serious jail sentences. Since I read that Citigroup board member Robert Rubin –a key formulator of the bank’s “strategy” –is considered one of Barack Obama’s top economic advisors, I’m not too optimistic.
Happened to surf by Oliver Stone’s “JFK” last night and stuck with it. I had seen the movie when it came out, even wrote a NY Post column about it — have no idea what I said. But in 1991 I was a good deal less inclined to credit the possibility of malign US government conspiracies. Now, after the (second) Iraq War, we’re probably all a little more cynical.
I know there’s a ton of books out there on both sides, (I remember my stepfather was very excited by getting to know Mark Lane in the early sixties). I know there was a fairly authoritative “Case Closed” book published in 1993. What do others think of this? As portrayed in Stone’s movie, the second “magic bullet” theory does seem pretty unlikely.
Reading Edmund Wilson’s diaries, “The Thirties”. EW’s notes from his visit to Ford in 1931, for an article that appeared in The New Republic. He’s talking to a Ford exec, who “ran down the Chevrolet people, Chevrolet being then Ford’s rival. Did we know what went on in the Chevrolet offices? They screwed the stenographers on the desks, whereas in the Ford offices everything was open and above board because they have glass partitions between the rooms and you can see what people do.”
Not sure it made it into the TNR piece.
One might recall the remora from high school biology, a highly specialized fish that has a sucker on the top of its head that enables it to attach itself to sharks and feed on the leftovers after the host has dined. I don’t know if anyone has ever compared the neoconservatives to remoras, but their parasitic behavior has frequently been commented on. Unlike the relatively benign remora, however, they work assiduously to take over the host organism. Having destroyed the Republican Party, they are now engaged in becoming good Democrats, so it seems.
The neocon surge towards Hillary as Secretary of State, a position which she reportedly has accepted, has already begun. The current Weekly Standard features two puff pieces on her lauding her “conservative” credentials. One, describing her as a real hawk, is by Michael Goldfarb. Goldfarb is the former McCain campaign staffer who notoriously claimed on national television that there are a number of anti-Semitic associates of Barack Obama, though he declined to name them. Apparently Hillary, though a Democrat, passes the sniff test.
David Brooks, eager to help the cause in his own “I have a conscience and I’m being reasonable” fashion also jumped on the Hillary bandwagon, writing in today’s NYT “She has demonstrated in the Senate, her foreign-policy views are hardheaded and pragmatic… [and] there are many people on this team with practical creativity. Any think tanker can come up with broad doctrines, but it is rare to find people who can give the president a list of concrete steps he can do day by day to advance American interests. Dennis Ross, who advised Obama during the campaign, is the best I’ve ever seen at this, but Rahm Emanuel also has this capacity…”
Brooks understandably regards Hillary’s support of Kyl-Lieberman as well as every other piece of anti-Iran legislation as “pragmatic.” He also shared her enthusiastic support of war against Iraq. Nor is he disturbed that Ross was so pro-Israel in his lean during Israeli-Palestinian negotiations at Camp David that he was even criticized by a colleague Aaron Miller. Rahm’s tilt on the Middle East is also well documented, close to AIPAC, and presumably a comfortable fit for Brooks. All of Brooks’ endorsements are of hawks, all of whom are advocates of using a heavy hand when dealing with the Iranians and others. All are being provided cover by the neocon pundits at the Weekly Standard and New York Times.
Bill Kristol, who has praised Hillary in the past, took a slightly different tack in Monday’s NYT op-ed in an attempt to shift the debate away from any criticism of foreign policy. He proposed a Republican resurgence based on “developing an economic agenda moving forward,” though he did admit that he does not know how that will happen or what should be done. Conveniently, “Republicans and conservatives today face a similar challenge to that of 1976. A hawkish foreign policy, social conservatism and middle-American populism aren’t the problems.” Admittedly the economy trumps all currently, but Kristol is trying to shift the playing field to avoid looking at the policies that were crafted by him and his neocon friends.
Over at NPR.org, I have a “Dear Mr. President” piece up telling Obama that I didn’t vote for him (I ended up writing in Wendell Berry), but he could make conservatives like me very happy indeed if he would make some substantive steps toward reforming federal food policy. He should have Berry, Michael Pollan and Joel Salatin over to dinner sometime, I write, and talk food and farming. I’m skeptical as to whether or not the ethanol-loving Obama can get out from under Big Corn, but still, a guy can hope, can’t he?
Funny, but I just got back from lunch here in Dallas with a visionary young architect I met recently, who’s been involved in setting up a community garden and localist food network in town — this, partly as a community-building initiative for the inner city. We didn’t talk politics, but my guess is he’s a conservative. But he might be a liberal — it doesn’t much matter. The point is, localism built around food issues is a point of real convergence for traditionalist conservatives and like-minded liberals. It’s exciting to me to see these food networks taking shape here in my own community, organized strictly by word of mouth. Organically, you might say. Interestingly, everybody involved is 45 and under — and the main point of commonality seems to be having read and taken to heart Michael Pollan (who, by the way, did a long interview with TAC in our excellent food issue).
I haven’t read yet the Global Trends 2025: A Transformed World that was issued by the National Intelligence Council. But if this is an exercise in futurology, it had to be prepared in 2003, before the U.S. had experienced several geopolitical (Iraq; Afghanistan; Iran; North Korea) and geoeconomic (the current financial crisis) setbacks, because many of the “predictions” are already here with us, like, you know, now. For example:
Although the United States is likely to remain [remains?] the single most powerful actor, the United States’ relative strength — even in the military realm — will decline [has declined?] and U.S. leverage will become [has become?] more constrained.
[The] international system — as constructed following the second World War — will be almost unrecognizable by 2025 [2008?] owing to the rise of emerginpowers, a globalizing economy, an historic transfer of relative wealth and economic power from West to East, and the growing influence of nonstate actors.
In any case, could someone explain to me who are the mystery men and women who will continue expecting and seeing the U.S. playing a global leadership role in the world in 2025.
Despite the recent rise in anti-Americanism, the U.S. probably will continue to be seen as a much-needed regional balancer in the Middle East and Asia.The American military will continue to be expected to play a leading role in the war against global terrorism, though the United States as a whole will be less able to call the shots without the support of strong partnerships.
Sounds to me like they’ll still be with us in 2025. Some things don’t change.
Who killed the U.S. auto industry?
To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUV’s no one wanted, while the clever, far-sighted Japanese, Germans, and Koreans prepared and built for the future.
I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists, and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II. Read More…
Devils Night was the way Halloween was described in Detroit back in the 1980s when arsonists torced abandoned properties. Twenty years later the bonfire of the inanities returns to Motor City as Republicans begin the process of taking the “Mo” out of “Motown”.
So people are holding it against the execs of the Big Three because they all flew their Lear jets to D.C. O.K. but then please explain to me why AIG execs can spend your taxpayer dollars and mine on weekend retreats at posh resorts and hunting lodges and give their equally incompetent management bonuses and still get an extra $65 billion from the Fed to blow right through while the rest of us are bashing the auto industry asking for $25 billion loan combined just to stay afloat?
Apparently we have reached the point in this country where making things no longer are is important as pushing money around at the click of a switch. All of us have warned that if the Big Three go under, we’re in danger of losing 3 million jobs and a good chunk of our manufacturing base and we’ll still pay with our tax money for all the autoworkers pensions the feds will now be responsible for. But apparently that’s less of a concerns, at least to Henry Paulson, George Bush II and Republicans in the Senate, than watching AIG crash and burn. Why?