Finally Prepared to Kill Zombies?

Earlier this year, Nobel Prize-winning economist Paul Krugman took the position - as did former Chairman of the Federal Reserve Alan Greenspan - that large American banks, the ones to which the term "too big to fail" has been applied, ought to, in fact, be temporarily nationalized through receivership by the Federal Deposit Insurance Corporation (FDIC):

Lately the Federal Deposit Insurance Corporation has been seizing banks it deems insolvent at the rate of about two a week. When the FDIC seizes a bank, it takes over the bank's bad assets, pays off some of its debt, and resells the cleaned-up institution to private investors. And that's exactly what advocates of temporary nationalization want to see happen, not just to the small banks the FDIC has been seizing, but to major banks that are similarly insolvent.

The real question is why the Obama administration keeps coming up with proposals that sound like possible alternatives to nationalization, but turn out to involve huge handouts to bank stockholders.

What we got, of course, was exactly what Dr. Krugman warned us about: the Troubled Assets Relief Plan (TARP), a $700 billion plan that uses public money to purchase unmarketable assets from struggling financial institutions in the hope of strengthening their balance sheets. In other words, an attempt to treat symptoms instead of addressing the underlying illness:

... it’s basically saying that, you know, there’s nothing really fundamentally wrong with our banking system; there’s just this crisis of confidence, and so nobody wants to buy, you know, asset-backed securities, nobody wants to buy stuff that’s ultimately backed by home mortgages, and if only we could get people to see that these things are really pretty decent assets, then the banks will be in fine shape. And that’s the trouble. You know, there’s an argument that says maybe they were somewhat underpriced, but to make this the centerpiece of your financial rescue plan is just—well, as I wrote in the column, it leaves me with a feeling of despair.

TARP has allowed banks to essentially operate as if their financial underpinnings are actually healthy and to pay out enormous bonuses to their employees. While this has generated plenty of popular outrage that taxpayer dollars are effectively flowing straight into the wallets of the already-wealthy, such bonuses have continued unabated and without apparent shame. As Daniel Alpert, managing director of New York-based investment bank Westwood Capital LLC noted - without any evidence of irony - “The large banks are knocking the cover off the ball. [The industry is] making money, though with government help.”

The argument against FDIC receivership has always been a bit hard to see, although backers of government handouts to the financial sector have pointed to the facts that the agency has both plenty on its plate with the number of banks it has seized, and that it is running out of money. Of course, the simple solution to that would be to use the money allocated for TARP to fund the FDIC. The bill to taxpayers would almost certainly be smaller and management of the funds more transparent, but for some reason, this is rarely discussed as an option.

On Thursday however, Treasury Secretary Timothy Geithner stated that, not only should the Federal Reserve lose its ability to bail out firms in the manner in which it propped up insurance giant AIG, but that the FDIC is the proper mechanism for enforcing the notion that no financial institution should ever be considered too big to fail:

Any firm that puts itself in a position where it cannot survive without special assistance from the government must face the consequences of failure... We cannot put taxpayers in the position of paying for the losses of large private financial institutions... We must build a system in which individual firms, no matter how large or important, can fail without risking catastrophic damage to the economy.

Mr. Geithner's statement came in support of H.R. 384, legislation designed to bring increased accountability to TARP now and to any similar situations that may arise in the future. More accountability is always a good thing, especially in the realm of public funds, and TARP is unquestionably a reality that needs to be addressed. The Treasury Secretary's new-found appreciation for the function of the FDIC might turn out to be a case of closing the barn door after the horse has already bolted, but a drive to ensure that zombie banks are not allowed to live on remains the right course of action.

Demonstrating That There Is No Line Between News and Opinion at Fox

In my last post, I provided numerous examples of the Fox News Channel's outright advocacy for conservative positions. In a similar vein, Media Matters for America - which focuses on tracking conservative media figures and holding them accountable for their actions and words - has assembled a video (below) that very clearly illustrates the non-existent line between Fox's so-called "opinion" shows and its allegedly "straight reporting" programs. Senior Vice President for Fox News, Michael Clemente, might be "astounded" that the White House has trouble distinguishing between news and opinion programs, but as the following clip illustrates, that's pretty obviously the network's intent.

Not Necessarily the News

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Last week, White House Communications Director Anita Dunn stated plainly that the Obama Administration wasn't going to continue pretending the Fox News Channel was... well... a news organization:

Fox News often operates almost as either the research arm or the communications arm of the Republican Party... What I think is fair to say about Fox, and certainly the way we view it, is that it really is more a wing of the Republican Party.

Predictably, in the masturbatory world of the 24-hour news cycle - in which on-air personalities seem to love nothing more than to cover themselves - this has been a big deal. There has been breathless coverage of the response from Fox News that the White House is conflating reportage with opinion, and conventional wisdom among the media establishment has been that this is a bad move for the White House, and one that diminishes the presidency.

My own perspective however, has been that this is a long time coming; Fox News has not only blazed its own tawdry, partisan path to new lows, it has dragged down the quality of broadcast journalism overall. (Evidence of said decline is below.) To my mind, handled properly, there is little risk to the president, and this may well be something that reinvigorates our cowardly, incurious Fourth Estate.

All that said, I have friends and even relatives who watch Fox News, and so I think it is only fair that I back up those assertions. For starters, click on the image above, and zoom it to full size. (Thanks to whoever created this - I stumbled across it online, and it is, at present, uncredited to the best of my knowledge.) Now take a look at these screen captures and notice several things:

• There are about as many examples from "straight reporting" programs as there are from so-called opinion shows
• In all cases, the Fox News Channel logo is displayed to reinforce the idea that what is being watched is "news"
• There are consistent tactics: the use of the caption in the form of a question to express an opinion while maintaining deniability ("Dems helping the enemy?"); the rebranding of Republicans from John McCain to Lamar Alexander to Arlen Specter (pre-party-switch) to Mark Foley to Larry Craig as Democrats when they were either embarrassing to the GOP or failing to toe the party line; captions designed to favor a conservative position ("Usama bin Laden is talking to the far left, saying we're on the same side" ); and even outright lies ("Scooter Libby found not guilty of lying to investigators").

The response to this type of observation, however, is almost always to trot out MSNBC as the so-called "liberal equivalent" of Fox News. Liberal voices probably outweigh conservative ones on MSNBC (but even that is a tenuous toe-hold for claims of comparability, as there is simply no liberal equivalent to MSNBC's conservative Morning Joe on Fox News, for example), but even if the two networks' pundits provided precise counterweights to one another, there is simply nothing on MSNBC or any other major network that rivals the consistent and blatant conservative advocacy utterly permeating Fox's supposedly straight reportage. (If you haven't clicked on the image, now would be a good time to do so.)

In fact, the people running Fox News haven't really made this fact much of secret. Executives at the network have described the Fox News Channel as the "voice of the opposition" who see their confrontation with the Obama Administration as "the Alamo." To be certain, the press corps should absolutely be adversarial when it comes to politicians; but it needs to be consistently so, and in a way that is based on fact, rather than propaganda or the promotion of a particular agenda.

The Fox News Channel has literally promoted - not simply reported on, promoted - the so-called Tea Party movement, encouraged disruptions to town hall meetings held to discuss health care reform, and celebrated political victories for what it calls "Fox News Nation". Fox has even gone so far as to pass off a Republican press release as its own research - lazily failing to correct a typographical error from the original version. Ms. Dunn's assertion that the network is no more than an arm of the Republican Party has a deep basis in fact.

For some people, this will almost certainly still be insufficient reason to switch their source for news; they may simply prefer to get their information in a way that is most compatible with their world view. Leaving aside for a moment the question of whether the goal of journalism should be to inform or to comfort, here is the single most damning fact about the Fox News Channel: It does a terrible job of factual reporting, and it has done a terrible job consistently.

In 2003, for example, the Program on International Policy Attitudes (PIPA) conducted a study to examine misperceptions among the public in the run-up to the invasion of Iraq:

An in-depth analysis of a series of polls conducted June through September found 48% incorrectly believed that evidence of links between Iraq and al Qaeda have been found, 22% that weapons of mass destruction have been found in Iraq, and 25% that world public opinion favored the U.S. going to war with Iraq. Overall 60% had at least one of these three misperceptions.

The most misinformed of our misinformed populace? Those who got their news from Fox:


Likewise, a 2007 study by the Pew Research Center revealed that, when given a standardized set of 23 factual questions, Fox News Channel viewers were half as successful answering those questions as people whose primary news source was either The Daily Show or The Colbert Report, which are both comedy progams.

Even now, this trend continues. An NBC/Wall Street Journal poll from September reveals not only a startlingly high amount of ignorance and misinformation regarding health care reform efforts among the general population, but Fox News Channel viewers again bringing up the rear with regard to valid information:

72% of self-identified FOX News viewers believe the health-care plan will give coverage to illegal immigrants, 79% of them say it will lead to a government takeover, 69% think that it will use taxpayer dollars to pay for abortions, and 75% believe that it will allow the government to make decisions about when to stop providing care for the elderly.

None of these beliefs are true, so even if one attempts to defend the Fox News Channel's advocacy for Republican positions, it's hard to understand why anyone would go to bat for such a piss-poor source of information. Of course, if someone is getting all their facts from Fox News, given the network's track record, ignorance and misinformation - especially about ignorance and misinformation among its viewership - is probably understandable.

A Soon-To-Be Activist Judge Asks the Right Questions

Last weekend, President Obama reiterated his promise to end the deeply unfair and damaging policy of "Don't Ask, Don't Tell" (DADT), which prohibits homosexuals from serving openly in the United States military. While his omission of a time table and specific steps to achieve this goal might be understandable - he is, after all, about to make some hard decisions regarding American armed forces in Afghanistan - continued delay in repealing DADT is harder than ever to justify. Still, popular sentiment continues to evolve away from discrimination against gays, and it appears to be only a matter of time before Don't Ask, Don't Tell ceases to be the law of the land.

On a similar note, U.S. District Chief Judge Vaughn Walker has refused to dismiss a law suit challenging the legality of California's Proposition 8, which passed last November, and outlaws homosexual marriage in that state. Charles Cooper, the lawyer representing the group who sponsored Prop 8, had asked the judge to throw out the suit, but instead ran into a buzz saw of logic and penetrating questions too infrequently asked, and for which he was ill-equipped to answer:

The judge not only refused but signaled that when the case goes to trial in January, he expects Cooper and his legal team to present evidence showing that male-female marriages would be undermined if same-sex marriages were legal.

The question is relevant to the assertion that Proposition 8 is constitutionally valid because it furthers the states goal of fostering "naturally procreative relationships," Walker explained.

"What is the harm to the procreation purpose you outlined of allowing same-sex couples to get married?" Walker asked.

"My answer is, I don't know. I don't know," Cooper answered.

Moment later, after assuring the judge his response did not mean Proposition 8 was doomed to be struck down, Cooper tried to clarify his position. The relevant question was not whether there is proof that same-sex unions jeopardize marriages between men and women, but whether "the state is entitled, when dealing with radical proposals to make changes to bedrock institutions such as this ... to take a wait and see attitude," he said.

"There are things we can't know, that's my point," Cooper said. "The people of California are entitled to step back and let the experiment unfold in Massachusetts and other places, to see whether our concerns about the health of marital unions have either been confirmed or perhaps they have been completely assuaged."

Walker pressed on, asking again for specific "adverse consequences" that could follow expanding marriage to include same-sex couples. Cooper cited a study from the Netherlands, where gay marriage is legal, showing that straight couples were increasingly opting to become domestic partners instead of getting married.

"Has that been harmful to children in the Netherlands? What is the adverse effect?" Walker asked.

Cooper said he did not have the facts at hand.

"But it is not self-evident that there is no chance of any harm, and the people of California are entitled not to take the risk," he said.

"Since when do Constitutional rights rest on the proof of no harm?" Walker parried, adding the First Amendment right to free speech protects activities that many find offensive, "but we tolerate those in a free society."

Judge Walker has yet to endure what will almost certainly be an avalanche of criticism that he is an "activist judge," but given past experience, that is more than likely only a temporary situation. Hopefully, he will continue pursuing this line of questioning, rooted as it is in the Constitution, the fairness of basic human rights, and last - but not least - The Daily Show. (And yes, this particular video has become my touchstone, my go-to, my "Free Bird" encore on this issue. But it deserves to be, as it so neatly and totally destroys the arguments against same-sex marriage, and does so in under five minutes.)

10th Annual Elite Karate Training Camp

No posts for a few days - I'm in Kansas City for the Japan Karate-Do Ryobu-Kai 10th Annual Elite Karate Training Camp. I've been to every one of them, but it's still hard to believe the event has been going on for a decade!

This year's Elite Camp should have good attendance and more than a few guests from other styles. As usual, I'm looking forward to the opportunity to see my sensei - and my sensei's sensei! - and focus on my own training, without having to do a lot of instruction. I'll be leading a session this time around, but Elite is always a great opportunity to tune one's self up a bit, and just be a student!

The Cost of Health Care Reform "Centrism"

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As the Senate Finance Commitee bill continues - for some bizarre reason - to be at the center of the health care reform debate, additional information has emerged about the dramatic societal price to be paid for the half measures championed by Chairman Max Baucus.

The Robert Wood Johnson Foundation notes that researchers from the Urban Institute have used their Health Insurance Policy Simulation Model to estimate changes in coverage and cost trends that would take place between now and 2019 if the health system is not reformed. The report shows that under the worst-case scenario, within 10 years:

• The number of uninsured people would rise by more than 30 percent in 29 states. In every state, the number of people without insurance would jump at least 10 percent.
  
  
• Premiums for businesses would increase, and would more than double in 27 states. Even in the best case scenario, premiums for employers would rise by more than 60% in 46 states.
  
  
• In all 50 states, a smaller share of the population would receive health insurance through their job. In twenty-five states, the number of people with employer-provided coverage would fall by more than 10 percent.
  
  
• Spending for Medicaid/Children's Health Insurance Program (CHIP) would rise by more than 75 percent in all states.
  
  
• In 45 states, the dollar value of uncompensated health care in the system would more than double.

There will be certainly be switching costs in moving to a new system, but the lesson of recent history - President Clinton's efforts for reform being prime example - is that the bill will only get higher the longer we wait. Mr. Baucus's plan simply doesn't get the job done.