Matt Yglesias asks: "What's the deal with banks that are too big to fail?"
if we can identify such banks, why not try to make a rule preventing banks from becoming that big? As a tradeoff, banks that rested in the small-enough-to-fail category could be allowed to operate with much, much laxer oversight and regulation since everyone would understand that if they fail they’re going to sink. Presumably, there are some efficiency gains associated with the economies of scale involved in big financial institutions. But there would also be efficiency gains associated with relaxing the regulations on financial institutions. And the only reasonable way to seriously relax those regulations would be to commit to a no-bailouts scenario. But to do that, we need to make sure the banks aren’t too big to fail. So why not focus the regulatory effort on that — on making sure that institutions don’t get so big that they need bailing out?
I could get on board with this as a general principle. The devil, of course, as always, is in the details.
I think that for anyone who seriously wants to maintain that he’s “one of those people who considers pizza to be a basic food group” the only serious answer to this question is to respect the multiple styles of people and a certain degree of incommensurability between them.
I think this has got to be the right answer. I recall seeing a cooking show on TV a year or so ago, in which firefighters in New York and Chicago were given head-to-head taste tests of one anothers' pizza. Not surprisingly, the New York firefighters preferred New York pizza while the Chicagoans preferred Chicago. Ulitmately, a control group of firefighters from L.A. (I think), were brought in, and they cast their lot with New York.
As for me, I liked Chicago pizza long before I moved to Chicago. Pizzaria Uno was available as a chain in Connecticut when I was in college, and I was able to order it when I lived in Boston as well. It was vastly preferable, to my pallate to the other options available.
Now that I actually live here though, I have to admit to having become a bit jaded. As a special treat, I'll still take a Chicago deep dish any day, but when we order as a family, we've got to go for the thin crust (which, if nothing else, is better for my arteries!).
That said, if I had to choose, in the city of Chicago, I say the best pizza is Pequod's on N. Clybourne. It's got a nice crispy crust.
Now that we've got a genuinely progressive political leadership for the first time in decades, conservatives are doing their best to promote the proposition that FDR's New Deal was a failure. Witness, for example, George Will's remarks on the subject (via Steve Benen):
"Before we go into a new New Deal, can we just acknowledge that the first New Deal didn't work?"
The New Deal brought real relief to most Americans. That said, F.D.R. did not, in fact, manage to engineer a full economic recovery during his first two terms. This failure is often cited as evidence against Keynesian economics, which says that increased public spending can get a stalled economy moving. But the definitive study of fiscal policy in the '30s, by the M.I.T. economist E. Cary Brown, reached a very different conclusion: fiscal stimulus was unsuccessful "not because it does not work, but because it was not tried."
This may seem hard to believe. The New Deal famously placed millions of Americans on the public payroll via the Works Progress Administration and the Civilian Conservation Corps. To this day we drive on W.P.A.-built roads and send our children to W.P.A.-built schools. Didn't all these public works amount to a major fiscal stimulus?
Well, it wasn't as major as you might think. The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover, whose full effects weren't felt until his successor took office. Also, expansionary policy at the federal level was undercut by spending cuts and tax increases at the state and local level.
And F.D.R. wasn't just reluctant to pursue an all-out fiscal expansion -- he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.
What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs.
As Benen notes: "The lesson to be learned, then, is to be bolder and deliver a more expansive recovery through a more aggressive stimulus."
Bonus YouTube Clip: Krugman personally stomping on Will on This Week:
In comments on Sunday that could have broad implications in a period of intense religious conflict, Pope Benedict XVI cast doubt on the possibility of interfaith dialogue but called for more discussion of the practical consequences of religious differences.
In quotations from the letter that appeared on Sunday in Corriere della Sera, Italy’s leading daily newspaper, the pope said the book “explained with great clarity” that “an interreligious dialogue in the strict sense of the word is not possible.” In theological terms, added the pope, “a true dialogue is not possible without putting one’s faith in parentheses.”
But Benedict added that “intercultural dialogue which deepens the cultural consequences of basic religious ideas” was important. He called for confronting “in a public forum the cultural consequences of basic religious decisions.”
The Vatican, however, denies that this means that the Pope is rejecting dialogue with other faiths:
The Vatican spokesman, the Rev. Federico Lombardi, said the pope’s comments seemed intended to draw interest to Mr. Pera’s book, not to cast doubt on the Vatican’s many continuing interreligious dialogues.
“He has a papacy known for religious dialogue; he went to a mosque, he’s been to synagogues,” Father Lombardi said. “This means that he thinks we can meet and talk to the others and have a positive relationship.”
The article goes on to suggest that the point, from the Pope's perspective, is to make such dialogue less theoretical:
To some scholars, the pope’s remarks seemed aimed at pushing more theoretical interreligious conversations into the practical realm.
“He’s trying to get the Catholic-Islamic dialogue out of the clouds of theory and down to brass tacks: how can we know the truth about how we ought to live together justly, despite basic creedal differences?” said George Weigel, a Catholic scholar and biographer of Pope John Paul II.
Well, it remains to be seen what all of this means. But assuming that the quotes are accurate, it leaves me in some perplexity. What does it mean to say that "interfaith dialogue" is "not possible" without putting one's faith in "parentheses"? I mean really, what does it mean? It sounds like nonsense on its face, and clearly needs elaboration before I can even tell if it makes sense on a basic level.
But if I am understanding the Pope's words correctly, he seems to be referring to that approach to religious dialogue in which participants talk from outside of their faith traditions, not dealing from or with the specifics of their differing traditions. This approach has certainly been commonly practiced over the years, but is by no means the only, nor is it clearly the best, possible approach.
Far better, I think, is an approach to interreligious dialogue that deals directly with religious difference as a starting point for conversation, rather than something to be avoided. In this way, dialogue then becomes an opportunity for mutual enlightenment, rather than an elaborate act of evasion.
However, the latter part of the article makes me think that the earlier quotes may not indeed have been well-represented If what the Pope is talking about is the establishment of a more direct approach to interreligious engagement, then that I'm all for, but it will require a more in depth examination of the Pope's intent to tell for sure what he meant.
Christianity Today has a roundup of Christian discussion on the issue in the wake of the release of a transcript of an interview between the President-Elect and Cathleen Falsani, which was also printed on Christianity Today's website. The key issue motivating the interrogation of Obama's religion has to do with his statements about such issues as the identity of Jesus Christ and the nature of salvation:
FALSANI: Who’s Jesus to you? (Obama laughs nervously)
OBAMA: Right. Jesus is an historical figure for me, and he’s also a bridge between God and man, in the Christian faith, and one that I think is powerful precisely because he serves as that means of us reaching something higher. And he’s also a wonderful teacher. I think it’s important for all of us, of whatever faith, to have teachers in the flesh and also teachers in history.
FALSANI: What is sin?
OBAMA: Being out of alignment with my values.
FALSANI: What happens if you have sin in your life?
OBAMA: I think it’s the same thing as the question about heaven. In the same way that if I’m true to myself and my faith that that is its own reward, when I’m not true to it, it’s its own punishment.
Obama: …There’s the belief, certainly in some quarters, that people haven’t embraced Jesus Christ as their personal savior that they’re going to hell.
FALSANI: You don’t believe that?
OBAMA: I find it hard to believe that my God would consign four-fifths of the world to hell. I can’t imagine that my God would allow some little Hindu kid in India who never interacts with the Christian faith to somehow burn for all eternity. That’s just not part of my religious makeup.
FALSANI: Do you believe in heaven?
OBAMA: Do I believe in the harps and clouds and wings?
FALSANI: A place spiritually you go to after you die?
OBAMA: What I believe in is that if I live my life as well as I can, that I will be rewarded. I don’t presume to have knowledge of what happens after I die. But I feel very strongly that whether the reward is in the here and now or in the hereafter, the aligning myself to my faith and my values is a good thing.
Now, there is Obama being as frank and thoughtful about religious issues as any President of the past 30 years. One might think that such willingness to speak thoughtfully about one's religion would be welcomed by Chrisitians, even if they would disagree on some of the relevant details of particular doctrines with Obama.
One would be wrong:
Joe Carter: "Obama is not a orthodox Christian. He may call himself a "Christian" in the same way that some Unitarians use the term to refer to themselves. But his beliefs do not seem to be in line with the historic definition."
Rod Dreher: "Unless Obama was being incredibly and uncharacteristically inarticulate, this is heterodox. You cannot be a Christian in any meaningful sense and deny the divinity of Jesus Christ. You just can't."
There are a number of more sympathetic responses, but many of them (and this is even truer in the comments section), begin from a premise of skepticism about Obama's professed faith.
Coupled with the "Is Obama the AntiChrist?" article that Newsweek, bafflingly, chose to run a week or so ago, it seems like questioning Obama's faith has become a cottege industry.
Why this should be is a matter of some perplexity to me. If Obama had rested on such empty Piety's as George Bush's "Jesus changed my heart," we wouldn't be having this conversation, despite the fact that nobody has ever really plumbed the question of what, theologically, it meant to Bush to have his heart changed by Jesus, and despite the fact that, given the evidence of his Presidency, it meant exactly zero ethically.
Obama's mistake, then, seemed to be to actually take the questions seriously and attempt to answer them. A shrewdly dishonest politician would have attempted to answer the questions with the "right" answers (that is to say, ones that comport with what evangelical Chritians believe the right answers to be), and to give a strictly Niceano-Chalcedonian answer to the question of Christ's identity. By grappling with a deep theological mystery honestly, and coming up with a not-clearly-orthodox answer, Obama has thus been shunted into the outer darkness.
Let's get real about this: Most Christians, liberal as well as evangelical, could probably not give a theologically coherent answer to these questions. The exception would be those who were catechised to within an inch of their lives, but even there, knowing the notes doesn't mean you understand the music.
Furthermore, as some have suggested, the identity of Christ is a mystery even to the church. The credal formulations are human attempts to make theological sense of this mystery, but aren't unquestionable descriptions of an obviously clear phenomenon.
Beyond that, most of the first Christians wouldn't have been "orthodox" according to the standards to which Obama is being held, since it took hundreds of years for the church to develop the Nicano-Constantinopolitan definition of Christ's identity. Being in conformity with it is not a measure of whether on is or is not Christian, though it does say something about one's theological education and sophisticiation.
It's foolish to hold non-theologians and non-religious professionals to this standard, and it's unnecessary. It is in confession of Christ, not a particular understanding of what that means theologically, that Christianity is contained. Theological arguments are perpetual and often arcane. It's not even clear that Constantine knew what he was endorsing at Nicea.
In the end, Slacktivist's answer to the question is the right one:
The asking, and particularly the answering, of that question is -- to borrow a phrase -- way above Pulliam's pay grade.
Stop and think about that sentence for about ten seconds. Does it sound right to you? Of course not! That's because it's completely false. At Matt Yglesias observes:
That’s a lot of scratch. Forty hours a week, fifty weeks a year, and you’ll be earning $140,000 a year. Which makes you wonder why there are all these people wasting time in law school.
It's the latest cannard made up by conservatives in this country in order to lay our current woes at the feet of workers and their unions. In other words, in a crisis caused by corporate mismanagement fully attributable to corporate executives making millions of dollars, the blame is being laid on ordinary people who are just trying to get by from month to month with their families and their credit ratings intact.
Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.
Hmm. Interesting. Why then, where does this $70/hour figure come from?
It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $24 per hour--and you get the $70 figure. Voila.
Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people.
You see how that works? You divvie up the total cost of covering all employees, both current and past, among the number of current employees, and that's how you arrive at that fiture.
In an era of scuzzy attacks, this ranks among the scuzzier, because its seeking to take advantage of the people who are most likely to be harmed by the auto industry tanking, and wrest concessions from them on the wholly fictional grounds that they are radically overadvantaged in terms of benefits compared to Detroits competitors!
And, let's be clear, that's not true either:
More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.
So the "wage gap," per se, has been a lot smaller than you've heard. And this is no accident. If the transplants paid their employees far less than what the Big Three pay their unionized workers, the United Auto Workers would have a much better shot of organizing the transplants' factories. Those factories remain non-unionized and management very much wants to keep it that way.
This is, I repeat, not the fault of the workers, but of the management, for making business decisions on the basis of faulty assumptions. Yglesias again:
The big three used to have a much larger share of the US market and manufacturing techniques used to be less efficient, so their past workforce was much larger than their current workforce. Consequently, the per worker figure is astronomical.
Now that was a real problem for the Big Three. It was, frankly, an idiotic thing to agree to. In exchange for getting to pay their workers less in the short-run, they agreed to a benefits structure that was guaranteed to destroy the firms in the long-run unless they could perennially maintain a huge market share. But it’s also a problem that’s largely in the past thanks to an agreement reached last year to offload and ultimately shrink the size of these costs.
The take-away from this is two-fold: First, the crisis in the automotive industry will, if we allow it, be used as an excuse to bust the UAW. Second, given the enormous overhead the auto industry is currently carrying, one of the biggest favors we can do for them as a country, in addition to any bailout that ultimatley gets agreed to, is to pass universal health care and take those health costs off of the Big Threes' books.