Archive for February, 2010

24
Feb
10

CN Column 02/26/10: They’ve made it as clear as day: big banks can’t be expected to ethically regulate themselves

Over the last several months, the elected officials who allegedly represent the American people have become more and more divided by an ever-sharpening partisan rift. Traditionally, one would ascribe the schism to the liberal-conservative, Democrat-Republican, idealist-realist dichotomy we’ve all been made to believe in.

But everyday Americans—from bank tellers to machinists to teachers to insurance reps—represent the reckonings of a more elaborate political calculus divined from real experience. They reflect a spectrum of thought and emotion that exists not in one dimension, as two-party politicking suggests, nor even in two, but in three. Their ideals, philosophies and beliefs comprise a smattering as diverse as themselves.

Yet in the face of divisive issues such as health care reform, homeland security, purported “stimulus” spending and spiraling national debt, most Americans agree, at least in retrospect, on one thing: The bailout program for banks, insurers and automakers wasn’t such a good thing.

And most of us weren’t very pleased when “trickle-down” economics appeared to fail as banks posted record profits and paid out exorbitant bonuses while many of us still faced foreclosure, unemployment and/or crippling debt.

I think proper discourse on regulating the financial industry is long overdue, and the Obama administration seems to agree.

New regulatory law went into effect Monday to protect consumers from predatory lending practices and promote transparency and accountability between credit card companies and debtors.

The Credit CARD (Card Accountability, Responsibility and Disclosure) Act of 2009 regulates interest rates, fees, due dates and contract disclosure in various ways, apparently in an effort to combat what many legislators have seen as rapacious business tactics.

Elizabeth Warren, a bankruptcy expert and law professor at Harvard University, summed up these practices in an interview with PBS Frontline:

“What’s changed is [that] when credit was deregulated in the early 1980s … the big issuers, the credit card companies who have the team of lawyers, started writing contracts that effectively said, ‘Here are some of the terms, and the rest of the terms will be whatever we want them to be.’”

And a 9.9 percent introductory interest rate doesn’t stay at 9.9 percent, if the cardholder applies for another card, loses his job or defaults on another obligation. The interest rate then doubles, triples, even quadruples.

And the people who get into trouble are the ones who end up being creditors’ star customers.

“The problem here is that the profits are so extraordinary for lending at three times and four times the interest rate and the original cost of money,” Warren said, “and because those profits are so extraordinary, the companies are all moving into subprime. They’re out there competing for customers who are already in financial trouble; only the way they’re competing is competing to get them in, and then hit them with 29, 35, 40 percent interest rates; $29 fees, $49 fees, $79 fees. … Those people are like machines that just keep turning out money for the credit cards. Once they’re trapped, they can’t get out of it.”

Sound like the kind of industry that should be regulated?

Yet these practices are merely a middling shadow of the mortgage-backed securities trade, which brought the housing market to its proverbial knees when it reached its inevitable tipping point.

Traders’ insatiable appetites for these securities—essentially bundles of hundreds or even thousands of mortgages—eventually sapped the market of qualified home loan borrowers. So the banks started lending to “subprime” (read: unqualified) clients.

Glen Pizzolorusso, who was an area sales manager at an outfit called WMC Mortgage in New York, had this to say on Chicago Public Radio’s “This American Life” about his time trading toxic mortgage-backed securities: “At the height of it, I was making between 75 and 100 grand a month [between $900,000 and $1.2 million per year]. … We looked at loans. These people didn’t have a pot to piss in. They can barely make a car payment, and we’re giving them a 300, 400 thousand-dollar house.”

Housing prices skyrocketed along with demand as new borrowers bought up homes they couldn’t afford with loans they didn’t really qualify for. The banks loved it, because they knew when their clients defaulted on the loans and were foreclosed upon, their homes—whose values the banks were driving up—would become company assets.

And wouldn’t you know it? Their “subprime” borrowers couldn’t make their payments. Foreclosures flooded the market with empty houses, prices plummeted, and suddenly the banks found themselves in the precarious position they were in about two years ago. Oops! That’s the simple version of the story.

Yes, the federal government made the mistake of rewarding banks’ compulsive greed and excessively risky practices with taxpayer dollars. But it can make good by regulating banks so they can never put the government, their customers or themselves in such a perilous position again.

And if we all hated the banks for, at least by appearances, running away with our money, doesn’t it stand to reason that we should all want them to be made to follow a common-sense set of rules?

I understand the line of reasoning employed by those who want to deregulate big business and keep it that way. Their mindset is informed by traditional beliefs: that the market should prevail, that the federal government should stay out of free enterprise, and that consumers should be responsible for themselves. They believe in capitalism, freedom of choice and entrepreneurship—admirable values, all.

But in a world where terrific debt can be accrued on a sliver of plastic and Wall Street bean-counters can swindle undeserving borrowers and gamble their bad loans on the global market—and the American people are apparently expected to underwrite the risk—isn’t it just a little bit more complicated than that?

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17
Feb
10

CN Column 02/19/10: Higher education does not equate to elitism

Conservative Americans love to wage war. I don’t mean war in the traditional sense, though right-leaning policymakers tend to support military measures more voraciously than their leftist counterparts. I mean the more abstract wars against perceived evils, which serve to anchor questionable policy decisions and disingenuously promote skewed perceptions of those issues.

There’s the “War on Drugs,” which Rep. Ron Paul (R-Texas), one of the sharper conservative thinkers around, has called “an excuse to attack our liberties and privacy.”

There’s the “War on Terror,” which has defied definition and provided the framework for a perpetual conflict while encouraging the subversion of international standards.

It’s hard to deny that these policy campaigns have done some good. The question we should be asking is whether we would readily give up the rights which made American government exceptional in the first place in exchange for dubious protections.

In any case, I’d like to recognize the gradual emergence of a new policy war (albeit far less grave than the two mentioned above): America’s “War on Nerds.”

Apparently, it wasn’t enough that we, as a caste of high-school underlings, were considered the dregs of the social barrel in our youths.

First of all, anyone exhibiting any degree of intellect (as long as he or she is a Democrat, that is), is considered an “elitist.” The term is now being applied to any liberal who eschews the monosyllabic, grunting Dubya-grade diction in favor of (gasp!) a projection of intelligence and academic acumen (e.g., our current president and some in his cabinet).

Chris Kelly, a writer for HBO’s Real Time with Bill Maher, a liberal comedy-talk show, got it right when he blogged about Sarah Palin’s contradictory reactions to Rahm Emanuel’s regrettable decision to call a certain subset of voters “f—ing retards” and Rush Limbaugh’s subsequent dismissal of it.

He wrote, “The knock on Sarah Palin is that she’s applying two different standards, one for Rush Limbaugh, because he’s a friend, and another for Rahm Emanuel, because he can do the crossword puzzle.”

Precisely. The perception is that Emanuel, like Obama, is an “elitist.” Then again, would a member of the intellectual class call anyone “f—ing retards?” I doubt it.

I suppose this trend could speak more to a hypothetical “War on Intelligence,” but I’m sticking to the “War on Nerds,” and here’s why.

In late January, the seventh-circuit U.S. Court of Appeals upheld the legality of a Wisconsin prison’s ban of Dungeons and Dragons, a popular fantasy role-playing game.

Kevin Singer, a convicted murderer, was banned from playing the game in 2004 (his game materials, including a 96-page handwritten campaign manuscript, were confiscated) when Captain Bruce Muraski informed him that “inmates are not allowed to engage in or possess written material that details rules, codes, dogma of games/activities such as ‘Dungeons and Dragons’ because it promotes fantasy role playing, competitive hostility, violence, addictive escape behaviors, and possible gambling,” according to the court’s opinion. Playing D&D, the defendants argued, might stimulate “gang activity.”

I don’t know about you, but a gang of gamers rolling non-cubical dice, painting plastic miniatures and writing fantastic role-playing campaigns would sure keep me off the streets at night.

I won’t get too much into the court’s legal rationale. I don’t pretend to be a lawyer. From the gist of my research, I gather that there was legal precedent and the court acted on the recommendation of the prison administration, who claimed the ban was “reasonably related” to penological objectives.

What I take issue with is that claim, that playing D&D would compromise other inmates’ safety or rehabilitation in any way.

It’s like saying inmates can’t play chess because the immortal game encourages warlike, strategic thinking, which might lead to real-life repercussions; or that prisoners can’t read novels that might contain themes of aggression, escapism or the flouting of authority because they could then exhibit those characteristics.

In reality, prisoners who keep themselves occupied in a week-long D&D campaign are probably staying out of trouble while their peers might be stirring it up. And shouldn’t prison administrators encourage inmates to play games that reward critical thinking and strategy, just the way they (hopefully) encourage reading and writing?

Controversy about this particular role-playing game is nothing new. Its loose and anecdotal connections to that nefarious underworld collectively known as “the occult” have long driven religious fundamentalists into the same tizzy they muster at the mention of Magic: The Gathering, Harry Potter books, hip-hop music, the Grant Theft Auto game series or single-payer health care.

As an aside, let me just point out the most glaring problem with the assumption that violent media inspire violent behavior. It’s common scientific and statistical knowledge that correlation does not imply causality. That is to say, just because (a) someone plays Call of Duty 4, and (b) that person exhibits violent or antisocial tendencies doesn’t mean his interest in the game is necessarily the root of his behavioral issues.

If I had to hazard a guess, I’d say the prison administrators’ claim (and the court’s acceptance of it) had more to do with preconceived notions about the D&D and entertainment media’s largely-uncharted influence on behavior than with actual correctional goals.

I have only one appeal: leave the nerds to their crossword puzzles, role-playing, fantasy novels and video games. Those of us who don’t already have deep-seated emotional issues will behave.

10
Feb
10

CN Column 02/12/10: Appreciating art on its own merits

I don’t make it out to the movie theater much anymore. It’s not that I don’t have enough spare time; I do. It’s not that there aren’t movies I’d like to see; there are, though not quite so many as there used to be.

Really it’s a matter of funding. Tickets for me and my girlfriend, a bag of popcorn and a bucket-sized portion of soda to share run me in the range of 30 to 35 clams these days. Add in a box of candy, God forbid, and we’re looking at more like 40. That’s like … 10 cold cut sandwiches.

Yes, I weigh expenditures in terms of lunch meat. And yes, I make my sandwiches damn huge.

Be that as it may, I eat the cost of the movies every now and then. Most recently, we bit the bullet for “Avatar,” despite my laundry list of reservations based on the trailers and most of my friends’ (and some critics’) reactions. Eventually, the hype machine (and a certain Emerson film school grad’s hearty recommendation) weighed too much on me. I caved.

For a matinee showing, I shelled out $12 per ticket for the 3-D experience.

And maybe I had low expectations or maybe I was just in the right mood to mindlessly absorb a titillating sci-fi romp, but I left feeling wholly content. Intellectually stimulated? No way. Emotionally satisfied? Eh … not quite. Awe-inspired, jaw-dropped, agape over the presentation? Certainly.

There are a million things to criticize about the film and a million more good things to say about the visual effects and the innovating filmmaking. I won’t get into it too much. You can read the reviews just as well as I can, or you can see it for yourself. It won’t change your life. But it will probably be worth the money.

I was one of the last among my group of friends to see the film. They had already engaged in a heated debate (as heated as Facebook repartee can get, anyway) on its merits. The consensus, to which I generally agree, was that it had nothing going for it outside of its visual presentation. Cookie-cutter characters stumble through blocky dialogue in the midst of a contrived and redundant storyline. It’s “Pocahontas” meets “Fern Gully” meets pantheism and cartoonish PG-13 violence. But it’s all presented within the context of an arresting stream of sweeping, wide-angle action shots, lovely neon and earth-tone color palettes, and graceful, well-animated and believable alien characters. The 3-D helps, too.

For me, it became a matter of appreciating style over substance and visual breadth over emotional depth—and not feeling wont to apologize for it. I rediscovered a bygone willingness to hit the off-switch and be entertained.

It was almost a month ago now that I saw “Avatar.” It’s largely been jettisoned from my memory. Maybe I’ll catch it again on DVD; more likely I’ll wait for the sequels (rest assured, there will be sequels).

But I’ve been reminded these past few weeks of the critical dilemma I faced watching Avatar as I read Cormac McCarthy’s “Blood Meridian,” a stark, brutally violent novel about a band of scalp-hunters traversing the Texas-Mexico border in the 1850s.

It’s more of an essay on and exploration of the nature of violence and depravity than it is a conventional novel.

There’s hardly anything in the way of plot; the storyline, if you can call it that, centers on the various, gruesome misadventures of a 19-year-old who loses his way and falls in with a ruthless lot of indiscriminate killers. Characters move from slaughter to slaughter, stopping at whiskey bars and whorehouses along the way, and occasionally take a philosophical turn in their conversation or in the way they’re drawn against the bleak landscape. I’ll admit I’m not the most well-read person in the world but, frankly, it gets fairly boring.

Some of the characters are remotely interesting, but there’s not much to distinguish them, one from the other, nor is there any indication as to where they came from, what drives them, or why the reader should care about them.

Part of me wants to throw “Blood Meridian” aside and read “The Road” again. But I find myself returning to the novel night after night, if only for 25 pages at a clip, because McCarthy allures me with his unparalleled mastery of the English language, his inimitable, near-Biblical diction, and his apparent obsession with an archaic vernacular long-forsook from modern discourse.

I suppose as something of a logophile (and an aspiring writer) myself I’m biased toward books loaded with rare words and poetic phrasing.

It might be a bit of a crude analogy but, critically speaking, I find myself in the same frame of mind reading “Blood Meridian” as I did watching “Avatar.” I need to discard (or severely suspend) my concerns for certain aspects of the literature in favor of others, just as I had to do with the film.

To some people, “Avatar’s” weak plot and characterizations are too glaring for those viewers to appreciate the film on its surface. In the same respect, some would scoff at McCarthy’s lack of a central plot and poor character development, despite the overarching quality of his prose.

I suppose, as with anything, the consumption of popular media becomes a subjective matter of setting our priorities where they feel right for us. Rare is the true masterpiece of film, music or literature that can be deemed truly exceptional by every measure. We just need to figure out which qualities we can forgive a lack of, and which we can’t live without.

Anyway, I’m learning to appreciate art on its own merits. How about you?

03
Feb
10

CN Column 02/05/10: Chris Matthews: “I forgot” to check my racist baggage at the door

The annual State of the Union address inevitably sparks a barrage of debate on the Internet and among analysts. My favorite columns and blog posts are those that shift the focus from the substance of the speech itself to the reaction among various attendees, whether it’s Joe Biden grinning devilishly from ear to ear, a volatile Republican senator, an ecstatic Nancy Pelosi, a censured Supreme Court justice, or any variation thereof. It’s endlessly entertaining to see how much analysts can make out of the simplest gestures or the subtlest body language.

I mean to take it one step further this week and write about a pundit’s reaction on cable news. I’m going to try not to make this a habit, since I could easily gather suitable column fodder almost any night from cable news networks, and they already talk about each other far too much.

But Chris Matthews’ remarks after Obama’s first SOTU address Wednesday, and the reactions they in turn elicited (or, more accurately, failed to elicit) speak to a wider discrepancy between which racial gaffes are taken in stride and which are lambasted by fellow talking heads and race-relations leaders.

Matthews appeared on MSNBC (along with liberal pundits Keith Olbermann and Rachel Maddow) after the speech and made the following comments (my candid reactions included).

“It’s interesting. He is post-racial, by all appearances. I forgot he was black tonight for an hour.”

Umm, OK … no one made any allusions to his ethnicity. I mean, maybe you need to turn down the brightness on your telev—

“You know, he’s gone a long way to become a leader of this country, and past so much history, in just a year or two. I mean, it’s something we don’t even think about.”

Well, apparently you were thinking about—

“I was watching, I said, wait a minute, he’s an African-American guy in front of a bunch of other white people.”

Well … I’m not sure that’s what most of us were think—

“I think it was in the scope of his discussion. It was so broad-ranging, so in tune with so many problems, of aspects, and aspects [sic] of American life that you don’t think in terms of the old tribalism, the old ethnicity.”

Now hang on just a second. Tribalism? He’s a Harvard-educated lawyer, not a Zulu warrior. What the hell are you talking about? That’s just blatantly rac—

“It was astounding in that regard. A very subtle fact.”

It was astounding that you managed to discard your preconceived notions about black people for 90 minutes? And what subtle fact are we taking about? You’re really losing—

“It’s so hard to talk about. Maybe I shouldn’t talk about it, but I am. I thought it was profound that way.”

No, you shouldn’t talk about it, because your admission that you’re still thinking about it in those terms betrays the latent racism which pervades your commentary, and someone should once and for all put a muzzle on—wait, are you done? Are you going to interrupt me again? No? OK, good. Let’s move on.

Matthews appeared later that night on Maddow’s show and attempted to explain himself, but only repeated his inane rambling and asserted how amazing it was that Obama “has taken us beyond black and white in our politics.”

Funny, Chris, I remember the U.S. reaching that wonderful epiphany a year ago when Obama was elected, when Americans proved that the racial divide had, in some sense, been bridged. There was plenty of talk about it then. But here you are, a year later, still making callous, insipid observations about race relations and referencing “old tribalism” when the rest of Americans—at least those of us not sporting white robes on the weekends—have moved far, far past it.

The first thing wrong with this picture is that Matthews is one of only a handful of cable pundits that poison Americans’ minds with this drivel every night while raking in generous salaries. This honestly passes as “political commentary.” Strike one.

Once Matthews had finished his bumbling, nonsensical explanation of his obvious faux pas, Maddow complimented him on how he’s “always fun to talk to and a big thinker on these things.” Duh. Strike two.

The biggest problem here is that Matthews will get a quick pass when, in reality, had a conservative pundit, God forbid, said the same thing, he would have been crucified.

Let’s not forget Senate Majority Leader Harry Reid’s comments last month about Obama’s political success springing from his relatively light skin tone and lack of a “Negro dialect.” The backlash over that equally-insensitive comment was minimal. Reid was never reprimanded (though he did apologize), nor will Matthews be.

But to take rant radio favorite Rush Limbaugh as an example, he can’t get away with claiming that the media, in covering Donovan McNabb, was “very desirous that a black quarterback do well. They’re interested in black coaches and black quarterbacks doing well.” That’s so racist, Rush! Even though you’re criticizing biased media coverage of a black sports personality and not making generalizations about black Americans or pandering to stereotypes in any way, you can’t say that!

It’s worth noting that Limbaugh has made a number of very questionable, racially-charged statements. I’m just using this one to illuminate my point.

Limbaugh has also been critical of Affirmative Action and other “equal opportunity” programs not, I think, because of any racist tendencies, but because he recognizes that such policies only deepen racial division and engender bigotry. But don’t lash out, Rush. That’s racist.

On the other hand, left wing-nut racial hyper-awareness and sensitivity are nothing more than thinly-veiled expressions of innate fear of and disdain for the “others.”

Strike three, Matthews. You’re out.