By Mike So some time ago I had this flash that maybe the 1990s drop in crime was not due to the improving economy (really, the economy during the Clinton boom stank by the standards of the 1970s), or because of legal abortion meaning fewer unwanted criminal babies (as Freakonomics would have it) but because of lead.
Specifically, lead in gasoline.
The more I thought about it, the better the idea seemed to fit the data:
Lead was first put into gasoline in the 1920s, thanks to one Charles Kettering, who also invented freon (a CFC, the ozone-destroying thing) (and who is probably the single person who had the most influence on the composition of our atmosphere since James Watt). But then came the Depression, when people weren’t driving so much, and then WWII, when driving was discouraged by various measures (I don’t think gas was rationed, but rubber was, which had the same effect). Then the war ends, the auto industry starts churning out cars in unheard-of numbers, and half the freaking country starts the move to car-intensive suburbs. Exactly twenty years later (1965), just as the first kids to breathe all that lead as infants hit their most crime-prone years, the crime rate suddenly shoots up, ghettos burst into riot, and high crime becomes a simple fact of life in America. And oh, yeah–the first riots were in Watts, Los Angeles, which totally baffled observers at the time–Watts was apparently far better off than the ghettos that flared up later. But if lead was the culprit, that would be exactly what you would expect: Watts was in LA, whose residents breathe far more car exhaust than pretty much anyone else in the country.
So why the gripey title? Well, right before I started to write this post I thought I’d do a search on the idea to make sure it was original. And no, it’s not.
Grumble grumble.
By Mike I’d never heard of him before, but damn I liked his excellent article at Salon, a fascinating look at a Southern labor movement in the 1930s.
If that doesn’t sound all that fascinating, Winant does a good job of tying the failure of one union movement to larger issues (briefly, working-class Southern whites never unionized in the numbers that their Northern counterparts did; this left them out of the New Deal and the American left in general; they wound up being a reservoir for conservativism, and they’re the ones who gave us Reagan, Bush, and Bush, who fucked things up for everyone else).
AND, he provides a bibliography in the article. Not just links to websites, but an honest-to-goodness bibliography. Seriously, my eyes are turning into little hearts as I write this.
By Mike For a long time it was a cliche, one that was reasonably close to the truth, that the reporting at the Wall Street Journal was excellent, while the editorial page was a disgrace–a constant stream of right-wing lies.
Now it’s pretty clear that the reporting is infected as well.
Exhibit A is today’s piece on the “ground zero” “mosque”, which, although largely factual (in the sense that it simply quotes people who make insane statements, or statements about what insane people will do) says that Obama’s remarks “nationalize” the debate. As if, somehow, this had been an internal New York debate before that.
Really, of course, all this fake outrage isn’t playing well in New York–national politicians have been behind this bullshit since it began.
Edit: Here’s a pretty good timeline of how things really went down.
By Mike I really have no idea whether this story–where a commodities trader accidentally winds up having 28,000 tons of real, actual, physical coal dumped off at his workplace–is real. But it’s a good yarn, and it shows how the world of commodities traders is so unrelated to the stuff being traded that the very idea of a commodities trader actually buying a real-life commodity is way-out wacky, “News of the Weird” type stuff.
In real life, the commodity markets are dominated, not by farmers locking in the price for their corn while it’s still in the field, but by professional traders who never see a bushel of corn or an ounce of tin. These traders just take empty bets on the price of commodities, not actually contributing in any useful way to the market’s ability to judge supply and demand.
This isn’t quite the definition of a bucket shop (which is illegal), but it’s still pretty clearly gambling rather than investment.
By Mike Here’s an article I missed about how Chase treats its customers. I’ve experienced the same disregard. They never got to the point of outright stealing from me (they just gave me a loan in the free-money days of 2006-2007 at reasonable interest “for the life of the loan” and then demanded it back), but then, I got my money out before they got the chance.
Seriously–Chase treats its depositors as just another revenue stream, and not a very valuable one unless they can be squeezed. If you have money there, get it out before they squeeze you.
By Mike Here in Vanity Fair. Hat tip to askheidi at Reddit.
By Mike I love any combination of economic commentary and cartoons (for obvious reasons); I was particularly tickled to see this a week or so ago–it’s Chris Ware’s rejected cover for Fortune’s May issue. Check it out–it’s worth savoring.
By Mike Krugman’s nearly always good, but this column is simply superb–a reader who started the column not knowing a blessed thing about ratings agencies would, by the end, understand what they do, what the problems with them are (93% of mortgage-backed securities given AAA ratings in 2006 are now junk, which I didn’t know), and what to do about them, both in general and a specific possible action. Seriously. Go read it.
By Mike In a PBS interview, presidential advisor (and Clinton treasury secretary) Larry Summers gave his take on financial reform. Most of the interview is unobjectionable, but this gave me (and others) pause:
Most observers who study — who study this believe that to try to break banks up into a lot of little pieces would hurt our ability to serve large companies and hurt the competitiveness of the United States.
But that’s not the important issue. They believe that it would actually make us less stable, because the individual banks would be less diversified and, therefore, at greater risk of failing, because they would haven’t profits in one area to turn to when a different area got in trouble.
And most observers believe that dealing with the simultaneous failure of many — many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment.
Others think that Summers is simply lying here, and he may be. But I think it’s worse–I think he really believes it.
After all, Summers is the guy who once said, “Spread the truth—the laws of economics are like the laws of engineering. One set of laws works everywhere.” Thing is, every real-world market is different–the only case where you get one set of laws is if you have perfectly functioning competitive markets. So Summers is, essentially, unable to distinguish between how things should work in a textbook-perfect free market and how things do work in the real world.
And yes, in a textbook market, he’s right–diversification helps individual companies stay stable.
But in the real world, especially the real financial world, it all too often does the opposite–one trader (like Nick Leeson of Barings) or a small group of traders (like the derivatives division of AIG) can bring down an otherwise stable company.
Really, smaller banks, which would have different strategies and take different risks, and which would therefore probably not all fail at the same time, are the honkingly obvious solution. Either Summers genuinely does not see that, or maybe he actually is lying. Either way, why are we listening to this guy?
By Mike I came across this article recently, in which David Murrin, a hedge fund manager, opines that Obama’s tepid health care reform means the death of the American Empire. See, it shows that Americans want handouts, won’t take responsibility for themselves, bla bla bla.
I don’t recommend actually reading the article–it’s entirely the sort of drivel that an intelligent high-schooler would be embarrassed to sign her name to. But it illustrates a larger point—Wall Streeters, even very successful ones, are not particularly knowledgeable or insightful about the world outside Wall Street.
As proof, consider the Wall Street Journal editorial page. It’s a cliché, but one that was reasonably true until recently, that the WSJ’s reporting was excellent while the editorial page was crap. Now the reporting is falling off too, but I’m concerned with the editorial page right now. It’s been crap for decades—a constant stream of dumb theories (supply-side economics might never have gone anywhere if the editorial page didn’t keep pushing it) and blatant lies (remember Vince Foster? The Clinton staffer who tragically killed himself? The WSJ ran more than 40 editorials claiming, with no evidence, that Bill and Hillary killed him).
EDIT: “More than 40” was actually sixty-four. Source: Al Franken, Lies and the Lying Liars that Tell Them, page 144. /EDIT
In other words, the WSJ editorial page treats its readers—Wall Streeters—like boobs.
This leaves two possibilities: One is that Wall Streeters realize that they’re being treated like idiots, but they’re so mellow and easygoing that they don’t mind. The other is that they’re too dumb to notice.
And they’re not known for being mellow and easygoing.
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