Wednesday, 28 April 2010

Looting for Pride and Profit

Goldman Sachs and their “Abacus 2007-AC1” product were the subject of a Senate hearing yesterday. Unlike embarrassed johns appearing in court over the years, the “Looters in Loafers” (Paul Krugman’s term) made no attempt to cover their faces, despite having done much more damage to the community. Comments about the advantages of dealing with Las Vegas casinos over buying securities from Goldman Sachs were raised, leading Maureen Dowd to snip “You know you’re ethically compromised when Senator John Ensign scolds you about ethics.”. The bankers from Goldman Sachs were on the wrong side here, and it appears a vain hope that they will own up to it.

The perps argue that they’re just brokers, making markets in products in which both bulls and bears will be on opposite sides of each trade. That works just fine when we’re talking about Treasury bills or General Electric bonds or Microsoft common stock. It doesn’t work when the “broker” is actually cooking up the product in the back room. Legitimate investments are analyzed and discussed by numerous pundits, these were blessed by the “independent” rating agencies. As the rating agencies are paid by the sponsors of the toxic derivatives, their vaunted independence is about as amusing and as credible as the dead baby jokes we traded in grade school. In this case, it turns out that one player was directing that the worst-possible loans that the rating agencies would swallow were assembled for sale.

I seriously doubt that Goldman was alone on this, and this wasn’t the only product they cooked up. (You don’t need a product code with a year and a three-character identifier if it’s a one-time deal.) There should be some serious slapping of wrists and some disgorgement of profits, plus damages, and the rules need to change so it can’t happen again without someone doing time. If I Were King, it simply wouldn’t be allowed for a securities firm to make up their own securities to screw investors with.

Sunday, 25 April 2010

Birther spotted in the wild

I’ve seen any number of references to “birthers” in the press over the last few years, that being a group of individuals who claim that Barack Obama is not a natural-born citizen of the US and thus not eligible to serve as president. I’m not saying that I didn’t believe that such people existed, but it does seem farfetched. I was having lunch in a Chinese restaurant at Port Angeles yesterday when a person walked in, sat down, and started chatting with a group at another table. I wasn’t paying a lot of attention, but I couldn’t help overhear his assertion “You know, he isn’t actually a citizen.” in reference to President Obama. I was stunned. His knuckles didn’t drag on the ground when he came in and he seemed to have sufficient intelligence to operate a fork, but somehow he had fallen for this absurdity. I wanted to ask him if he was a citizen, and since he clearly doesn’t accept state birth registrations as evidence, how he intended to prove it. But he was a big guy and it doesn’t take any intelligence at all for a big guy to stomp an old slow guy.

Monday, 19 April 2010

Where is the Inquisition when you need it?

There are advantages to being Lutheran. For one, there is no Inquisition. For another, there is no Pope. The Roman church has had the former since 1542, the latter since St Peter was given the keys to the kingdom by Jesus himself. To protect the church from heresy, Paul III created the “Supreme Sacred Congregation of the Roman and Universal Inquisition” in 1542, the name was changed to the “Supreme Sacred Congregation of the Holy Office” in 1908, and in 1965 it became the “Congregation for the Doctrine of the Faith”. This body reviews all published work within the church to determine if heresy is being uttered, allows publication only of such work it finds conforming to accepted doctrine, and punishes those who break their proscriptions. Apparently the zealousness of the original members of this body, and the severe penalties exacted, were sufficient to frighten theologians and priests to this day: Few have been burned at the stake in recent centuries.

But the Inquisition is very much alive and well today. Three times the church elected the head of the Congregation as pope, presumably putting the fear of fire, if not God, into the hearts of those who might be tempted by thoughts not allowed by the canon. The last time this happened was in 1605. So with the church reeling from revelations of pederast priests, and church membership waning in many countries, it sent a mixed signal when this happened a fourth time with the election of Joseph Cardinal Ratzinger as Benedict XVI in 2005. If the goal was to heal the rifts in the church, and to reach out to those who were drifting away from regular worship and tithing, then the chief inquisitor probably wasn’t the best symbolic choice. On the other hand, if the highest priority was to clean house and deal with pederasts in the schools and choir lofts, to make it known to the communities where the problems existed that such affairs would no longer be countenanced, the selection was ideal.

Sadly, it turns out there was a third option, that Joseph Ratzinger sees sexual predation by parish priests as a minor indiscretion, and that in his various roles the priority was not to parade the guilty before tribunals and deal with them but to sweep the whole thing as far under the nearest rug as possible. Any terror he might inspire was limited to Catholic writers, there is no sign that the main problem will be addressed. In fact, with recent reports that at least one priest in his own archdiocese was involved in such predations when he was still a German bishop, it seems that the church is publicly taking the stance that Ratzinger never even knew about such things in his own domain.

If I Were King I would draw the line at public execution by fire organized by the church, but as king or commoner I would welcome better judgment and greater action than we’re seeing from Rome.

Sunday, 18 April 2010

On the death penalty

During his recent campaign for the Texas governor’s mansion, Kinky Friedman was asked for his stance on the death penalty. His answer was pretty sensible for a politician in the American state most active in executions: “I am not anti-death penalty, but I’m damned sure anti-the-wrong-guy-getting-executed.” That makes sense, given the human longing for revenge and the simple fact that you can’t release a wrongly-convicted felon after lethal injection. But it doesn’t satisfy one crucial logical element.

Thomas Jefferson, among many other wise and sensible things, said “It is strangely absurd to suppose that a million of human beings, collected together, are not under the same moral laws which bind each of them separately.”. In the history of government I see three sources of power. First is simply the power of power, the logic of the absolute dictator. Second is the divine right of kings, in which earthly rulers were presumed to have been granted power over their subjects by a higher authority. And finally come the democratic forms, first appearing in pure form in the United States, in which the source of power and authority is the will of the governed.

In other words, the power of a republican government comes only from the citizens. As an American citizen has no authority to take life outside constrained circumstances, such as self defense, he can’t delegate that authority to the central government. He doesn’t have it to delegate. It necessarily follows that the government has no such authority.

The power of a community, including a republican state, to defend itself is, on the other hand, a power that can be delegated by the people. An individual may defend his bodily self, his family, and his home. It follows that the individuals comprising a community can delegate that power to the community. The rules of war have been evolving over human history and formally enumerated as Jus Ad Bellum and Jus In Bello starting with Augustine of Hippo in the fifth century.

But for a community to decide, even with all the trappings of Miranda warnings, formal charges, grand juries, skilled representation of the accused, and a verdict of peers, that a person should be killed by agents of the state? It’s simply not logically possible.