Eight Days a Week

Eight days a week is not enough ...

-- the Beatles

Don't misunderstand me, I'm not getting soft.
All I want is a couple days off.

-- Huey Lewis and the News

In This Week's Sift:

• One Obama-Week. Compared to that vacation-happy white guy, this Obama fellow seems to work pretty hard.
• Why the Banks Are Bankrupt. Wired claims that the Wall-Street disaster comes from mis-applying a mathematical formula. It's the best theory I've heard so far.
• Kindle and the Conquest of Space. Will a new book-reader change my life? Or at least let me stay in my apartment? And what about online comic books?
  
• Short Notes. Maybe Santelli's rant wasn't so spontaneous. None-the-Wiser Pence calls for a spending freeze. Colbert King wonders about the other missing people. Lakoff interprets Obama. Maybe Canada knows what it's doing. And why should Obama get a poster and not you? Or me?
  

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One Obama-Week

I'm not sure what to do with a president who doesn't spend half his time cutting brush at his fake ranch. This week:

1. President Obama gave addressed a joint session of Congress on Tuesday. [text, video] Great speech, but Bill Kristol was disappointed, because (by focusing on the economy, energy, healthcare, and education) Obama left out the issues Americans really care about: "This was not the speech of a man who even contemplates the possibility
of using force within the next year to prevent Iran from acquiring
nuclear weapons." [Bill: How about you enlist in one of the wars we're already fighting before you start another one?]

I like this piece of Obama's speech: "Dropping out of high school is no longer an option. It’s not just quitting on yourself, it’s quitting on your country – and this country needs and values the talents of every American." Under Bush, patriotism meant war. But Obama is making patriotism three-dimensional. There are many, many ways that we either build our country up or tear it down.

2. On Thursday, he introduced a budget with new priorities. It does away with the accounting tricks that made the Bush deficit look smaller than it actually was, starts the healthcare-reform process, institutes a cap-and-trade system for carbon emissions, and does exactly what candidate Obama promised about taxes: ends the Bush tax cuts for those making $250,000 or more and cuts taxes for everyone else. Obama's weekly address on Saturday was calmly confrontational towards the oil, insurance, and banking interests who will want to torpedo parts of this budget. OpenLeft likes what it hears.

3. Friday, he produced an Iraq plan. We finally have a plan and a date: "by August 31, 2010, our combat mission in Iraq will end." But we'll still have a "transitional force" in Iraq that could be 50,000 troops. Complete withdrawal takes longer and is less definite: "I intend to remove all U.S. troops from Iraq by the end of 2011." Is this the real deal or yet another way to continue the war? Juan Cole is optimistic.

4. Along the way, he made some major rule-of-law decisions. I anticipated some of this last week, and this week continued to be a mixed bag. We're going indict Ali Saleh Kahlah al-Marri, who has been held without charges as an "enemy combatant" for more than seven years. That's good, because al-Marri was in the US legally and has never had a day in court. He'll get one now. But it's also bad, because now we're probably not going to get a decisive the-president-can't-do-that ruling from the Supreme Court. So Obama or some future president might re-assert the power to jail people without due process.

And the Obama administration is continuing the Bush effort to keep the warrantless wiretapping program out of court. The program is blatantly illegal, but its very secrecy keeps people from suing, because you can't prove you're a victim. Accidentally, however, the Bush administration released some classified documents showing that a particular Islamic charity was spied on, so there is a test case. Like Bush, Obama is trying to obstruct the suit. The administration lost a ruling this week, but has filed more motions to block the case. Glenn Greenwald has the details.

I'm sure I missed something. Has Obama announced yet where he's going to vacation when he finally gets around to taking one?

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Louisiana Governor Bobby Jindal's Republican response [text, video] to Obama's speech was so bad it became a sensation. Conservative columnist David Brooks called it "possibly the worst response to a Democratic speaker in the history of democracy." Multi Medium said Jindal sounded "like Mr. Rogers pitching an infomercial." So many people compared his delivery to Kenneth the Page from 30 Rock that NBC's Jimmy Fallon decided to give Kenneth a chance to respond to Jindal's response.

Content? Well, Jindal told a Hurricane Katrina anecdote (which appears not to be true) to make the point that we can't depend on government. That's conservatism in a nutshell: Govern incompetently and then offer your failures as evidence that government doesn't work.

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Another Republican hopeful, Mike Huckabee, says of the Obama economic program: "a Union of American Socialist Republics is being born. ... Lenin and Stalin would love this stuff." Steve Benen recalls the grief Senator Durbin took when he compared Guantanamo to a gulag, but doubts Huckabee will pay any similar price: "In Republican circles, there's no such thing as excessive rhetoric."

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The Obama administration is circulating a proposal to reverse Bush's last-minute regulation that protected healthcare workers who refused to provide care for reasons of conscience. I've explained before why these "conscience" rules are a bad idea.

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Why the Banks are Bankrupt

The cover article of the latest Wired, Recipe for Disaster: the Formula That Killed Wall Street, answers one of the most mystifying questions of the economic crisis: How could so many smart people be this stupid?

Here's the story: A guy developed a new formula for computing the correlation between any number of risky events. That's important on Wall Street, because if your risks are uncorrelated, that means your portfolio is diversified -- any piece of it might crash, but the portfolio as a whole won't. The formula was based on certain assumptions, but in the end it was just a formula, so people who didn't understand it could put it in a spreadsheet and use it to produce numbers. Then the obvious thing happened. Spreadsheets don't keep track of assumptions, so the numbers got used in situations where the assumptions didn't hold. Those numbers convinced Wall Street traders that pools of mortgages (or other investment pools) were safer than they really were, because all the mortgages wouldn't go bust at the same time.

If you're geeky, the reason it told them that is kind of interesting. First, the formula treated correlation as a constant, and second, it provided a way to read that constant off of a market price, rather than from an intrinsic analysis of the risks. For example, consider two mortgages, one in San Francisco and another in Miami. What's the risk that they both default at the same time? It turns out that a certain credit default swap market had implicitly been estimating that risk for about twenty years. So without knowing anything about real estate or about San Francisco or Miami, you could pull that number out of market data.

Here's what went wrong: The correlation between the two risks isn't a constant; it depends on events. And just because there hadn't been any nationwide real estate crashes during the last twenty years, that didn't mean such a thing couldn't happen. So when a nationwide real estate crash started, suddenly the risks were highly correlated, even though the misapplied formula had said they couldn't be.

So, in short, it's another example of that old computer programming adage: Constants aren't. Variables don't. [Translation from the Geekish: Just because you represent some quantity with a constant or a variable, that doesn't mean that it actually stays constant or actually varies. You've got to match your data types to the world, not vice versa.]

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Another so-this-is-what-happened article is the NYT's explanation of how AIG lost so much money and why we can't afford to let them go bankrupt. Short version: Because the credit default swap market was completely unregulated, AIG didn't have to set aside any loss reserves when it insured other people's debts. So it didn't. So its limited capital didn't put any limit on how much debt-insurance it could sell. When the bankrupcies and defaults started, AIG was on the hook for vast amounts of money -- but no money had been set aside. And if AIG defaults, nobody knows when the dominoes will stop falling.

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The New York Times takes a look at the claim that TARP-receiving banks will suffer a "brain drain" if they can't pay multi-million dollar bonuses. Conclusion: "So if a few masters of the universe threaten to leave, where are they going to go? ... [G]iven the tumult in the industry, it’s a buyer’s market right now."

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Ben Bernanke's childhood home was auctioned off in a foreclosure sale last month.

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Kindle and the Conquest of Space

I'm a big fan of the downtown-apartment-in-a-small-city lifestyle. Our heating bills are low and we can walk to many of the restaurants, bars, and shops that other people have to drive to. But a middle-aged couple in an apartment constantly struggles for space. Unused stuff has to go. For us, the church rummage sale is the culmination of a rigorous annual culling process.

My biggest space problem is that -- thirty years later -- I still collect the stuff I collected as a student: music, books, and comic books. Thirty years worth. So while my comic books used to fit comfortably in a stack on a shelf in the dorm, now they take up more than half a dozen of those long comic-book-store boxes. And books -- the last time we moved we finally gave up on the idea of displaying our books attractively on shelves. They live in boxes that are indexed in a database. Almost fifty of them, at last count. Even a three-bedroom apartment is hard-pressed to contain them.

MP3 and iTunes solved the music problem. This month I've embarked on a couple of experiments to see if there's a similar solution for books and comics: I subscribed to Marvel's online repository of digital comics and I bought a Kindle from Amazon. Both still feel like new toys, so it's too soon to say if they'll totally solve the problem. But so far, so good.

Marvel. The economics of digital comics are great: A typical paper-and-ink comic costs $3, while an annual subscription to Marvel's web site costs $60, so if it stops me from buying two comics a month, it's a win.

Marvel solves the file-sharing problem like this: Instead of letting you share a copy with infinitely many friends, your browser downloads the comic you're reading (so it doesn't blink out if you suddenly lose your internet connection), but throws it away when you're done. Doubtlessly some hacker has a way to retain the files, but I don't want to go there. If (like me) you only read comics in places with an internet connection (like home), it works fine.

Before signing up, I worried about the reading experience, but I'm happy with it. (You can check out some free online comics here.) Those rare two-page spreads are a little hard to grok, but on the whole I think comic art looks better on a computer screen than on paper. Superheroes want to be bright.

My main complaint is the incompleteness of the collection and the lag behind what's in the stores (about six months, similar to the trade paperback versions of comics). In the first few days after subscribing I zoomed through all 30 issues of 4, a limited Fantastic Four series from a few years back. But there are still frustrating gaps in the collection, which Marvel seems to be trying to fill in.

Now if only DC will imitate them.

Kindle. My Kindle 2 book reader arrived Friday.

The first objection everybody makes to the idea of an electronic book-reader is that they can't imagine staring at a screen long enough to read a whole book. I just finished reading my first book (Jane Mayer's The Dark Side -- more about that next week) on the Kindle and I can report that it's not a problem. The Kindle's screen is like a high-tech Etch-a-Sketch. The little dark particles re-arrange themselves electronically, but nothing on the screen glows. You read it with ambient light, just like a book. Plus, the Kindle is easier to one-hand than a book, because it's light and isn't constantly trying to shut itself. I think it's a pleasant experience.

The convenience is amazing. It's bigger than a phone, but fits in a large jacket pocket. So Saturday I was able to take the Kindle out for a night on the town without anybody noticing. During intermission, I could read Mayer's account of extraordinary rendition instead of the ads in the theater program.

You buy books from Amazon, which the Kindle connects to wirelessly, wherever cell phones work. I thought it would be a financial hazzard to live in a virtual bookstore, able to buy books anywhere at any time. But in fact I think it will work the other way. If books are available 24/7 and you can start reading one a minute after you order, there's no reason to buy a book until the instant you're ready to start reading it. So much for my stack of I'll-get-to-that-someday books.

Looking at the last fifty books I've read -- yes, I have a list, that's the kind of guy I am -- about half of them were available for Kindle. Prices are similar to paperbacks, even if the book is new. (Mayer's book cost me $9.99.) Out-of-copyright classics are ridiculously cheap: the collected 200 works of Charles Dickens go for less than $5 total. (But I'm not ready to start reading them right away, so I haven't pulled the trigger on that purchase yet.) I picked up a Bible for free.

There are provisions for highlighting, saving quotes, making notes -- and downloading it all onto your computer. You can make the type any size, click on any word to get its definition, or look up any subject in the Wikipedia. It will hold and play MP3s, but that's an afterthought -- Amazon didn't give it a good music-player interface. The 1,500-book (1.5GB) capacity is an illusion; it's essentially infinite. Because Amazon keeps track of what you've bought, you can purge something from your Kindle and restore it later for free (with all your highlights and notes still in it, they claim). You can email text files to Amazon, and they'll convert them to Kindle format for you. The converted pages don't come out looking as good as the e-books you buy, but they're adequate.

Will the Kindle completely replace paper in my life? No. But I think that's a silly standard to judge it by. In addition to the books, magazines, and newspapers you just can't get on the Kindle, you can't loan Kindle-files to your friends, and you can't borrow them from the library. Paper books will continue to have their place. I'll just have fewer of them.

Given that I already have paper versions of all the classics I really want, cheap e-books won't make up for the Kindle's $350 cost anytime soon. (For a college student, they might.) But given that I rent a storage locker and don't want to rent a bigger one, it's worth money to me to own fewer physical objects. That, and the sheer coolness of carrying 1,500 books with me to the coffee shop.

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Short Notes

Indiana Republican Congressman Mike Pence knows just what to do in these times when nobody but the government is spending: "Freeze federal spending immediately!" I'm speechless.

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Every time the media goes 24/7 about some missing-person case -- Hayleigh Cummings, Caylee Anthony, Jon Benet Ramsey, Natalee Holloway, Chandra Levy, or some other cute white girl or pretty white woman -- I have a reaction similar to Colbert King's: Why does this person deserve so much more of our attention than all the other people who go missing? So many of them, in King's words, "are just black or brown blurs" as far as the media is concerned. Or they're male or ugly or fat or old -- so who cares?

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I almost wrote about Rick Santelli's rant last week, but decided it had gotten plenty of publicity without me. This week an interesting counter-charge was made: That Santelli's apparently spontaneous eruption on CNBC was actually the well-planned kick-off of an "astroturf" (fake grassroots) campaign.

Friday, Mark Ames and Yasha Levine (describing themselves as "veteran Russia reporters" who "spent years watching the Kremlin use fake grassroots movements to influence and control the political landscape") charged on Playboy's web site that Santelli's rant

was the launch event of a carefully organized and sophisticated PR campaign, one in which Santelli served as a frontman, using the CNBC airwaves for publicity, for the some of the craziest and sleaziest rightwing oligarch clans this country has ever produced. Namely, the Koch family, the multibilllionaire owners of the largest private corporation in America

For now, their article suggests and implies more than it proves. But re-watching Santelli in the light of their theory, everything looks different. His gestures seem practiced, his phrases a little too clever. It will be interesting to see if this story develops as more people look into it.

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The EPA is likely to start regulating carbon dioxide emissions.

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Texas is the flagship state for abstinence-only sex education. It's also a leading state for teen pregnancy, STDs, and misinformation.

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Cognitive scientist George Lakoff interprets the larger structure of Obama's message . Let me reframe his frame on framing: It's not about changing the outcome, it's about changing the game.

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Fahreed Zakaria notices that Canada is coming through this crisis better than we are -- largely because their government has tried to be sensible.

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You can produce your own lovely imitation of the Obama Hope poster.