Monday, November 30, 2009


We can be thankful to a friend for a few acres, or a little money; and yet for the freedom and command of the whole earth, and for the great benefits of our being, our life, health, and reason, we look upon ourselves as under no obligation. 
-- Seneca
In this week's Sift:
  • Global Warming: What the Hacked Emails Show. Having been in an academic dispute myself once, this all looks pretty normal to me. To find evidence of "the biggest scientific scandal in modern history" here, you've got to rip stuff out of context and then squint at it funny. 
  • The Special Inspector General's TARP Report. The AIG bailout looked nothing like an industrial bailout, and the big investment banks benefited from that difference. Are you surprised?
  • The Next Time You're in the Bookstore ... page through Shop Class as Soulcraft by Matthew Crawford. A young philosopher finds the blue-collar trades more intellectually stimulating -- and maybe more economically secure -- than cubicle work. That launches a fascinating meditation about what our jobs do to us. Plus a note relating a previous book review to the NFL's concussion problem.
  • Short Notes. Laid-off journalists compete with their former employers online. Rush wants a coup. Feminists defend Sarah. Dubai is broke. Why private charity is no substitute for universal health care. What religious persecution really looks like. And more.

Global Warming: What the Hacked Emails Show
By now you've probably heard about "climategate" -- the emails that supposedly show climate scientists conspiring to promote the global warming theory. Or maybe you haven't. How could you when (as I keep hearing) the mainstream media is refusing to cover the story? The Columbia Independent Examiner is outraged:
It is almost incomprehensible that major media outlets would refuse to cover what many people believe may very well be the biggest scientific scandal in modern history.
It's a wonder I heard about it myself, given that no one and no one else and certainly not 2641 hits on GoogleNews said anything about it. Clearly there's a media conspiracy to suppress the scientific conspiracy that spearheads the political conspiracy to institute a global Communist government through the UN. Nothing else explains it. 

Unless it happened like this: Some hackers stole 13 years worth of emails, leaked them to people who combed through them for more than a month looking for something they could take out of context, and then the right-wing media made a big deal out of nothing -- just in time to scoop a new report and damage the Copenhagen talks. Finally, the mainstream media did what they always do: covered the "controversy" created when the right-wing media makes a big deal out of nothing.

Hmmm. I think I'll go with Option B. My overall reaction is: You stole 13 years of emails and that's all you got?

Back when I was a mathematician, I was once in a much smaller academic controversy. (See page 8 of this article on the history of Kepler's Conjecture.) I "conspired" with three better-known mathematicians to publish a letter in the Mathematical Intelligencer saying that somebody else's paper was full of holes. We poured over each word of that letter to make sure we could defend it. But our private emails were not nearly so circumspect. We were rude, sarcastic, slanderous; we would have looked very unprofessional if those emails had been made public. Fortunately, nobody cared enough to hack into our accounts.

So am I shocked that in private climate scientists get catty about their critics, or that they discuss how to keep journals from publishing papers they believe to be nonsense? Not so much.

Ditto for the so-called smoking gun email, where of the scientists refers to something in his paper as a "trick." Among scientists, a trick is just something clever, not necessarily something deceitful. Nate Silver looked deeper into the content of this remark and concluded:
Jones is talking to his colleagues about making a prettier picture out of his data, and not about manipulating the data itself. ... I don't know how you get from some scientist having sexed up a graph in East Anglia ten years ago to The Final Nail In The Coffin of Anthropogenic Global Warming. Anyone who comes to that connection has more screws loose than the Space Shuttle Challenger.
Conspiracy theories typically founder on one point: Conspiring is hard, and the more people you need to organize, the harder it gets. Big conspiracies need a big motive that holds them together. (BTW, here's how to judge a conspiracy theory: Under scrutiny, bad conspiracy theories grow; they have to postulate more and more conspirators to account for all the details. But good conspiracy theories shrink; as you learn more about the systems involved, you realize how few people it would take to pull this off.)

That's why I don't believe that thousands of scientists are conspiring to promote a bogus theory of global warming. What holds them together? (Oil money glues together the smaller counter-conspiracy of global-warming deniers.) In order to make the global-warming-conspiracy theory work, you almost have to assume some larger political motive like a desire to impose a world government

But what holds that larger conspiracy together? If you pursue this stuff far enough, I think you wind up at the Devil -- some powerful force that is evil just for the sake of being evil. I don't see any other way to make it work.

Now, if you already have a Devil in your cosmology -- and especially if that Devil already sponsors a conspiracy of scientists pushing a bogus theory of evolution -- then a global-warming conspiracy makes perfect sense. Otherwise, not so much.

And you know who else is in on it? White House Science Czar John Holdren! He actually wrote email to some of the people involved, and discussed what the phrase "burden of proof" ought to mean. He must be, like, one of the secret overlords or something.

The Special Inspector General's TARP Report
Here's how a bailout is supposed to work: Some corporation owes more than it can pay, and its future prospects are dim enough that nobody is willing to make up the difference in exchange for stock. So everybody -- workers, management, suppliers, stockholders, creditors -- is facing some kind of loss. 

Then the government steps in with money, and that gives it leverage to deal out smaller losses to the stakeholders. It tells the workers, "You're going to accept some cuts, but that's better than if you didn't have jobs at all." It tells the creditors, "You're going to loosen the terms on your loans, but it's a better deal than you'd get if you forced the company into bankruptcy." And so on.

That's how the Chrysler bailout of 1979 and the current auto bailout worked. But that's not how the AIG bailout worked. The new SIGTARP report explains why.

The report does a good job of setting the stage: AIG went broke by selling credit default swaps, which was (and still is) an unregulated kind of investment insurance.
Although credit default swaps are sometimes referred to as insurance-like contracts, they are not technically considered insurance, and, unlike insurance contracts, credit default swaps are not regulated. As a result, AIGFP was not required to hold reserves to cover losses or other claims as it would if it was selling insurance policies.
In other words, the investment bankers were creating all kinds of complicated new investments loosely based on the housing market, and AIG was insuring them through credit default swaps. But the government had jiggered the definition of insurance so that AIG could back those CDSs with just its good name rather than by setting aside any assets. When the housing bubble popped, AIG was obligated to come up with a lot of money it didn't have.

Fearing that AIG was about to set off a cascading bankruptcy that would bring down the whole financial system, the government (in the person of Timothy Geithner, who in the late Bush years was president of the New York branch of the Fed) stepped in with money. Strangely, though, it didn't use the leverage its money should have given it.
AIG’s counterparties received $62.1 billion overall, effectively the par value of the credit default swaps. 
The counterparties are well-connected investment banks like Goldman Sachs, which received $14 billion from AIG.

Why? The answer that emerges from the report is one that readers of The Shock Doctrine will recognize: It all happened really fast.
when private financing fell through, [the Federal Reserve Bank of New York] was left with little time to decide whether to rescue AIG and, if so, on what terms. ... In other words, the decision to acquire a controlling interest in one of the world’s most complex and most troubled corporations was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG.
The initial intervention was inadequate, so the bailout of AIG happened in stages. As a result, the government dribbled away its leverage. By the time it was negotiating with Goldman, letting AIG go bankrupt was no longer a credible threat.

Also, the Fed tied itself up in "principles" that favored the investment banks. The Fed has a complicated relationship with Goldman; it could have said, "Play ball with us here or we'll make it hard on you somewhere else." But Geithner decided that would be unethical. Also, he and Bernanke respected "the sanctity of contract" -- a principle routinely violated when bailouts involve union contracts.

Having read the report, I have a much clearer notion of how the AIG bailout favored the investment banks, but not necessarily why. Or maybe the Why is obvious: They're the Big Boys in the economy; the government works for them, not for us.

The Next Time You're in the Bookstore ...
... page through Shop Class as Soulcraft: An Inquiry into the Value of Work by Matthew Crawford.

We all think we know stuff like this:
  • Automation replaces drudgery with more meaningful work.
  • The jobs of the future will require more training, education, and just plain intelligence than the jobs of the past. 
  • Careers that involve working with your hands and getting dirty are a dead-end, both economically and intellectually. If your kids have any brains, you should steer them in some other direction.
What if none of that is true? Is that possible?

Matthew Crawford is (like me) a University of Chicago Ph.D. His philosophy degree got him a good-paying job as the head of some science-for-hire "independent" group set up by the oil industry to deny global warming. After a year of that, he junked his whole career to open a motorcycle repair shop. He thinks that was a good move, not just morally but mentally: Fixing bikes is more intellectually stimulating and satisfying than pushing policy arguments toward a predetermined conclusion.

Crawford has written a thoughtful, interesting book that resembles two books from the 1970s: the popular Zen and the Art of Motorcycle Maintenance and the much less popular (but still important) Labor and Monopoly Capital: The Degradation of Work in the 20th Century by Harry Braverman. The Braverman influence gives Crawford's book a social/political heft that Zen lacked. The Zen influence gives it a personal resonance that Braverman's book lacked. 

Crawford takes this point from Braverman: Profit-making industry has a compulsion to turn skilled labor into unskilled labor. What was once the ingenuity of a craft gets captured (imperfectly) in algorithms, which are then either taught by rote to unskilled workers or built into machines. I'll make up some numbers to illustrate: Over time, a thousand village cobblers might get replaced by two shoe designers, six process engineers, thirty assembly-line workers making 25 cents an hour in Indonesia, and fifty minimum-wage retail clerks -- none of whom have a cobbler's knowledge of the feet in his particular village.

Cubicle-based knowledge workers are not immune to this process, and a great deal of office work has been similarly "stupidized." With consequences: Push your intelligence down for eight hours a day and you might lose it. Crawford believes our jobs are injuring our ability to think.

Crawford revolts against the idea that manipulating symbolic knowledge requires a higher intelligence than working with things. Mechanics, carpentry, plumbing, and other skilled blue-collar trades not only require ingenuity, they provide the kind of objective feedback -- the engine either runs or it doesn't -- that the mind needs. And he suspects they are also safer career paths than many more intellectual fields:
Since manual work has been subject to routinization for over a century, the non-routinized work that remains, outside the confines of the factory, would seem to be resistant to much further routinization.
Finally, he urges us to look at our jobs and ask how they are shaping us. Might we save our souls by accepting lower-paying work that is better suited to human beings -- who are both physical and mental -- than to machines or pure intellects? Unlike Braverman (a Marxist), Crawford offers no systemic solutions. But he does raise the question: Might we all be happier if we organized our economy around holistic, satisfying work rather than around high production at low cost? Is that possible?

A couple months ago I reviewed Doubt is Their Product. It explored the science-for-hire industry, which corporations routinely use to obfuscate evidence that they are killing their workers and to delay regulations that might stop them from killing more.

Well, here's a high-profile example: The National Football League has a concussion problem. Evidence is mounting that retired NFL players have high rates of dementia, memory loss, and other long-term brain problems. (An NYT photo caption says: "John Mackey, left, and Ralph Wenzel were both on the San Diego Chargers in 1972, but have no memory of playing together.") A number of star quarterbacks -- Roger Staubach, Troy Aikman, Steve Young -- were forced into retirement by repeated concussions.

OK, but killing is an exaggeration, right? Not really.

So naturally the NFL hired its own committee of scientists to "study" the issue. That committee "has been the league’s primary voice discrediting all evidence linking football players with subsequent dementia or cognitive decline." Of course it has. Now that the public relations problem is getting out of hand, the head of that committee resigns as a scapegoat, and the league is "requesting credit for improving conditions without accepting its role in preserving the conditions that required improvement." Of course it is.

Short Notes

Some of the people being cut from the big-city newspapers are forming their own web-based local news ventures to do the things the big papers say they can't afford to do any more: real local coverage and investigative reporting.

Rush Limbaugh calls for a military coup. Unless he's joking or something. Who can tell?

Conservatives often wonder why feminists don't speak out against the media's treatment of Sarah Palin. Well, when the treatment is actually bad rather than just truthful, feminists do.
I guess I should have seen this coming: Dubai is out of money. It is one of the seven United Arab Emirates and sits across the Persian Gulf from Iran. Dubai itself has little oil (another emirate, Abu Dhabi, does), but has been on a debt-financed building binge as it attempts to be the business center and tourist destination of the region. (Picture.) Apparently Abu Dhabi is cutting off its spendthrift cousin.

Individuals in Dubai have been in debt-trouble ever since the worldwide recession started last year. Ex-pats from elsewhere in the Gulf have been fleeing the country rather than face the emirate's sharia-based punishments for default. By February, Dubai authorities had found thousands of abandoned luxury cars in the airport parking lot, some with maxxed-out credit cards inside. 

NYT columnist Nicholas Kristof tells the story of John Brodniak, a 20-something guy who had a job with health insurance until he got too sick to work. Now he is uninsured, in constant pain, and might die (leaving behind a wife and two step-children) even though an operation might fix what's wrong with him.

Eric Cantor has already told us the Republican answer to a situation like this: private charity. Now that Kristof has made us aware of Brodniak, we should all send his family a few bucks and soon they'll have enough to pay for his surgery. The problem (as Kristof points out) is that 45,000 Americans each year die from treatable conditions because they have no way to pay for care. So if each of the top 45 syndicated columnists called our attention to one such case each day, it would take almost 3 years to help them all. (You'd send money every day for three years, wouldn't you?) 

But wait, that wouldn't work either: The ones we didn't get to in the first year would be dead already, and the list would have gotten 45,000 names longer. If only there were some systematic way to provide the care Americans need, rather than depending on individuals like Kristof bringing individuals like Brodniak to our attention. But that's crazy talk. We'd have to be a totally different kind of society (a Communist or Nazi one like Canada or Denmark) before we could do something like that.

Tom Schaller takes on the strange idea that health-care reform is somehow unconstitutional. (And I know I linked to this Onion piece this week, but it's relevant again.)

I keep finding articles that make this point: There is a lot of room to give Americans better health care at lower cost, if people are motivated to do it. The secret is that quality doesn't cost, it pays. We spend vast amounts of money treating the problems caused by low-quality care.
Everybody wonders whether or not consumers will spend this Christmas. The early reports from retailers about Black Friday were mildly optimistic, but I wonder. Late Friday afternoon and again on Sunday I went to my local mall (Pheasant Lane on the NH/Mass border). It was busy, but in an ordinary way rather than a most-wonderful-time-of-the-year way. I easily found parking and walked wherever I wanted without being jostled.

Slate's Farhad Manjoo advises you on what not to buy this holiday season.

Every year around this time we hear about the War on Christmas and how American Christians are victims of persecution. But a story like this one reminds us what real religious persecution looks like: A Cincinnati atheist group put up a billboard not attacking or insulting anyone, but simply giving the URL of its web site and saying: "Don't believe in God? You are not alone." Within 48 hours the billboard had to be moved because of "multiple significant threats" to the owner of the property it stood on.
In Europe, religious persecution looks like this.
An article in Foreign Policy wonders why more American Muslims don't snap.

I have no idea how well this plant-mimicking ocean-wave-power-generating system will work, but it looks cool.

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