1) Mike Konczal (aka. Rortybomb) lays waste to a rather silly - in my estimation - meme that has been replicating itself in the minds of the right-leaning of late, namely, the notion that the very existence of FDIC deposit insurance is a great sinkhole of moral hazard, and responsible for the Great Recession. Not only does the meme in question confuse the very different funding, asset, and risk structures of depository institutions and investment banks, it also presupposes, in this Brave New World of engineered finance, that ordinary depositors must become conversant with the kabbalistic financial techniques of this Brave New World, if they are to evaluate their banks. Not bloody likely. The fact that such a meme could even gain some traction among the commentariat is a reflection of widespread confusion regarding the existence and nature of public goods; moreover, it is illustrative of the consequences of rejecting such public goods, of which basic deposit insurance in commercial banks is one: the fanatical pursuit of every last possibility of moral hazard, however small and remote, however deeply buried beneath layers of asymmetrical information, results in systemic hazard, as the absence of such insurance would leave the average depositor recourseless before the machinations of the calculating and dishonourable. Then again, it is a blind and stupid liberalism (or libertarianism) that suffers the depositor and the speculator alike to suffer ruination.
2) Mark Thoma links to a brief paper on the political origins of widening measure of inequality in the US over the past 30-40 years. John Schmitt discounts both of the common explanations for the increase in inequality, regarding the 'technological progress' and 'globalization' theories as inadequate. The fundamental problem with the former is that, even if technological change were a wholly exogenous force, this would still underdetermine our political and social responses to it; the problem with the latter is that, to appeal to my own preferred terminology, globalization is not a self-subsisting, self-sustaining project, but an artifactual one, embedded in discrete political decisions. Whether one thinks widening inequality is good, bad, or neutral, we have chosen it, not had it thrust upon us as a force of nature. Why is inequality potentially bad? Because, as has been known at least since Aristotle, a representative government cannot survive vast extremes of wealth and privation.
There was one passage of Schmitt's paper that I wanted to spend more time discussing; it comes on page seven, and concerns the shift, in recent decades, towards the privatization of many formerly public services. Like highway maintenance and traffic engineering, areas with which I have some familiarity. Back in the late 80s, before the privatization push had really achieved its full head of steam, traffic engineering studies were typically conducted either by a small handful of consultancy firms, or dedicated public employees; the studies were well-funded, the people responsible for them almost uniformly competent; and the relevant agencies willing to spend more to acquire superior instruments, which produced superior data. Superior data entailed superior planning, which entailed superior infrastructure. The privatization push introduced a double cost-sensitivity, at the level of the state agencies paying for the studies, and within the consultancy firms that sprouted like mushrooms; the consequence of this was the slashing of public works staffs, and an increasing reliance on private firms, which themselves sought to slash costs at every turn, to maximize the take of the principals. Hence, they often purchase inexpensive, shoddy, unreliable instruments, and employ marginally competent technicians to use them, with the result that the quality of the data is poor, and highway planning that much poorer. Long-run costs will increase, of course, as this sort of privatization is merely a strategy of deferral, and it is but one factor behind our deteriorating road networks, but it is one I can speak to from experience.
3) Conor Friedersdorf, writing at the Daily Beast, discusses last week's disclosure by DNI Blair that the Obama Administration will now authorize the assassination of American citizens who pose an "imminent" threat. Given the capacious powers arrogated by the previous administration, the inherent fuzziness of terrorism determinations, the tendency of such precedents to gradually engulf adjacent categories of circumstances, and the inherent reluctance of government to relinquish powers once exercised, one would think this an occasion for deep, prudential reflection. Apparently not. Discussion of the matter at The American Scene featured a Mr. Sargent assuming the politically "conservative" posture, justifying the assassinations as wholly consonant with precedent and law. When, I ask, did conservatism become, not merely an errand boy for unaccountable powers over life and death, but a bastion of rank positivism: it's legal, so let's not think about it too deeply? Gone, apparently, is the old conservatism of prudence, and skepticism about unanswerable power. In conversation with Paul, he has averred that republican government might not survive a protracted encounter with the jihad. At the present rate, it might not survive even a brief - in historical terms - encounter. Off at the theoretical end, that would present us with the choice of our despotism, or theirs. "Our despotism", complete with administrative detentions, arbitrary and unaccountable law enforcement, and the whole run of it, isn't much of a rallying cry. A hangman is just a hangman.
4) Bernard-Henry Lévy has published an intemperate critique of Kant - all on the basis of the work of a non-existent philosopher, an elaborate satire. Cue jokes, resentful and schadenfreude-tinged or not, about academics.