An awkward summit at an awkward point in an awkward era at an awkward venue with potential topics every bit as awkward as they can be.

Is it awkward to ask it if it is really the US constitution that is awkward?
 

I'm pretty sure there's going to be an actual summit next week, not a "purported" one, and I think we all know it's going to be attended by the guy who is actually President right now.

"Purported". Grow up, will you?
 

Whatever will Prof. Levinson have to post about when Bush is gone?
 

In four years, if the voters give President Obama the heave ho ala Carter, I tend to doubt I will be reading posts decrying the acts of the "politically illegitimate" President Obama during the transition period to a "politically legitimate" GOP president elect.

Sandy, you should be thankful that an unprepared Mr. Obama without a selected Sec Treasury is not attending this summit. It would not be an auspicious start.
 

He's not posting "about" Bush, he's using Bush as a convenient example for what he considers the dysfunctional parts of the Constitution. Those parts will remain dysfunctional even when the government is run by someone of good faith; we just won't notice it as much and might forget the need to change.
 

@Mark Field,

Do you generally agree with Professor Levinson's concerns about defects in the Constitution? How do you feel about his proposed solution? (I'm sure you've picked up on my feelings.)
 

Bart, you were so much more fun when you were arrogant and in power. This whole typing-through-your-tears thing is really pathetic. I appologize for our President-Elect's deliberate pace with which he is deciding his cabinet. Of course, it is only after the moment of actual decision that a person can begin to understand the economy and its problems. As of this moment, Paul Volcker, Larry Summers, Tim Geithner, et al. are still on media blackout, having heard nothing of the economy for many years and whoever is selected will need to start with a prep course whose first sentence is, "The United States of America uses a currency known as the 'Dollar'."
 

Do you generally agree with Professor Levinson's concerns about defects in the Constitution? How do you feel about his proposed solution? (I'm sure you've picked up on my feelings.)

I often agree, but not always. For example, I believe he has argued in the past for eliminating the presidential veto. I wouldn't do that, though I'd reduce the veto override to 60%.

As for the prospect of a Convention, I have mixed feelings. It's very hard to amend the Constitution now, and some of the worst parts (equal representation in the Senate) are both hardwired in and impossible to change. That makes a Convention seem like the only route. Against that there is the risk to civil liberties.

My somewhat pragmatic view is that in the long run we can't maintain civil liberties in the face of persistent public opposition, at least we can't do so and continue to pretend that our government is republican. That means we need to face the risk up front and depend on educating people to understand their purpose.

I also strongly believe that the current unrepublican structure is a formula for real problems in the long run because it prevents the government from making decisions which represent the "permanent and aggregate interests" (Madison's phrase) of the nation . Since I believe in majority rule, I'd like to open up the Constitution so that we actually implement it (with safeguards). If we can't trust a Convention, then why do we trust the people generally?

Finally, I think -- I hope -- we're emerging from a long nightmare in which civil liberties were trashed by the Right as part of the "culture wars". I think the overall political environment now and in the near future would be more conducive to the protection of fundamental rights than at any time in my lifetime.
 

De gustibus non est disputandum;—that is, there is no disputing against Hobby-Horses... - Laurence Sterne.
 

Ol Mucky writes:
Bart, you were so much more fun when you were arrogant and in power. This whole typing-through-your-tears thing is really pathetic.

I think Bart is trying to say, through the try-to-backhandedly-insult-obama-via-carter veil, that for a president to take over office the day after the election could mean that the president's administration could very well be ill-prepared to hit the ground running, which makes sense.

If the president were to take office the day after, all the picks would need to be in well in advance, otherwise it could easily be a disaster. This could be a good thing as well, since the picks could very well play a bigger role in the campaign as they would be made during rather than after.
 

ol mucky said...

I appologize for our President-Elect's deliberate pace with which he is deciding his cabinet.

I think you need to direct this apologia to Sandy. I argued here and before that Obama and every other president needs the transition period to choose a qualified cabinet.
 

Mark Field: "I think the overall political environment now and in the near future would be more conducive to the protection of fundamental rights than at any time in my lifetime."

I wish I were so optimistic. I do not trust the people, and so do not trust a Convention. Nor do I think the damage done to civil rights/civil liberties by the exiting administration will be substantially undone by an Obama administration. In particular, I don't think the electorate will allow the MCA and host of other things about which I've complained incessantly to be easily unplugged.

I think an Obama administration will be substantially less likely to further the erosion of civil rights/civil liberties, but I doubt he'll be able to do much to fix the damage done. That task will take a generation or more.
 

Again, it isn't like I'd love to see Bush govern one more day than he has to, but Bart's right. Transitions take time. The federal government is complicated.

And the reality is, I doubt that Bush is going to make any really major decisions without at least consulting with Obama. This is a non-issue and I think we should let Bush do his job while he still has it.
 

<< I do not trust the people, and so do not trust a Convention. >>

Sic Semper Tyrannis ... mr. link ..
 

It does take time to staff a new administration, but perhaps if there were such an "unreasonably" short as 13 weeks, candidates would begin earlier. If the short deadline would pressure on candidates -- and allow voters and the press to pressure candidates -- to flesh out the substance of what they propose by identifying (by announcement or through inevitable leaks by staff) those whom they select to implement their agenda, the voters would benefit, and the new administration would be able to hit the ground striding purposefully, if not running.
 

I do not trust the people, and so do not trust a Convention.

I do, though within some Madisonian limits. In the long run, the people as a whole are the best determiners of their own interests. We might choose to mediate their decisions in various ways in order to assure that short term emotions don't undercut their long term views, but we may as well give up on republican government altogether if we don't trust them once we have the safeguards in place.

When I say that the current environment is more conducive to the kind of change needed, that doesn't mean I think all the disasters of the current Administration will be corrected immediately; I expect that to take a generation. What I mean is that there's more liklihood that people with a broader view of the country's interests are likely to be in charge.
 

The current two weeks have been an interesting test of some of SLevinson's concerns oft expressed. I think it worthwhile observing the presidency employs more than 2500 people. For comparison I glanced at early demographic data for the time around the constitutional convention, and the first census in 1790. New York city's population was about 33,000. In 1810 MI's population was about 4,000, and a twenty years later MN's population was near 4,000 as well. I doubt congress would like to describe what a lameduck president might do to conduct foreign affairs, but it is a nervous time, the interegnum. Still, our presidency is designed to be strong and continuous, one of the unique mainstays of our system of government. I can appreciate that, even given the vagaries of the patchwork policies that comprised the current presidency and their seeming imperviousness to checks and balances. The certitude of the electorate's voice last week seems to have smoothed the transition in the best possible tradition, according to constitutional guidelines. Writing the history may be a challenge, if much of the original documentation is unavailable, however.
 

When it comes to international commerce, I think we can all agree that a president lacks the constitutional authority, on his or her own, to enter into binding international agreements.

Of course, there is nothing to prevent a president from putting his or her signature on an agreement intended to regulate international commerce -- and to do so without the consent of a president-elect. But does anyone seriously think President Bush will attempt to do that next week?
 

I do not think that a Convention is likely to result in a constitution as good as the one we have now. However, it might result in a constitution that's actually being followed, for a while anyway, and that could be better than having a really nice Constitution that's largely ignored.

However, do you really think we're ever going to get a convention, in any meaningful sense? The Constitution has stopped being amended, not because there are no changes which would be readily ratified, but because Congress won't send any amendments to the states. (Notice how the Republican Congress after '94 stage managed the balanced budget and term limits amendments, to make sure everyone who needed to could vote for one version or another, without the risk any particular version got enough votes to go to the states?) The purpose of a Convention would be to bypass Congress, to obtain amendments Congress doesn't want.

But there's a fatal flaw in the Convention process: The states have to ask Congress for a convention, and the details of how it will function are not specified.

So, the states ask Congress to let them bypass Congress, in order to enact amendments Congress doesn't want... Really think that Congress is just going to let them have their convention? Give up their ability to block any amendments they don't like?

If the states call for a convention, and Congress ignores them, do you really think the courts will enforce Article V? I don't, I think they'll declare the whole matter "non-judiciable", just like they do the quorum requirement, or the demand that both houses pass a bill before it can become law.

Or, Congress could agree to a convention... And declare it's own members the perfect delegates. And, again, the courts will refuse to take the case.

Either way, I predict a call for a convention will trigger a genuine constitutional crisis.

Oh, and do I trust the people? Hell, no! Majority rule is just another form of tyranny, the tyranny of the majority. I suppose from a utilitarian standpoint it's better that the majority oppress the minority, than the other way around, but it's still oppression.

Really, the genius of the Constitution was that it limited federal power, kept so much out of the hands of government. But why would anyone IN government ever admit that?
 

"We firmly believe there is only one president at a time.”

Well, yes, and who, precisely, would that be?

To me this sounds merely juvenile. An unbridled hankering after instant gratification.
 

Hopefully, Mr. Obama is paying attention because Mr. Bush is putting on a clinic at this summit about how to pit our rivals against one another to obtain US objectives.

Originally, this summit was supposed to be limited to the G8 where the Euros were planning on ganging up on the US to push a French plan for a virtual multi-government takeover of the world banking system. Under such a plan, the EU would have a substantial role in regulating our banks.

To avoid this ambush seeking foreign intervention in our affairs, Mr. Bush invited China and several other economic powers to the summit who also have no desire to allow the EU to regulate their banks, neatly countering the EU effort.

Lame duck my ass.
 

That Bush fella is quite the strategizerist. With allies like China, what could possibly go wrong?
 

Originally, this summit was supposed to be limited to the G8

Baghdad, can you point me to a link that supports your claim that Dumbya turned a G8 Summit into the G20 Summit all by his lonesome?
 

There is an interesting article in lawDotcom describing how the last severe economic contraction motivated passage of a measure by which Congress foreshortened the lame duck span to its current duration.
 

Firstly, the G20 conference in Washington is very much a staged showcase principally designed to convince national electorates and the financial community that the the politicians have understood the global nature of the financial crisis and that concerted international action will be required to overcome it. It is, if you like, the opening game in a major tournament. The real work will be done over time, not by the heads of state and government, but by expert multinational working groups.

Secondly, the objective at this time is to look at the structures which were first established at Bretton Woods in recognition of the very great changes which have taken place since then: in 1945 the USA was the only free world state with a working economy - most of the large European economies were bankrupt. The USA was the world's creditor - and although there were figleafs, the World Bank, and the International Monetary Fund were dominated by the USA as the creditor nation keeping all the others afloat.

Just look at how the situation was in the UK in the 1950's. We had Exchange Control. No UK resident could lawfully hold any foreign currency - all overseas earnings had to be surrendered to the Treasury for sterling. Government decided what the nation could afford to purchase overseas using what foreign currency the nation had, and if a particular item did not fit within the national scheme - then the prospective importer found his application for foreign currency denied. So, for example, I was already at school when bananas and oranges slowly started to reappear in the greengrocers (until then orange juice had only been available with coupons for pregnant women). Much domestic
manufacturing was for export only in a drive to earn more foreign currency - the goods were not available for the domestic market. So one could not simply walk into a dealer and buy a car - one went on a waiting list until once became available for the home market. Foreign travel for pleasure was impossible at first and later subject to currency restrictions until the 1970's. I well remember the annual allowance of £50 for personal travel.

Although those restrictions have all gone today, the legislation remains on the statute book (the Exchange Control Act 1947) and could be reimposed in a flash.

Now the situation is very different: The EU is a single trading bloc and the US-EU economies are closely interlinked - see EU Washington Delegation Economic Data Page.

So, I do not think that in practice, it makes a blind bit of difference that the conference kicks off under the Bush Administration - the serious work will take place in 2009.

LSR Bart indulges in some wishful thinking:-

"Hopefully, Mr. Obama is paying attention because Mr. Bush is putting on a clinic at this summit about how to pit our rivals against one another to obtain US objectives.
Originally, this summit was supposed to be limited to the G8 where the Euros were planning on ganging up on the US to push a French plan for a virtual multi-government takeover of the world banking system. Under such a plan, the EU would have a substantial role in regulating our banks.
To avoid this ambush seeking foreign intervention in our affairs, Mr. Bush invited China and several other economic powers to the summit who also have no desire to allow the EU to regulate their banks, neatly countering the EU effort.
Lame duck my ass."

1. The best analogy for this G20 meeting is that of a meeting of creditors in an insolvency. As opposed to the immediate post-WW2 situation, the USA is not the world's creditor and indeed the shoe is now on the other foot. As a fairly major creditor of the USA, China, for one, has a legitimate right to a seat at the table.

2. The summit will most certainly be concerned with regulation of banks and other financial institutions. The banking system today is a "world" system and basically, what is needed is assurance that each national regulator regulates to broadly the same standards so that other national regulators may afford "full faith and credit" to the work of the national regulator of each institution. This is already in operation within the EU - a French bank operating in London is regulated by the French regulators and vice versa.

If the USA wishes not to bring its regulation into line, then every US institution operating in the EU will require to be fully regulated twice: once by the US and once by the EU - doubling the burden. The alternative will be withdrawal of banking licences.

If the USA is unhappy with that that's a perfectly legitimate position for a sovereign state - but I doubt it would be what the US banks want. They need to be able to take deposits in Europe.

3. The EU has already signalled that it is taking steps to regulate the US credit rating agencies separately because they were found wanting in the recent melt-down.

4. The EU and other nations have had 8 years' experience of Bush Administration diplomacy. It might be said that the expression is an oxymoron. That is why nothing substantive will be accomplished at this meeting other than to set the wheels in motion to start the real work once the new US Administration is in place.

While I understand that LSR Bart may be wishing to turn the red county of Colorado Springs into the 21st Century equivalent of the Repubblica di Salò, the last redoubt of the philosophy he has espoused, he might do well to read Jonathan Freedland's op-ed in today's NY Times An English Lesson which rather echoes much of what was being said at the Republican Governors' Conference in Miami.
 

"He's not posting "about" Bush, he's using Bush as a convenient example for what he considers the dysfunctional parts of the Constitution."

Yeah, right. That's why every post eventually gravitates back to the basic argument, "Any constitution that permits BUSH to remain in power one second longer is broken." Because it's not really about Bush.

I don't recall Sandy getting upset about Clinton remaining in office after the 2000 election, and I will frankly be shocked if he's still beating this drum after the 2012 election, assuming Obama doesn't get reelected.
 

LSR Bart indulges in some wishful thinking

Take away his wishful thinking and what is Bart left with?
 

"Take away his wishful thinking and what is Bart left with?"

His backpack of lies?
 

Given that a functioning democracy still requires that there be some alternative for electors to choose, there is an interest in seeing how the Republican Party reacts to electoral defeat. I also found this op ed from last week's Dallas Morning News Rod Dreher: Here comes the conservative civil war which LRS Bart and his fellow travellers on the extreme right may care to consider.
 

This comment has been removed by the author.
 

Mourad:

1) There is nothing new about multi-national companies having to comply with the regs of the nations in which they operate. If US banks wish to comply with onerous EU regs to operate in the EU, that is fine. However, there is absolutely no need to import EU bureaucratic sclerosis into the United States.

2) I would not mind at all if the Obama Dems followed the example of Blair's New Labor which simply continued the Thatcher economic reforms. I certainly do not want the GOP to follow the lead of the post-Thatcher Tories, who have descended into a reactionary party.

However, I do not see the likelihood of either outcome.

The Obama Administration will either do nothing of consequence to avoid offending anyone so they can retain power or will lurch seriously left and muck things up. I would love to see them pull a Clinton and co-opt conservatism so we can pull out of this recession quicker, but I do not see that happening with Obama/Pelosi/Reid.

The GOP has now lost its wobbly left flank and can get back to first conservative principles. It is unlikely that Obama will pull a Clinton and co-opt conservatism, so the GOP can reestablish the brand to itself. The question is whether it will.

3) The lesson of the 2008 election is hardly that GOP conservatism lost because it became to purist as suggested by the Dreher article.

Reagan and the Bushes started with the conservative GOP base, built outward and won.

McCain started in the center with Indis and Dems, the GOP conservative base stayed home and the "Maverick" lost badly at the polls.

The lesson is pretty clear. Get back to conservative first principles, rally the GOP base and build outwards.
 

LSR Bart writes:-

There is nothing new about multi-national companies having to comply with the regs of the nations in which they operate. If US banks wish to comply with onerous EU regs to operate in the EU, that is fine. However, there is absolutely no need to import EU bureaucratic sclerosis into the United States.

Where ignorance is bliss...

1. Bart plainly has no idea what the burden of double regulation is.

2. The EU has a bureaucracy of only 32,000 - which compares quite favourably to that of Federal Government.
 

Mourad:

The number of bureaucrats employed by the EU and the US is irrelevant. There is no question that EU regulation in general and that proposed for the banking system is far more invasive that that of the United States.

Of the two of us, I am the only one with libertarian instincts. I am well aware of the burden imposed by one layer of regulation nevertheless a second layer from overseas. Given that capital flows fairly freely between nations, apart from gaining deposits in the EU, there would be no reason for US banks to operate in the EU. They can lend overseas from the United States under our rules. Indeed, if the EU is too heavy handed and the Obama Administration does not follow suit, we may be able to attract EU banks to the US.
 

Get back to conservative first principles, rally the GOP base and build outwards.

# posted by Bart DePalma : 10:01 AM

I'm definitely cheering for you and Sarah Palin to win that fight!
 

Here's something for Sandy's theory:

"President-elect Barack Obama is pushing Congress this year to approve as much as $50 billion to save cash-starved U.S. automakers and appoint a czar or board to oversee the companies, a move that would require President George W. Bush's support, people familiar with the matter said."

My guess is that the president and the president-elect will work out their differences on this issue.
 

oh yes .. recent events here certainly demonstrate our banking sector has been seriously over-regulated ..

and pigs fly as well ...
 

jkat:

The primary problem was that the banks were underwriting mortgages to the non-creditworthy at the request of and coercion by the US government.

The secondary problem was that many of these mortgages are bundled into opaque derivatives which are hard to value and insure.

Solutions to these problems do not require an EU style virtual nationalization of the banking system via regulation.

The solution to problem one is indeed further deregulation to get the government out of the business of pushing loans to the non-credit worthy.

The solution to the second problem does require a modest regulatory solution to the derivatives problem to return transparency.

Instead, what is happening is that the US proponents of a regulatory state have come back from a generation long banishment and are dishonestly attempting to leverage these rather modest problems into a new New Deal monstrosity
 

When little Lisa's bro was minoring in economics, he must have been majoring in DUI. Even his hindsight is like looking through the wrong end of the telescope. And how does a true libertarian survive in a nation of over 300 million? As his backpack of lies gets larger and larger, he will become the Quasimoto of Colorado Springs, with his knuckles dragging on the turf and ringing the silent bells of the neocons.
 

As an amusing logic exercise, I've logically inverted (as far as such "logic" can be inverted) each of Bart's assertions.

Now, I make no claims to economic expertise, but all the assertions below seem, on the surface, to be at least as reasonable as the originals.

The primary problem was not that the banks were underwriting mortgages to the non-creditworthy at the request of and coercion by the US government.

A more important problem was that many of these mortgages are bundled into opaque derivatives which are hard to value and insure.

Solutions to these problems may require an EU style virtual nationalization of the banking system via regulation.

The solution to problem one is more careful regulation to ensure that lending institutions do not over-leverage.

The solution to the second problem requires tight regulation to prevent a further Ponzi scheme in the derivatives market.

For a guide as to how to build the regulatory structures needed, it is only necessary to look at what was done by FDR in rebuilding trust in banks in the 30's.
 

c2h50h:

The Bizarro World inversion of my post was amusing.

A world where a mortgage foreclosure crisis was not caused by failures of the borrowers to make their mortgage payments is rather strange to say the least.

It is even stranger to claim that the solution of a failure to make mortgage payments is a New Deal style bureaucracy to restore confidence in the banks.
 

Bart,

Can you actually disprove the assertion that the primary cause (not merely the trigger) of the financial crisis was all the derivatives that banks suspected other banks were holding?

If so, put up your proof (preferably in the form of a link to some authority we can believe). Otherwise, the assertion remains as a viable theory. Please note: I am not arguing that the assertion is true, merely that the blatant assertion of its opposite is no more supported by the facts.

Which is the bizarro world? After all, as we all know, in bizarro world, they think they're the normal ones.
 

c2h50h said...

Can you actually disprove the assertion that the primary cause (not merely the trigger) of the financial crisis was all the derivatives that banks suspected other banks were holding?

Easily.

The assets at issue are mortgages.

The reason that these mortgage assets fell in value is because borrowers failed to pay their debts and the banks foreclosed at a loss on a substantial portion of these mortgages.

Derivatives are simply a means of packaging mortgage assets for investors.

Derivatives had nothing at all to do with the loss in value of the underlying mortgage assets.

The sole problem with the derivatives is that it is extremely difficult to determine the percentage of bad debt included in each instrument. Thus, lenders to banks and other investors owning these derivatives have to assume the worst that all of the underlying debt covered by instrument is bad.

In sum, the base problem is the default of non-creditworthy borrowers that lowered the value of mortgage assets. Without this default, there is no mortgage and banking crises.

The derivatives compounded this problem by making it difficult to determine the extent of the losses suffered by the owners of these instruments.

The solution to the base problem is to set a minimum creditworthiness standard for mortgage lending and the government needs to stop pushing loans to people who fall below that standard.

The solution to the secondary derivatives problem is to set regulations to clarify what assets are covered by these instruments or outlaw them outright.

BTW, there was another major contributing factor to this mess caused by the government that is in the process of being cured. The mark to market accounting method imposed by Congress overvalued assets in the previous bubble market and undervalued assets when the market went bad. I believe this rule was essentially suspended, which probably is the primary reason the LIBOR interbank lending rate has fallen substantially.
 

Bart,

I asked you nicely to put in a link, not spew garbage here.

Example: "the assets at issue are mortgages." This is false. The assets at issue are the derivatives, whose relationship to the mortgages they are theoretically based on is largely unknown.

Your "explanation" of the crisis and "derivatives" reminds me of an explanation of Calculus given by a third grader.

I deduce from what you've said that you have nothing to rely on but argument by assertion.

May I gently point out that argument by assertion only works when used by someone who speaks with authority (and even then, it's not a very honest argument)?
 

c2h50h:

I gave you my reasoning and have provided several links in past discussions of this. I have to get back to work. Go on google and find your own links. This is well reported.

If you disagree, you are welcome to explain how derivatives could have possibly caused the mortgage crisis absent the default of unqualified mortgage borrowers.
 

In sum, the base problem is the default of non-creditworthy borrowers that lowered the value of mortgage assets. Without this default, there is no mortgage and banking crises.

BS. The base problem is that the "creditworthiness" was based on flawed assumption about home prices and the general economy; it was a Ponzi scheme that banks thought would rake in big bucks for as long as they could keep it going. But the laws of physics can't be repealed, and sooner or later the market couldn't be fluffed any more (no matter how much banks tried to do so by easing entry requirements), so the thing fell to earth. It was at that point that the attempts to keep it going ended up causing the fall to be the more precipitous.

The "bundling" and derivatives was just a means of obscuring what was happening. Such bundling wasn't malum per se, but was used in the prepetration of fraud.

Cheers,
 

Mr. DePalma,

No, c2h50h is correct. The problem asset (as far as the credit crunch goes) are the mortgage backed securities. You are correct the underlying assets are mortgages, but the current mortgage failure rate does not create a systemic problem absent the securitization and packaging. The crisis is due to the derivative's uncertain value, and large financial institutions' dependence on those assets to establish their worth. Your viewpoint is too simplistic, and does not go far enough up the cause and effect chain – without the possibility and demand for securitization of sub-prime and alt-a loans, the bad mortgages would not have been made. It was only the ability of the relatively unregulated non-standard originators to package up and sell away the risks they were taking on sub primes that made it profitable to make such loans.

This gets back to the other fundamental problem with your analysis, a factual one. The government did not force the originators to make the loans, nor did they force the banks to purchase the securities. . The real problem is that the loan originators could take a fee and pass the securitized debt up the ladder, with no risk to themselves whatsoever. Government regulation did not cause the problem – private enterprise and rationality-blinding greed caused the problem. Most of the bad loans were originated by entities that were not regulated by the federal government. (Sub-prime and Alt-A) I understand the conservative talking point du jour (for many jours) is to keep up the Reagan “government is the problem” pretenses, but it has no basis in reality.

Besides, the real problem is what a revaluation means in light of outstanding credit default swaps. That is the abyss we are looking into. It is the uncertainty of the value of the MBS that began the crisis, and these cause the uncertainty of the stability of those financial institutions, which then begets the 800 pound gorilla in the room, the CDS that become payable if too many of these institutions default on their own obligations. Everything is daisy-chained together.


BTW, there was another major contributing factor to this mess caused by the government that is in the process of being cured. The mark to market accounting method imposed by Congress overvalued assets in the previous bubble market and undervalued assets when the market went bad. I believe this rule was essentially suspended, which probably is the primary reason the LIBOR interbank lending rate has fallen substantially.


absolutely, positively, the worst possible thing to do. The MBS were overvalued because of irrational exuberance, now we allow companies to revalue them based on their own feelings about it since the market is bad? This is akin to changing your residence from Wonderland to Hogwarts – either way, you're still in fantasyland.

Besides, the implication of suspending mark to market is that the market is wrong. Blasphemy!
 

Bart,

I find your reasoning unconvincing, and I've seen your past efforts. They're also unconvincing. Nerpzillicus's remarks are to the point of my doubts.

As to your request for an explanation from me, I never said my assertions were correct, I just said that I didn't see why they couldn't be justified at least as easily as yours.
 

nerpzillicus said...

The government did not force the originators to make the loans, nor did they force the banks to purchase the securities.

The banks are hardly blameless in making the loans. However, the Clinton administration repeatedly sued lenders for declining to make loans to non-creditworthy minorities while Freddie and Fannie were purchasing mortgages from banks based on dramatically lowered lending standards. The banks went along with the government. During the Bush Administration, congressional Dems famously blocked bills meant to reform Freddie and Fannie.

Most of the bad loans were originated by entities that were not regulated by the federal government. (Sub-prime and Alt-A)

Freddie, Fannie and the Fed were pushing the subprime market.

BTW, almost no one supports mark to market (MTM) anymore. What MTM did to the accounting of the real estate collateral at issue was compel the banks to value the property at bubble prices during the bubble build up and then at zero when the bubble burst. This property was never worth either the inflated bubble price or nothing at all. Thus, MTM ensures that the books will be inaccurate. More importantly, MTM falsely indicated that hundreds of billions in bank real estate assets were worthless and nearly destroyed the banking sector.
 

Thank you, Nerpzillicus, you have restated with commendable succinctness the points which have been made to LSR Bart on previous threads.

In particular, I would emphasis the nefarious role of inadequately regulated mortage intermediaries. When you have salesmen who are remunerated largely by reference to the commissions earned, who can so easily encourage would-be borrowers to mis-state their earnings, gloss over the variable interest rate provisions after the "introductory period", fail to give best advice but push only the products which provide the best commissions, then the consequence is inevitable. We had it in the UK in the 1970's and it had to be solved by imposing draconian and heavily policed regulation on the intermediaries.

Securitisation compounded the problem 1,000 fold, because the derivatives market has been wholly unregulated. The adding of various default guarantees to enable these dubious packages to be marketed, has drawn in other players (eg AIG) and it may take years to unscramble who owes what to whom. So these assets have had to be written down in the books of the banks holding them, thus blocking their ability to lend within prudential limits.

Securitised products destroy the borrower-lender relationship -as the Congress has now discovered. Because the ownership of the various tranches of a given mortage is uncertain, the agent managing the relationship with the debtor is unable to negotiate with the debtor but must simply enforce the security in accordance with its terms.

LSR Bart's hissy-fit is worrying. He wrote:-

"I gave you my reasoning and have provided several links in past discussions of this. I have to get back to work. Go on google and find your own links. This is well reported."

The poor, poor clients! If LSR Bart's work product is to be measured by his contributions here, perhaps there is room for a tad more regulation of the provision of legal services to unsuspecting members of the public.
 

Pile'O'Crap:

BTW, almost no one supports mark to market (MTM) anymore. What MTM did to the accounting of the real estate collateral at issue was compel the banks to value the property at bubble prices during the bubble build up and then at zero when the bubble burst. This property was never worth either the inflated bubble price or nothing at all...

Nonsense. There is no "mark-to-market" requirement that property be valued at nothing. OTOH, the constructed bundled securities may well be worth nothing, if marker downturns exceed the margin (leverage) of the security. You get greedy with highly leveraged securities, you can get burned. You may lose everything. For the mortgagee, they may lose all their own equity (and thus have nothing more to lose from walking away). And they can see this from home prices at that moment, or from what they expect the home to be worth if they keep it; they are under no requirement to use "mark to market", "mark to model" or "wishful thinking" in their own decisions. If they decide to walk, the bank/mortgage holder ends up eating the loss (which may be exacerbated by a housing downturn, where foreclosures cause a spiraling of prices downward). The MBSs and derivate CDSs get hurt when such losses occur, but moreso when their (leveraged) value gets hit by a margin call. That can cause insolvency of those holding not the mortgages (which were "leveraged" under normal situations by the equity the mortgagee put up), but those holding the derivates. It is the valuation of the derivatives that is at stake, and when it is the major banks that are holding these derivatives, then it is they that fail because no one wants to buy them. Were they valued at "mark-to-market" with proper margins, they could have been liquidated before disaster set in, saving the big banks from becoming insolvent.

...Thus, MTM ensures that the books will be inaccurate....

BS. MTM (along with proper margins) ensures solvency (as long as people pay attention and sell before they lose everything).

... More importantly, MTM falsely indicated that hundreds of billions in bank real estate assets were worthless and nearly destroyed the banking sector.

It wasn't the real-estate assets that became junk (even though devalued). It was the derivatives.

Mark-to-Market is perfectly reasonable to ensure solvency (which is why they instituted it).

Cheers,
 

Another Pile'O'Crap:

However, the Clinton administration repeatedly sued lenders for declining to make loans to non-creditworthy minorities

Not true.

Cheers,
 

Mr. DePalma,


The government did not force the originators to make the loans, nor did they force the banks to purchase the securities.

The banks are hardly blameless in making the loans. However, the Clinton administration repeatedly sued lenders for declining to make loans to non-creditworthy minorities while Freddie and Fannie were purchasing mortgages from banks based on dramatically lowered lending standards. The banks went along with the government. During the Bush Administration, congressional Dems famously blocked bills meant to reform Freddie and Fannie.


ugh. No, this is factually false. Only banks and thrifts are covered by the CRA. CRA-covered institutions were less likely to make subprime loans (only 20–25% of all subprime loans), and when they did the interest rates were lower. The banks were half as likely to resell the loans to other parties. See http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf

For instance:

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.


* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.


* Only one of the top 25 subprime lenders in 2006 was directly subject to the CRA

It is the non-CRA regulated entities that made loans to poor credit borrowers, disavowing good business practices. CRA lending is profitable and low on defaults. The unregulated, private markets created this mess. Saying something over and over again does not make it true.



The government encouraged banks to invest in low to moderate neighborhoods, while still maintaining good business practices.

And the regulations the Republicans wanted to pass were directed at accounting practices at Fannie and Freddie. Good idea and all, but has absolutely no relationship to the issues at hand. The real problem with Fannie and Freddie was that they were trying to please investors at all costs, and meanwhile paying themselves a king's ransom. Much like Enron.


Most of the bad loans were originated by entities that were not regulated by the federal government. (Sub-prime and Alt-A)

Freddie, Fannie and the Fed were pushing the subprime market.


Chicken and egg, again. The banks were pushing Fannie and Freddie to invest in the sub-primes and Alt-a's, so they would have more cash on hand to make loans. but Fannie and Freddy didn't issue the loans. Fannie and Freddie's private sector managers decided to start investing in the sub primes, and if Fannie and Freddy would buy, charlatans would originate and package more. But this was Fannie and Freddie's private wing trying to make an extra buck, not the government forcing anyone to originate.

Moreover, Fannie and Freddie were late to the party anyway. Foolish people had already been securitizing and packaging the garbage long before the GSEs came in.

Fannie and Freddie are no different than Chase or Citibank in this situation. The real causes, Countrywide, et al, are already gone.

BTW, almost no one supports mark to market (MTM) anymore. What MTM did to the accounting of the real estate collateral at issue was compel the banks to value the property at bubble prices during the bubble build up and then at zero when the bubble burst. This property was never worth either the inflated bubble price or nothing at all. Thus, MTM ensures that the books will be inaccurate. More importantly, MTM falsely indicated that hundreds of billions in bank real estate assets were worthless and nearly destroyed the banking sector.

MTM correctly values the securities as worthless on the open market. This really isn't that complicated. If I loan ten people $100 bucks each, at 5%, then they pay me some fixed amount back (let's say ten years). without compounding interest, the full realized value of the loans should be $1000 principal + 10 years * $5 a year * 10 persons = $1500. but if i have one default, the cash flow significantly drops, probably below the original par value of the securitized cash flow, and poof! worthless. (9 * 100 + 9 * 5 * 10 years = 1350. if i had this booked at $1400 or $1500, i'm in big trouble. (simplified math, please no haters). of course, what's supposed to make these things great is they are backed by houses, so i can recover from defaults. except that's the real problem (i know, like my sixth "Real problem") - home values went down! now the asset is worthless, because the return from good loans can't make up for the loss from the defaulting portion.

Either you trust the market or you don't. These things are worth exactly what MTM is saying they are. If housing prices had continued to go up, the MDS would be worth a lot. That's actually the variable that caused the mess. Any rational person should have foreseen the market growth was unsustainable. But they drank the kool-aid, anyway. How many times did I read (mostly from conservative quarters) that there was no housing bubble? Greed blinded common sense and moderation.

And find me some respectable economist who doesn't support MTM. Other than a faction who do support temporary suspension due to the crisis (a bad idea, but a debatable issue), no one wants to get rid of mark to market. Most dogmatic economists will shutter at the thought, because, as I said before, disbelief in mark to market necessarily implies markets don't work. This makes free market evangelism difficult.
 

The solution to the base problem is to set a minimum creditworthiness standard for mortgage lending

That's regulation, Bart.

The solution to problem one is indeed further deregulation to get the government out of the business of pushing loans to the non-credit worthy.

!

The governments role in "pushing" bad loans was dwarfed by the irrational exuberance of free market actors.

The solution to the secondary derivatives problem is to set regulations to clarify what assets are covered by these instruments or outlaw them outright.

That's regulation.

The lesson is pretty clear. Get back to conservative first principles, rally the GOP base and build outwards.

Bart, if your opinions weren't so scrambled you might have a claim to 'principles.'
 

Once again the thread has been hijacked by Mr. DePalma and people who can't resist going after him. I do want to respond to Brett. It is an "actual" summit only inasmuch as those in attendance will obviously be the highest officials of their respective countries. True enough. But "purported" is actually the correct word if one wants to refer to more than this mere formality. No decisions of any importance can possibly take place because the person representing the USA has no political authority whatsoever to bind the United States to any agreement. And everybody in the entire world knows that. This is one of the reasons that world leaders are making desperate attempts to talk to the President-elect, because he is in fact the person they need to talk to and not the pathetic Wizard-of-Oz who will occupy the White House for another 62 days or so.
 

Sandy,

What would be the characteristics of a more efficient alternative?

1. The incoming President would need to set the date of the transfer. Any time after the election when it was clear who the incoming President was would be good. Clearly there would have to be a maximum time so that the incumbent could not delay the transfer. But

2. How long would it take for the incoming President to be prepared for a transition? All potentially viable candidates would have to have a transition team in place and ready to go before the election.

This would also put a real strain on the incumbent President. It would also be newsworthy in ways that effected the election itself. Would it in fact lead to a shadow government?

That would without doubt increase the power of the party administration structures.
 

While I'm a supporter of moving up the transition date, I do think there may be some adverse consequences. One of the downsides to forcing candidates to have a team in effect before the election is that it may lead to caution. It would be easier to run as a candidate with safe choices for the major positions.

I'm inclined to think that Richard is therefore right that the change would increase the power of party administrative structures. That's the only way a candidate could maintain harmony in the party -- all party interests would want representation.
 

I think Professor Levinson may be wrong in this particular instance. At this summit, a process of reform is likely to be put in motion. The Breton Woods agreements took two years to negotiate. Reform might well take a year.

During that time, the heads of state and government at the table will undoubtedly change in more than one country.

The big difference between the USA and the others is not the fact that here will be changes at the head of the different governments but that the "victor takes the spoils" system means that there will be far more changes at lower levels in delegations.

No European head of government gets to appoint as many people at all levels as a a US President does. There is far more continuity in the public service.

I wonder if a charge to increase the number of career appointments in the public service and reduce the number of those who serve at the pleasure of the President might not be a reform which would not require a change in the US Constitution.

There are rumours that the President-elect is to reduce the number of political reward ambassadorships which I suppose would be a step in the right direction. Having more professionals at the top levels of the diplomatic service might result in an improvement in the efficacy of the diplomatic service - less fog in Foggy Bottom.
 

Can we anticipate little Lisa's bro pulling a "Goofball NYTimes" a la Tommy Friedman here at Balkinization:

http://goofball.nytimes-se.com/2009/07/04/the-end-of-the-experts/

but long before July 4, 2009?
 

Perhap this summit may be a first step in an international Chapter 11 on globalization. Concerns with zero sum game may extend the process even beyond Breton Woods' two years since the U.S. has contributed significantly to the problems to be addressed. (My mother used to say, when I got sick as a child, it takes 40 days to get sick and 40 days to get better. Mom's patience is necessary.)
 

Can we anticipate little Lisa's bro pulling a "Goofball NYTimes" a la Tommy Friedman here at Balkinization:

http://goofball.nytimes-se.com/2009/07/04/the-end-of-the-experts/

but long before July 4, 2009?

# posted by Shag from Brookline : 6:04 AM


Heh... Actually, Baghdad Bart just posted an entry in his goofball blog which insists that there really was a connection between Al Qaeda and Iraq. He reminds me of a crazy homeless guy screaming gibberish at people who walk by him.
 

I wonder if a charge to increase the number of career appointments in the public service and reduce the number of those who serve at the pleasure of the President might not be a reform which would not require a change in the US Constitution.

Fortunately, it would not. Congress can change that by statute under Art. II, Sec. 2, cl. 2, under which the President "shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments."
 

Sandy:

No decisions of any importance would have occurred at this summit even if Mr. Obama automatically assumed office. Mr. Obama has has no cabinet and, as his press conference demonstrated, no idea yet how he wants to proceed. This summit is pure political CYA to make the world's politicians look like they are doing something.

What we really need now is some confidence building measures out of Mr. Obama, which is actually Mr. Hope and Change's forte.

Outside of the credit market, this is really quite a mild recession. The EU GDP dropped only 0.2% in each of the last two quarters and our GDP dropped only 0.3% last quarter.

The fundamentals of the economy outside of housing and the credit markets are sound. The credit markets are bouncing back and housing will eventually follow.

However, in order to drum up political support for the bank rescue, the government has scared the bejeezus out of the markets. Mr. Obama needs to get on the soap box with a variation of the "there is nothing to fear, but fear itself" theme, assure the markets that there is not a raft of anti-business tax increases and legislation headed their way, and encourage the money sitting on the sidelines to get back into the markets.

Yesterday's bounce shows that the sidelines money is just dying to buy up the bargains on the market right now, but they are afraid of the other shoe dropping of they do. It is time for Obama to start spreading some of that hope where it counts.
 

richard wrote:
2. How long would it take for the incoming President to be prepared for a transition? All potentially viable candidates would have to have a transition team in place and ready to go before the election.

This would also put a real strain on the incumbent President. It would also be newsworthy in ways that effected the election itself. Would it in fact lead to a shadow government?

It might also lead to a more public viewing of presidential picks, if they are set earlier in the election process. That might not be a bad thing.
 

Mourad:

I wonder if a charge to increase the number of career appointments in the public service and reduce the number of those who serve at the pleasure of the President might not be a reform which would not require a change in the US Constitution.

It's entirely up to Congress (and requires no Constitutional amendment) to decide what the officers are in the executive, and who will select them:

Article II, Section 2:

"Section 2. The President shall be commander in chief of the Army and Navy of the United States, and of the militia of the several states, when called into the actual service of the United States; he may require the opinion, in writing, of the principal officer in each of the executive departments, upon any subject relating to the duties of their respective offices, and he shall have power to grant reprieves and pardons for offenses against the United States, except in cases of impeachment.

"He shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments."

Cheers,
 

Thank you Arne & Mark, I thought that was the case - no constitutional change - but legislation needed. Thus if it were desirable to reduce the length of the transition, one possible change would be to look at increasing the number and rank of career civil servants - possibly with each Cabinet Department having (as we do in the UK) a political Secretary of State with an opposite number in the career service known as the Permanent Secretary (see Yes Minister - How's the Environment? for a spoof on two such chatting at Cocent Garden to fix a planning enquiry.

Our Prime Minister has at the moment, 23 Cabinet Ministers, 30 Ministers of State (one level down), 42, junior ministers (two layers down) and 27 Whips (in Parliament keeping the majority safe) plus 3 law officers (Attorney General's office) making 125 in total plus about a hundred assorted political advisers which is rather less than the number of players the US President has to find to complete his team.
 

I think part of the reason for a lengthy transition has to with appointing cabinet officers. In the UK, as I understand it, cabinet members retain their seats in Parliament.

Not so in the US. It is hard to imagine a Presdiential candidate announcing, during the campaign, that if elected he will appoint Senator X or Governor Y to some post if X or Y is also running for re-election. So these sorts of things need to be done after the election.
 

Bernard:

Not so in the US. It is hard to imagine a Presdiential candidate announcing, during the campaign, that if elected he will appoint Senator X or Governor Y to some post if X or Y is also running for re-election. So these sorts of things need to be done after the election.

Actually, this may be illegal (promising an appointment prior to election).

Cheers,
 

Even in the UK, the prospective PM's do not announce their choices for the Ministry until after the election when (i) they have been appointed by the Queen and (9) she has approved the PM's choices. But Cabinet appointments are usually announced the day after the new PM has been to the Queen and the balance of the ministry within days.

The French had a useful idea - if a minister is appointed from within the parliament, a deputy sits in parliament for so long as the minister is in office and then hands the seat back when the minister resigns or is sacked or whatever.

Sounds like you have some similar legislation to ours re corrupt electoral practices. Ours actually prohibits a candidate from even buying a potential constitutent a drink during the campaign - a practice known as "treating" - under Section 114 Representation of the People Act 1983 - a person is guilty of the offence if "if either before, during or after an election he directly or indirectly gives or provides (or pays wholly or in part the expense of giving or providing) any food, drink, entertainment or provision in order to influence any voter to vote or refrain from voting."

A year in clink for giving away a pint of lager - pretty draconian.
 

A year in clink for giving away a pint of lager - pretty draconian.

Maybe if it were a cask of Amontillado...
 

No one has taken a crack at transition language that might be considered for a constitutional amendment on this thread, or perhaps elsewhere, to assure the perfect transition (however that might be defined). I'm not about to. But if there were such an amendment, wouldn't much of the campaigning be taken up by addressing specifics of the transition proposed by the candidates if successful? Might that make the campaign even longer? And wouldn't such an amendment have to consider a Gore v. Bush scenario, e.g., law suits? Instant coffee doesn't taste as good as coffee properly brewed.

Any volunteers?
 

If I thought it would make the campaign longer, I'd oppose it. I don't really see how the campaign could get any longer than it is now.

As for a Bush v. Gore scenario, that's a function of the EC. If we abolish that -- which we should anyway -- the odds of needing a 50 state recount are pretty slim. In addition, better voting procedures (scantrons with a paper trail) would make the recount relatively easy.
 

"In addition, better voting procedures (scantrons with a paper trail) would make the recount relatively easy."

A week ago, before the news out of Minnesota of ballots being found in the trunks of cars, and being counted, (Aren't there any chain of custody requirements???) I'd have said the same myself. The Scantron system is the best one out there, I agree, but no system can work if the people running it don't want it to.

We really, seriously need an end to partisan election administration in this country. There are third world nations that run cleaner elections than the US, and that's the chief reason.
 

Brett:

A week ago, before the news out of Minnesota of ballots being found in the trunks of cars, and being counted, (Aren't there any chain of custody requirements???) I'd have said the same myself....

... which was before the news came out that this was all RW Mighty Wurlitzer "talking points" spin to try and delegitimize the recount ala the Rent'A'Thug Brooks Brothers "riot" in Florida....

Please do keep up with your RW "talking points" du jour, Brett. Or stop listening to the likes of InsHannity.

Cheers,
 

Ah, Arne, I understand: Not only do you figure that there aren't any chain of custody requirements for ballots, you figure it's outrageous to even SUGGEST that there's something iffy about turning up a bundle of them in your trunk a week after the election.

I take it that you would be equally unconcerned if a bundle of Coleman ballots were to be found in a closet somewhere, and promptly counted by Republican election officials, regardless of any questions concerning their chain of custody? You'd be totally cool with some hotbed of Republicanism coming up with all sorts of 'corrections' to their initial count, all in Coleman's favor, with an electronic record with the wrong date to back them up?

This is a farce: We need to strip BOTH parties of their local control over election administration.
 

Sure, Brett, you betcha. Keep the parties out of the election process. That means the election would be under the exclusive control of government --- which is under the control of one party.

Nothing could possibly go wrong with that, right?

Oh, and Brett, there are at least three parties in Minnesota politics, so "both" doesn't quite make sense.
 

Ah, Arne, I understand: Not only do you figure that there aren't any chain of custody requirements for ballots, you figure it's outrageous to even SUGGEST that there's something iffy about turning up a bundle of them in your trunk a week after the election.

I believe Arne's point was that the original report was apparently in error; there was no such incident and/or no problem if the incident did occur (which is denied). See here for a full discussion.
 

I very much appreciate the seriousness of the comments on how one might structure a more sensible transition. I think that a number of the cautionary notes are quite correct. You may recall that one of the reasons I advocate a convention is precisely so there can be a systematic discussion of the points that have been raised. I am not certain myself what the "best" inauguration day would be, given that all suggestions, ranging from the day after to the original date of March 4, have problems. I have become convinced that January 20 is just too long, in the modern world where time has speeded up. Also, as I've noted before, the closer one gets to election day, the more one has to dispense with the electoral college. I am obviously glad to do so, but it strikes me that those who want to keep the EC might move up inauguration day if, for example, we moved up the date of the EC gatherings to, say, November 20th or so. What if there re electoral vote deadlocks? The best solution is to change the 20th Amendment and have the newly elected members of Congress take their seats on the 20th also. This would have the advantage of basically eliinating lame-duck sessions, which itself would be a good thing.
 

Why do we need an Electoral College gathering at all? Even with the electoral vote system, it strikes me as nothing but an opportunity for mischief, not to mention a waste of time and money, to have actual electors. Why can't we just tally the electoral votes automatically?
 

Suppose a president-elect were to die before the EC voted. If the EC votes were allocated automatically, a dead person would be certified to Congress as the President. If the EC actually met, though, the electors could solve this problem by casting their votes for a live candidate (presumably the VP on the winning ticket).

This seems preferable to certifying a dead person, since that situation is not provided for in the Constitution and could trigger a crisis. For example, Congress is supposed to certify the "person" receiving the majority of EC votes as the President. Maybe "person" means "person alive at the time the EC voted", but maybe it means "person alive when Congress meets". In the latter case, Congress would be forced to declare the losing candidate as the new president (I'm leaving out some steps here). And believe me, people would argue this.*

*There's a way to guard against this. A single elector for the winner could cast a vote for the VP candidate instead. If that happened, the election would go to the House, which could then vote for the winning VP or the losing presidential candidate.

We should eliminate the EC just to avoid these games. And we need an amendment to govern the situation when a president-elect dies.
 

Mark raises interesting points (and I am sure there are others) that might be addressed by amendments. But what of the rights of the people who voted for the President-elect and his VP-elect? If Congress were to make the choice, might there be a requirement for a prompt new election so the people can be heard directly rather than through Congress? Might such amendments become targets on the backs of the President- and VP-elect?
 

Brett:

Ah, Arne, I understand: Not only do you figure that there aren't any chain of custody requirements for ballots, you figure it's outrageous to even SUGGEST that there's something iffy about turning up a bundle of them in your trunk a week after the election.

It ain't true, Brett. Do some research, and stop believing all the crapola the RW Mighty Wurlitzer is spreading.

Cheers,
 

Sandy will be happy to hear Sandra Day O'Connor's comments on C-SPAN's America and the Courts: First, with regard to fixed terms for judges in lieu of life tenure, she asked ironically, "Have you tried to amend the Constitution lately?" Later, in regard to the Electoral College, she described it as a relic of colonial-era transportation and communications limitations that favored small states, and said again that it was hard to amend the Constitution.
 

This comment has been removed by the author.
 

Either Sandy Levinson should post a new column or the thread should continue here with the benefit of Paul Krugman's OpEd in today's (11/21/08) NYTimes headed "The Lame-Duck Economy." Krugman explains for a broad readership Sandy's repeated concerns with what might happen between November 4th and January 20th without focusing on the imperfect Constitution. Krugman does not come out and say it, but clearly the Bush Administration and the GOP are dragging their feet, perhaps to make President Elect Obama's job a lot tougher on January 20th, politics ahead of country. Here's Krugman's closing paragraph:

"But nothing is happening on the policy front that is remotely commensurate with the scale of the economic crisis. And it's scary to think how much more can go wrong before Inauguration Day."

Consider what that strategy did back in 1932 for the Republican Party when Hoover damned-on until March of 1933. And for how long did voters blame the GOP?
 

Jack Balkin has picked up on Paul Krugman's column with his current post. Jack's views differ from Sandy's. The discussion there should be illuminating.
 

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