Why do we need to lead?

First off, many thanks to NKW for permitting this little experiment. I would have made my first post yesterday but I was out of the house all day to, among other things, watch the really excellent, but dark, Swedish detective movie 'The Girl with the Dragon Tattoo.' Highly recommended.

A post by economist Dean Baker with regards to the dialogue over financial regulatory reform caught my eye recently. He criticized NPR for not presenting a free-trading perspective in a recent piece on the concerns of those who worry that increased regulation of financial derivatives will drive that industry abroad:

There is no more reason for people in the United States to be concerned about buying derivatives abroad than we are about buying shoes and clothes from abroad. If other countries choose to attract trade in derivatives with a more poorly regulated financial system -- implicitly having their taxpayers assume the risk of a meltdown (e.g. Iceland) -- then there is no reason that we should not simply buy our derivatives from these countries and concentrate our production on areas in which we enjoy a comparative advantage. NPR should have included the economist's position in this segment.

This insight struck me, partly because the general issue (the value of having a particular financial product brokered or sold domestically) seems to be present in some of NKW's reflections regarding the frequently proposed financial transaction tax (FTT or a 'Robin Hood Tax') and, indeed, in a lot of discussion regarding the impact of financial regulation in a globalized market. This is different than the, question of how much revenue a unilaterally imposed FTT could raise given the likely diversion of that business abroad. This capital flight factor strikes me as more important in setting the level of a FTT than whether or not to impose it; clearly there are reasons why many consumers of financial goods prefer to buy in hubs like London and NYC and there must be some appropriate level of taxation before deadweight losses and lost revenue eliminate those advantages and start to be counterproductive for society. I do not disagree with NKW that global implementation is preferable or that the taxation of financial goods is a complicated and delicate balancing act.

More generally, what Baker has here challenged is the value we as Americans associate with being the leader in the global financial industry, even as this requires taking on higher levels of risk and, potentially, future bailout costs, all despite the fact Americans might regardless benefit from the financial products offered by a foreign market.

The U.S. perception of the value of a strong domestic financial industry is the subject of a recent post by Ezra Klein (himself ruminating on Tyler Cowen's post critiquing the book 13 Bankers) who hypothesizes that the limiting factor in financial regulatory reform is not the partisan disputes going on now but the degree to which the U.S. government believes it needs a powerful Wall Street (in order, according, to Cowen, to maintain the dominance of the dollar and finance U.S. debt)

I am very skeptical of the degree to which regulating derivatives, granting the feds resolution authority and the other main issues addressed in the current financial reform bills will compromise our ability to finance government operations or jeopardize the American economy. I do see, however, that stronger regulation would be figuratively akin to taking away the punch bowl at the Wall Street party at midnight. I wouldn't personally cry much over more staid domestic financial markets- the major effect might just be that a particular, and not terribly vulnerable, portion of the NYC and Chicago labor pool would have to reinvent themselves professionally. Perhaps the societal benefits to being the leader in the world's casino economy outweigh the opportunity costs and the risk or more thorough regulation (like what Canada has) is incompatible with being an economic powerhouse.? I am interested in other people's general thoughts: In a globalized economy need America have the most lively and innovative financial industry in the world in order to maintain our economic position or way of life? Is the cost of doing this taking on the risk of serious future financial crises that require the use of taxpayer money?

One possible objection to Baker's implicit 'export the risk' argument is that the U.S. could end up bearing the burden of offshore financial crises anyway, through IMF bailouts or domestic economic losses, with less control over the consequences.

surprise!

We are going to try something new over the next few weeks on gawking at clouds. My good friend Robe will serve as a visiting guest contributor. I think this will be a really positive experience. You'll get to read more commentary and hear a different point of view from mine. Hopefully, Robe and I will try to engage in public discourse by going back and forth on a few things.

don't worry, chicken curry

I have really enjoyed cooking lately. This is some chicken curry that I made last night.

that karma yoga

Recently, I found myself washing a sink full of dishes for the first time in a long while. Over the past few years, I've grown accustomed to using the dishwasher. So it is that while I will occasionally hand wash a pot or pan after cooking, I load most of my dishes into the dishwasher and press a button. This is easy and it leaves me with time to do other things while the dishes wash. My laundry happens in much the same way. On Saturday mornings, I take my laundry bag out of the closet and walk down the street to the laundromat. I leave my laundry with Ming, leave to do other things (while my clothes are washed and folded), and pick my clothes up a few hours or a day later. When it comes to dishes and laundry, I seem to be coordinating more than doing. I was surprised, then, at how much I enjoyed doing the dishes. I've written before about the ways in which we feel human by doing things, and the extent to which this is lost in an increasingly information-based society. I felt very peaceful doing the dishes. It is one of the few times when I can suspend many of my thoughts and just be in the moment. Friends used to find it funny that I enjoy cleaning the bathroom as much as I do, but it's much the same effect.

Yoga and meditation is in large part about clearing your mind. The cessation of thinking. Stop for a minute and just be. I spend so much time thinking about what comes next, and wondering about big ideas. Meditation requires practice and focus. Perhaps the act of doing something with attention and without analysis begins to approach the same goal. When I am washing dishes, when I am scrubbing a counter, when I am sweeping the floor. These, like an autumn forest, are a chance to be alone with(out) my thoughts.

the story

Call me a retrograde, but I find something very romantic about the idea of traditional journalism. While the world is undoubtedly changing quickly; a friend who is a reporter for Dow Jones tells me that a colleague recently remarked to her that "we are all wire reporters now", alluding to the increasing pace of reporting and publication. Still, the image of a gritty reporter chasing down a story, studying the issues meticulously, and reporting with an active sense of professional pride has salience to me. I read something recently espousing the idea that there is a sort of heroism in the notion that reporters do not merely report facts. In being physically present where the stories happen, they testify to the experience. This grants their reporting a special sort of credibility. We used to demand that our journalists not just know about something, but that they know something. Do we still?

This afternoon, I met a journalist from Mexico City named Jose, and we spoke about the notion of journalism as a craft. While this may seem obvious, it occurs to me that we sometimes lose sight of the extent to which the quality of writing matters. Much of this, it seems, has been supplanted with breaking news alerts, tweets, and the like. While I don't mean to suggest that carefully written stories have disappeared (they haven't), I do think we're paying less attention to them. Publications like the New Yorker help to remind us that writing can, and should be taken seriously.

One story that shocked me with its power is Fatal Distraction, for which Gene Weingarten was awarded a Pulitzer Prize last week. In it, he writes about parents who have accidentally killed their children by forgetting them in locked cars. This is profoundly tragic when it happens, and Weingarten handles the narratives with a stunning amount of sensitivity and grace. The story really sheds new light, emotionally and factually, on this occurrence. Outrage is easy, but Weingarten upends that automatic response and challenges us to engage with the issue in ways that may be uncomfortable. Simply, this is beautiful and moving writing. I really urge everybody to read it.

don't call it a comeback

oof
snarf
erm

*back*