links for 2008-07-13

• Follow the Malek - Paul Krugman Blog
• How Your Brain Can Control Time - Discover
• In Darwin’s Place - Project Syndicate
• Taking Down a Pro-Tax-Cut Straw Man - Exuberant Rationality
• I was going to say this, but... (Fannie/Freddie) - Richard Green
• US Treasury rescue for Fannie Mae and Freddie Mac - Brad DeLong
• Fannie Mae and Freddie Mac - Econbrowser
• Fannie Mae and Freddie Mac — Androgynous Financiers - michaelcarliner.com
• What Would a Fannie/Freddie Conservatorship Look Like? - Credit Slips
• Overstating Our Fears (terrorism) - washingtonpost.com

Comments

[anne]

http://www.nytimes.com/2008/07/13/opinion/13sun1.html?ref=opinion&pagewanted=print

July 13, 2008

Posturing and Abdication

The Bush administration made clear on Friday that it will do virtually nothing to regulate the greenhouse gases that cause global warming. With no shame and no apology, it stuck a thumb in the eye of the Supreme Court, repudiated its own scientists and exposed the hollowness of Mr. Bush's claims to have seen the light on climate change.

That is the import of an announcement by Stephen Johnson, the administrator of the Environmental Protection Agency, that the E.P.A. will continue to delay a decision on whether global warming threatens human health and welfare and requires regulations to address it. Mr. Johnson said his agency would seek further public comment on the matter, a process that will almost certainly stretch beyond the end of Mr. Bush's term.

The urgent problem of global warming demands urgent action. And the Supreme Court surely expected a speedier response when — 15 months ago — it ordered the E.P.A. to determine whether greenhouse gas pollution from vehicles (and, by extension, other sources) endangers human welfare and, if so, to issue regulations to limit emissions.

Mr. Bush initially promised to comply, and last December, a task force of agency scientists concluded that emissions do indeed endanger public welfare, that the E.P.A. is required to issue regulations, and that while remedial action could cost industry billions of dollars, the public welfare and the economy as a whole will benefit.

The agency sent its findings to the White House. The details of what happened next are not clear. But investigations by Senator Barbara Boxer and Representative Edward Markey have established that the White House, prodded by Vice President Dick Cheney's office, decided to ignore the findings — refusing at first to even open the e-mail containing them and then asking Mr. Johnson to devise another response that would relieve the administration of taking prompt action.

Along the way, the administration engaged in what Senator Boxer has aptly called a "master plan" to ensure that the E.P.A.'s response to the Supreme Court's decision would be as weak as possible.

This campaign of obfuscation and intimidation included doctoring Congressional testimony on the health effects of climate change; ordering the E.P.A. to recompute its numbers to minimize the economic benefits of curbing carbon dioxide; and promoting the fiction that the modest fuel-economy improvements in last year's energy bill would solve the problem of carbon dioxide emissions from automobiles.

All this is unfortunate but not surprising. Mr. Bush spent years denying there was a climate change problem. And while he no longer denies the science, he still insists on putting the concerns of industry over the needs of the planet.

We were skeptical last week when Mr. Bush joined other world leaders in a pledge to halve global greenhouse gas emissions by the middle of the century. We worried that without nearer-term targets there would be too little pressure on governments to act. Now we have no doubt that he was merely posturing....

[elvis]

Overstating our Fears....

every time I hear about "extremism" and "terrorists" I just want to vomit.

I've got plenty to be afraid of: my wife, my children, their boyfriends....

I've never even met a terrorist. Unless you count the cute girl in the "get the U.S. outta Nicaragua" march in '85. And for the record I never joined that group officially.

I have--and continue--to meet my wife and family on a regular basis and statistically I much more likely to be physically injured by them or winged insects than by any dark-skinned foreign-language babbling terrorist. Maybe if we learned their language they wouldn't be so terrifying? Just annoying? Are there "annoyists"? I think I have some at the office.

You'd think with all these terrorists running around, there'd be some shops catering to their needs. "This latest bomb-vest really hilites your figure". But perhaps there wouldn't be many repeat customers in the suicide-bombing group. Customer-loyalty has its limits.

every time I hear "extremists" and "terrorists" I just want to vomit, red white and blue.

[Bruce Wilder]

There's lots of obsession with Fannie and Freddie, but it seems to me that most of the commentators don't, yet, have the first clue about the nature of the problem, or the likely course of events.

Fannie and Freddie are not in any great danger of bankruptcy or liquidation. That's not their problem. The problem is that they are now in a position, without the capital, in either market share price or on the books, to continue operating normally, supporting the regular creation of of new mortgages. If the mortgage market were to seize, we would have the mother of all credit crunches, and a partial, but extensive collapse of the banking system.

So, of course, Paulson is acting quickly. Duh.

For ideological reasons, Paulson will not support nationalization, per se, but an injection of government funds will make the Federal government the super-dominant equity holder and effective owner of the GSEs.

Contra Brad DeLong, the moral hazard problem is extreme. The GSE's, like the financial industry in general, suffered from executive overcompensation on a grand scale, which corrupted them.

Paulson is the first champion of executive overcompensation. Don't expect him to do anything about it.

[save_the_rustbelt]

I was listening to Wolf Blitzer while I cooked brunch, and I would swear I heard Senator Dodd say that Fannie and Freddie are solvent and in good shape (?).

Was the sound of bacon popping ruining my hearing, or have I missed something?

[Bruce Wilder]

And, don't expect Paulson's failure to do anything about executive overcompensation, or any other moral hazard consideration, to attract any notice from Brad DeLong.

[anne]

http://www.nytimes.com/2008/07/14/world/asia/14afghan.html?hp&pagewanted=print

July 14, 2008

9 U.S. Soldiers Killed in Attack in Afghanistan
By CARLOTTA GALL

Taliban insurgents mounted a large attack on an American base in eastern Afghanistan, killing nine U.S. soldiers in a fierce battle that lasted for hours.

[anne]

http://www.nytimes.com/2008/07/14/washington/14fannieweb.html?hp&pagewanted=print

July 14, 2008

Rescue Sought for Fannie and Freddie: White House Will Ask for Authority to Buy Stock
By STEPHEN LABATON

Announcement of the plan was intended to send a signal that the government was standing behind the beleaguered mortgage companies.