markets just keep emerging

31 March 2009

From that much-recommended Simon Johnson article on the financial crisis:

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

It just so happens that I’ve been digging around a bit in the 1900s (the “aughts”, I guess). Here’s how Michael McGerr describes the events of 1907 in A Fierce Discontent: The Rise and Fall of the Progressive Movement in America, 1870-1920, pages 178-180. I’ve decided to quote extensively more than paraphrase since McGerr lays it out quite nicely and the details are important:

In October, a worldwide shortage of credit mercilessly exposed the limitations of the nation’s banking and currency systems. A collapse of copper prices raised fears about banks and trust companies heavily involved in the mining industry. On October 22, frightened depositors made a run on the Knickerbocker Trust Company, which had extensive involvement with copper: the company closed the next day. The terror spread… As the banks and trust companies of New York struggled to meet their obligations, the whole banking system of the country seemed suddenly in peril. Morgan, Stillman, and the rest of the great money men labored to hold things together. John D. Rockefeller publicly pledged half his possessions to the cause. With millions of Rockefeller’s dollars on deposit, the National City Bank played a key role in the crisis. “They always come to Uncle John when there is trouble,” Rockefeller bragged. Even so, the federal government had to step in. Roosevelt’s secretary of the treasury, George Cortelyou, provided the banks with $37 million and then $31 million. Still the run continued; the banks stopped payments to depositors….

As the Panic entered a second week and the Trust Company of America became the focus of worry, Roosevelt was drawn into a dubious deal. The money to save the company would have to come from the financial markets, but they were supposedly jeopardized by the weakness of Moore and Schley, a firm of underwriters. The fate of Moore and Schley, in turn, depended on the sale of its shares in the Tennessee Coal and Iron Company. With money from those shares, Moore and Schley would survive, the stock market would stay high, and firms could then afford to put up the money to save the Trust Company of America. But who would buy the shares in Tennessee Coal and Iron? United States Steel was willing–if the government would agree not to take the acquisition to court under the Sherman Act. The leaders of the steel corporation, Elbridge Gary and Henry Clay Frick, met with the President on November 4 to explain the firm’s noble proposal. They did not dwell on the fact that this bargain-basement acquisition would give United States Steel a powerful hold on the Southern market. Roosevelt indicated he had no objection to the deal, which promptly went forward.

Through November, the government sold bonds to banks on easy terms; thus fortified, the banks rode out the Panic. Confidence returned, the credit shortage diminished, workers kept their jobs–the country seemed fine. Nevertheless, the Panic of 1907 had changed things.

McGerr goes on to point out that while the financiers had found themselves in a weak position, forced to turn to the federal government for help, the resolution of the crisis demonstrated their continuing strength:

The government had had no choice but to help the “financial captains.” Roosevelt had accepted the Tennessee Coal and Iron deal. In November, Elbridge Gary began to bring together the leaders of the steel industry to discuss matters of common concern; Washington tolerated these “Gary dinners,” an open display of anticompetitive collusion. Further, the great industrial firms showed real strength in the uncertain economic climate. Instead of renewing the price-cutting wars of the 1890s, U.S. Steel and other companies maintained their prices after the Panic.

Roosevelt, McGerr writes, responded to the crisis by calling for more regulation, including allowing the federal government to examine corporations’ books and giving the Interstate Commerce Commission the power “to regulate issues of railroad securities, to determine the physical value of railway lines, and even to set railway rates.” None of that happened during his presidency:

Instead, he found himself trapped in an argument about responsibility for the Panic. Opponents claimed that the administration’s program in general and the judgment against Standard Oil in particular had precipitated the crisis. “The runaway policy of the present Administration can have but one result,” John D. Rockefeller told a reporter. “It means disaster to the country, financial depression, and chaos.” Even Americans receptive to antitrust and regulation wondered whether too much government interference inhibited economic growth.

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the structures of archival research

26 March 2009

News of John Hope Franklin’s passing yesterday had me re-reading his 1988 Charles Homer Haskins Lecture (pdf). The Haskins Lectures are supposed to be autobiographical; Franklin’s makes me want to read his memoir. Particularly striking are his memories of doing research under the conditions of segregation:

It was necessary, as a black historian, to have a personal agenda, as well as one dealing with more general matters, that involved a type of activism. I discovered this in the spring of 1939 when I arrived in Raleigh, North Carolina, to do research in the state archives, only to be informed by the director that in planning the building the architects did not anticipate that any Afro-Americans would be doing research there. Perhaps it was the astonishment that the director, a Yale Ph.D. in history, saw in my face that prompted him to make a proposition. If I would wait a week he would make some arrangements. When I remained silent, registering a profound disbelief, he cut the time in half. I waited from Monday to Thursday, and upon my return to the archives I was escorted to a small room outfitted with a table and chair which was to be my private office for the next four years. (I hasten to explain that it did not take four years to complete my dissertation. I completed it the following year, but continued to do research there as long as I was teaching at St. Augustine’s College.) The director also presented me with keys to the manuscript collection to avoid requiring the white assistants to deliver manuscripts to me. That arrangement lasted only two weeks, when the white researchers, protesting discrimination, demanded keys to the manuscript collection for themselves. Rather than comply with their demands, the director relieved me of my keys and ordered the assistants to serve me.

Nothing illustrated the vagaries of policies and practices of racial segregation better than libraries and archives. In Raleigh alone, there were three different policies: the state library had two tables in the stacks set aside for the regular use of Negro readers; the state supreme court library had no segregation; while, as we have seen, the archives faced the matter as it arose. In Alabama and Tennessee, the state archives did not segregate readers, while Louisiana had a strict policy of excluding would-be Negro readers altogether. In the summer of 1945 I was permitted by the Louisiana director of archives to use the manuscript collection since the library was closed in observance of the victory of the United States over governmental tyranny and racial bigotry in Germany and Japan. As I have said elsewhere, pursuing Southern history was for me a strange career.


laws of science

8 March 2009

Congressional Record, 2 May 2007, 4388-4391:

PARLIAMENTARY INQUIRY

Mr. PRICE of Georgia. Mr. Chairman, I have a parliamentary inquiry.

The Acting CHAIRMAN. The gentleman will state his parliamentary inquiry.

Mr. PRICE of Georgia. Would it have been possible for the Rules Committee to propose a rule to the House to waive the rule under which the Chair has just ruled this amendment out of order?

The Acting CHAIRMAN. The gentleman does not state a parliamentary inquiry. The gentleman’s question is hypothetical.

Mr. PRICE of Georgia. Mr. Chairman, I have a parliamentary inquiry.

The Acting CHAIRMAN. The gentleman from Georgia will state his parliamentary inquiry.

Mr. PRICE of Georgia. Mr. Chairman, isn’t it true that the Rules Committee has the authority to waive the rules under which this House operates so that certain amendments may be brought to the floor?

The Acting CHAIRMAN. The Chairman of the Committee of the Whole can only comment on the rule in operation for this bill.

Mr. PRICE of Georgia. I thank the Chair.

AMENDMENT NO. 5 OFFERED BY MR. CAMPBELL OF CALIFORNIA

Mr. CAMPBELL of California. Mr. Chairman, I offer an amendment.

The Acting CHAIRMAN. The Clerk will designate the amendment.

The text of the amendment is as follows:

Amendment No. 5 offered by Mr. Campbell of California:

At the end of section 3, insert the following new subsection:

(h) Limitation.–None of the funds authorized under this section may be used for research related to–

(1) archives of Andean Knotted-String Records;

(2) the accuracy in the cross-cultural understanding of others’ emotions;

(3) bison hunting on the late prehistoric Great Plains;

(4) team versus individual play;

(5) sexual politics of waste in Dakar, Senegal;

(6) social relationships and reproductive strategies of Phayre’s Leaf Monkeys; and

(7) cognitive model of superstitious belief.

Mr. CAMPBELL of California. Mr. Chairman, we have a budget problem here in Washington, the Federal Government. The budget that was recently passed off of this floor has a deficit in it, continues that deficit for the next 4 years. It has a tax increase in it, the largest tax increase in American history, going forward. And it also continues to raid the Social Security funds, take the Social Security surplus that we have and spend it on things that are unrelated to Social Security. So we have a budget crisis going on.

What this amendment does is it says that there are certain things upon which we should not be spending money through this bill during this time of budget deficits, stealing Social Security funds, and increasing taxes.

What this amendment does, it says there’s just a couple of things that we should not be increasing the deficit by spending money on, and I quote, “The Archives of Andean Knotted-String Records,” or to study “The Accuracy in Cross-Cultural Understanding of Others’ Emotions.”

This amendment also says that we don’t want to increase spending and, therefore, increase taxes in order to pay for a study of “Bison Hunting on the Late Prehistoric Great Plains” or “Team Versus Individual Play” or “The Sexual Politics of Waste in Dakar.”

And it also says that we don’t want to increase spending and spend any of this money in this authorization and, thereby, be continuing to raid the Social Security Trust Funds in order to study “The Social Relationships and Reproductive Strategies of Phayre’s Leaf Monkeys” or “The Cognitive Model of Superstitious Belief.”

Now, Mr. Chairman, I understand that there is a process of peer review from which these studies come in the National Science Foundation, and that’s all well and good. But our job here is we are the elected representatives and stewards of the taxpayers’ money, not the academics in the National Science Foundation, and it is our decision whether or not we wish to spend taxpayers’ funds on studies of the social relationships and reproductive strategies of Phayre’s leaf monkeys or on bison hunting on the late prehistoric Great Plains. I think we should not do that.

I am sure that some believe that these are very fine academic studies. That’s excellent. Within the realms of academic halls, they may think a number of things are fine academic studies. That’s not the question.

The question before us is, do these things rise to the standard of requiring expenditures of taxpayer funds in a time of deficits, proposed tax increases and raiding Social Security funds? I think the answer is a resounding no. I think the answer should be a resounding no, which means that I would hope that the vote on this amendment would be an equally resounding yes.

Mr. BAIRD. Mr. Chairman, I move to strike the last word.

I appreciate the gentleman’s comments about the budget deficit, and I would first suggest that the deficit rose to historic levels under the leadership of the former majority party, largest deficits in the history of this country, indeed, were accrued with President Bush and the former majority.

Looking to these studies, some of which are $10,000, now absolutely we must make sure that we spend all the taxpayer dollars wisely. But let me just share with you what the American Association for Advancement of Science, probably the most prestigious scientific body in this country, has said. Prohibiting specific grants sets a dangerous precedent for scientific research that has progressed and advanced for decades through freedom of inquiry into a broad spectrum of subjects. While congressional oversight of Federal programs is, of course, important, second-guessing peer review in this way could compromise the fabric of our public research enterprise one thread at a time. Therefore, we urge you to oppose such amendments.

Similar sentiments have been voiced by the Association of American Universities.

And I would be tempted to ask the gentleman from California, except he’s already stated his piece, why he would be opposing research that has been supported by the United States Army Research Institute; that is seen as critical to the security of our troops serving in Iraq.

Now, my wager is the gentleman’s saying to himself right now, I have no idea what the chairman is speaking about here. And that’s the problem. When you look at a cursory examination of the title, or an abstract, you don’t have an idea. That’s why we have peer review.

Which particular study am I talking about? I’m talking about the Study of the Accuracy of Cross Cultural Understanding of Others’ Emotions. What we are talking about here is if you’re going to be dealing with people from another culture, and you misread their expression of emotions, it can cost you your life, your buddies their life, or the innocent civilians their lives. The U.S. Army Research Institute believes this is important, and they support the basic elements of this kind of study.

I also am not sure, the gentleman seems to suggest, it seems, that we here in the Congress, with a cursory evaluation of the abstracts from studies, should insert ourselves in the peer-review process. I wonder if the gentleman had looked at chemistry research or physics research in the same way, and do we really want to spend this body’s time, and do you, sir, or you, sir, have the expertise to evaluate these studies? That’s why we have a peer-review process. That’s why we have a National Science Foundation. It is why we have a Science Foundation Board to direct us.

I absolutely agree that if taxpayer dollars are going to be spent on research, it is incumbent upon the scientist to do the research well, ethically, responsibly, and that it be relevant. But I do not believe it is the place of either side of this aisle to single out particular studies, as has been done in this case, and presume that with a 5-minute examination we know better than peer reviewers who have the degrees in the relevant fields and have spent years studying them and have evaluated them. That is a dangerous precedent to set, and I would urge strongly opposition to this amendment and a similar one which will emerge shortly for the sake of our soldiers.

Mr. EHLERS. Mr. Chairman, I move to strike the requisite number of words.

These are always very difficult questions, and I have learned long ago never to judge the research by the title of the proposal. These are complex issues, and I don’t know if the gentleman was here earlier when I spoke about the rate of return on research at the National Science Foundation. The best estimate is that the rate of return is a minimum of 20 percent and a maximum 400 percent on individual research projects.

Now, I challenge anyone in this Chamber to find investments that will year after year give you that rate of return on the investment.

Another point I would like to make is, as I said, you can’t always judge the full proposal by the title. This was evident a few years ago when we went through exactly the same charade when discussing the National Science Foundation budget. Some of my colleagues came down to the floor to amend the NSF appropriations bill, and one offered an amendment to remove grants for the study of ATM. This person gave a magnificent speech why we should not spend money at the National Science Foundation or the Department of Energy to study ATM. His argument was, let the banking industry do the research on ATMs. What he didn’t know is that the proposal was not on automatic teller machines but the proposal was on studying asynchronous transfer modes, which involves the way computers talk to each other. This research led to a substantial change in the speed at which computers were able to talk to each other. This is a good example of why it is dangerous to just look at titles and make a judgment.

I would also pick up on the comment of Mr. Baird about cultural studies. I think one of the basic problems in Iraq, and I have told this to people in the White House, is that there were not enough people in the White House, perhaps even in the State Department, who understood the culture of the countries we were dealing with, and we failed to realize what would happen once we moved into that country. A good NSF-funded study beforehand would have been invaluable in determining what would happen.

Another example: a few years ago there was a grant on game theory. Once again, one of our colleagues rushed to the floor and said we have to eliminate funding for that. In fact, game theory is extremely useful in calculating the operation of nuclear reactors.

So I urge defeat of this amendment. It is very easy to sit on the House floor and pontificate about these issues. But if we are going to cut the budget, there are much more fertile fields in which to cut. Why would we cut the one agency that gives us a guaranteed rate of return on our investment when there are many other areas we can cut where we are getting little or no payback at all?

Mr. PRICE of Georgia. Mr. Chairman, I move to strike the last word.

I appreciate the comments of my good friend from Michigan, and I appreciate the comments of my fellow colleague from Washington. And I have been, as a physician, a strong supporter of the National Science Foundation. I believe strongly that, in fact, they need more money, not less. I would argue that we need to prioritize appropriately in our Federal budget and provide much greater resources in the National Science Foundation and the National Institutes of Health and the CDC and others that ultimately work and derive huge benefit to our entire society and, in fact, to the world.

But I commend my good friend from California for bringing this amendment forward because, although I may not have pulled out a couple of the items that he notes, for the life of me, I have a difficult time understanding and appreciating why on earth it would make any sense, and I would ask my good friend from Washington can you fathom how studying bison hunting on the Late Prehistoric Great Plains might have some effect on contemporary society that would make a difference with the compelling argument that you made regarding the study of cross-cultural emotions?

Mr. BAIRD. Mr. Chairman, will the gentleman yield?

Mr. PRICE of Georgia. I would be happy to yield.

Mr. BAIRD. Mr. Chairman, I thank very much the gentleman for yielding. And I would just caution I wouldn’t state “for the life of me” on something that I hadn’t studied very well no matter how obvious it may look.

Mr. PRICE of Georgia. I would be happy to reclaim my time or I would be happy to have you answer the question, one or the other.

Mr. BAIRD. I could answer the question. I am just giving you the caveat about staking your life on things.

Here is the issue: I don’t think we want to say that we should never study the history of things. It is the perspective of this gentleman that we should not study history. And particularly, when you look at bison, I am not an expert in this, but to pretend to be so would be a mistake. To pretend to be so on your side or on my side would be a mistake. The authors of this study have contended that biologists and social scientists have tried to look at how humans make decisions to maximize and minimize risks in different environmental conditions. As you face different food supply systems, how do you deal with that? And that is part of the point here. How did people who live on the plains look at where they were going to harvest bison?

Mr. PRICE of Georgia. Reclaiming my time, Mr. Chairman, I would suggest candidly that it was a valiant attempt. It was truly a valiant attempt, and I appreciate the attempt, to make a justification for bison hunting on the Late Prehistoric Great Plains. I would also suggest that the sexual politics of waste in Dakar, Senegal is a questionable study.

So I commend my good friend from California, and I would be happy to yield to him.

Mr. CAMPBELL of California. Mr. Chairman, I thank the gentleman from Georgia for yielding.

I appreciate the academic arguments, and I understand them. I am a history buff myself. I love this stuff. I might actually love this report, might enjoy reading it, might find it fascinating. That’s not the point. The point is do we want to spend taxpayer funds on this?

The United States taxpayer cannot fund every bit of academic research for every university, for everything that every professor wants to do across this country. We can’t do that. The question before us is, are these the sorts of things we do want to spend taxpayer money on? I would suggest that they are not, and that is why I would suggest that to vote against this amendment is to say that you believe that taxpayer money should be spent on these specific items. That is the question before us. Not whether it is interesting. I am a Civil War buff. I love all kinds of interesting stuff about that, but I don’t think the taxpayer ought to pay for research into it.

Mr. PRICE of Georgia. Mr. Chairman, reclaiming my time, I thank the gentleman for his comments, and I would concur. I think that there are many things that are exciting and interesting to study, whether or not they ought to be priorities at this point, and again, I would point to the bison hunting on the Late Prehistoric Great Plains.

And if my good friend from Michigan would care to make a comment, I would be pleased to yield.

Mr. EHLERS. Mr. Chairman, I thank the gentleman for yielding.

I just want to respond to the statement that we can’t fund every proposal that comes along, and that is absolutely true. The National Science Foundation funds a small fraction of the proposals that come through, and that is why we are beginning to slip as a Nation compared to other nations, because we are simply not, as a Congress, providing sufficient funds for the National Science Foundation. And I forget the current figure, but I think it is in the neighborhood of 20 percent of the grant applications are being funded; 80 percent are not being funded. It’s a tough business, and these are all peer-reviewed grants. I cannot defend them individually without looking at them. As I say, you can’t judge a proposal or a grant by its cover.

Mr. SCOTT of Virginia. Mr. Chairman, I move to strike the last word.

I rise in opposition to the amendment, and I yield to the gentleman from Washington.

Mr. BAIRD. Mr. Chairman, I thank the gentleman from Virginia for yielding.

The challenge here, my friends, is you asked, I think, a question that is just improperly placed. Neither of us is trained in these areas. You are challenging a fundamental tenet of how we do National Science Foundation research. If you truly believe that the most cost-effective use of this body’s time, and that we are qualified to use our time in that fashion, is to, one by one by one, review National Science Foundation grants for our considered and qualified judgment of the appropriateness of those grants, it seems to me that that is a bit of a stretch. It seems to me that you are really making a political statement.

If the political statement you want to make is we should spend the taxpayers’ dollars wisely, I, 100 percent, agree. You may not know it, and probably don’t, that we are working with the National Science Foundation to establish a letter actually that scientists that receive public grants would have to sign saying they understand the money came from the taxpayers, they are committed to doing research that is well designed and ethically high quality and that is relevant.

The problem for us, in this brief time we have here and lacking expertise in the field, is it is really presumptuous of us on either side to say I can either attack or defend. I would yield time to either of you if you want to tell us what your personal qualifications are in the area of expertise of any of these studies, and I will hold you to it. What personal qualifications do you have in the broad area of this study to speak to that study?

Mr. CAMPBELL of California. Mr. Chairman, will the gentleman yield?

Mr. SCOTT of Virginia. I yield to the gentleman from California.

Mr. CAMPBELL of California. We are qualified by virtue of the fact that we have been elected by people in our districts to be stewards of their money. As I said, this is not a question of whether or not these things have academic merit within a field of academics. It is a question of whether they are worthy of spending taxpayer money in that area. I think they are not.

Mr. SCOTT of Virginia. Reclaiming my time, Mr. Chairman, I yield to the gentleman from Washington.

Mr. BAIRD. Let me just share with the gentleman the dangerous path you are on. There was a study some time back dealing with the sex life of the screw worm, perhaps aptly noted. The sex life of the screw worm, that would be pretty tempting to come to the floor and say, by God, why are we spending taxpayer dollars studying the sex life of screw worms? The reason being that that research saved the cattle industry millions of dollars by eliminating a parasite that deposited eggs in the placenta of newborn cows.

We don’t have the knowledge. We are indeed stewards of the taxpayers’ money, which is why we created the National Science Foundation, why we are very careful about designating how the peer-review process works, and, quite frankly, why we shouldn’t mess with that peer-review process. If we truly want to be stewards of the taxpayers’ money, which I believe all of us want to be, then our best approach is to delegate some of the decision making about where some of that money is spent to those who best know the realm in which the research is spent. It is precisely because I believe in the task of being a steward of the taxpayer dollars that I oppose the general purpose of the amendment.

I understand you are trying to save money. I just don’t think our best way to do so is by micromanaging either this or most of the other foundations.

And I thank the gentleman from Virginia for yielding.

Mr. GARRETT of New Jersey. Mr. Chairman, I move to strike the last word.

Just a couple of points and then I will yield.

I agree with the gentleman that in some respects, perhaps, this body should not be engaged in micromanaging various aspects of the Federal Government where we do not have expertise.

Earlier today, and in just the past week, we had a complete debate on that subject of whether this body, all 535 Members, were in appropriate position to micromanage the war, and I think some of us thought that we were not in the best position but that we should have, just as you are suggesting here, the trained professionals, the experts, the people on the field who are engaged in this activity on a daily basis make those decisions.

So I would agree with the gentleman there. And if we were to have consistency, then we should not be engaged in that matter and we should not be engaged in this case.

Let me make my second point and that is this: It is not incumbent upon the gentleman from California to be the expert in these areas that he is raising questions about. The underlying bill is not the gentleman from California’s bill. It is the majority party’s bill. It is your bill. You are coming to the floor making the case, or I should say the other side of the aisle, as I am speaking to the Chair, making the case that we should be spending all this money on these programs. So it is incumbent upon the offerer of the underlying legislation to make the case why we should be doing it and have the information why each one of these is justified so that when either the gentleman from California or Georgia raises the legitimate question, the same question that we are going to get when we go back to our constituents and are asked why did we vote on it, he should be making the justification for that.

With that, I will yield to the gentleman from Georgia.

Mr. PRICE of Georgia. Mr. Chairman, I thank the gentleman from New Jersey for his comments. And he is making a very apt point.

And I appreciate the comments of my good friend from Washington, who said, and I think it got down correctly, “We are neither trained nor have expertise in this area.” And you are absolutely right. But consistency is a wonderful thing and inconsistency is a challenge.

I would suggest that none of us are pure in this area, but my good friend talks about we ought to delegate decisionmaking to authorities who have expertise, and we should. As a physician, I am compelled and have strong affinity for all of the advocacy groups that come to my office, as I know they come to yours, and advocate on behalf of specific diseases. Most recently this week, the folks who have suffered under the scourge of breast cancer have come, and they are asking for more resources. And I always suggest to them that it is appropriate for those decisions to be made by individuals at the National Science Foundation, at the CDC, at the National Institutes of Health. But, in fact, what my good friend from Washington does all the time, in his capacity in Congress, is to determine exactly what that line item ought to be from an appropriations standpoint.

As a physician, the medical profession has suffered under the decisions that have been made in this Chamber and in the Chamber on the other side of this building because individuals thought they had greater expertise in the area of health care. And as my good friend from New Jersey clearly stated, and appropriately stated, that just this week we’ve been dealing with folks who believe they have greater expertise in the area of military competence and battles than our generals on the ground.

So I would suggest, Mr. Chairman, that my good friend from Washington is absolutely correct, that we ought to delegate in certain instances, but we ought to also utilize the prerogative that we have and the responsibility that we have as representatives in this body, representatives of our districts, and make certain that we are good stewards of the taxpayers’ money.

Mr. GARRETT of New Jersey. Mr. Chairman, I yield to the gentleman from Michigan.

Mr. EHLERS. I thank the gentleman for yielding.

First of all, I’ll make a deal with you; I won’t make any judgments about medical research if you don’t make judgments about NSF research.

The point of this really is that you cannot predict what will result from the research; that is the idea behind basic research.

Years ago when I was a graduate student at Berkeley, we were spending tremendous amounts of money to examine the behavior of elementary particles, protons, neutrons, mesons, and so on. And no one, even in the scientific community, could ever imagine any practical use for that. But later on the results from doing that research led to the development of a CAT scanner and the MRI. Now, who would ever have thought that elementary particle physics would lead to major findings in medicine which every doctor relies upon today?

Mr. McNERNEY. Mr. Chairman, I move to strike the last word, and I yield to my good friend and colleague from Washington State (Mr. Baird).

Mr. BAIRD. I thank the gentleman from California. Just a couple of brief comments, and it’s getting late, so we don’t want to carry this forever.

I would suggest that we all agree that consistency is a very dangerous thing. If the gentleman talks about being consistent, I would ask the gentleman why they chose not to micromanage the vast expenditures of dollars, not even to have oversight hearings of the vast expenditure of dollars on the war.

If you really want to save the taxpayer dollars, we are burning $2.5 billion a week in Iraq. This entire bill is $21 billion over 3 years. We’re talking about 3 full years to fund the basic scientific research of this entire Nation, from mathematics to physics to chemistry to social sciences. That’s about 6 or 7 weeks or so of what you spend in Iraq. And yet when it came to oversight of the expenditures in Iraq, the majority, then-majority party was then just virtually silent. If you really want to save the taxpayers’ money, and I do, you could have looked at that.

But let me suggest what the gentleman from New Jersey misrepresents. And I asked earlier if any folks on the other side were qualified to study this. The gentleman from New Jersey just doesn’t seem to understand how this legislation works. He completely misrepresented when he said that it is incumbent upon the majority and the chairman who is bringing this forward to defend these studies. Sir, this bill does not authorize specific studies. That is not how the authorizing language for the National Science Foundation works. It would be ludicrous, and you should know that; and if you don’t know it, you are not qualified to speak to this. But it would be ludicrous to suggest that when you authorize a foundation, that you are authorizing every single specific study or that you know what all those specific studies are. That’s not how the National Science Foundation works. That’s not how we authorize it. That’s not how this bill functions. And it’s indeed not how many, many of the authorizing bills function here. So to suggest that, to bring forward a broad authorization bill that gives responsibility to a foundation, one has to justify every single study is to misrepresent how this legislation works. And that’s the problem. I think the gentleman either misunderstands or misrepresents how the legislation works.

I thank the gentleman from California for yielding.

The Acting CHAIRMAN (Mr. Andrews). The question is on the amendment offered by the gentleman from California (Mr. Campbell).

The question was taken; and the Acting Chairman announced that the noes appeared to have it.

Mr. CAMPBELL of California. Mr. Chairman, I demand a recorded vote.

The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings on the amendment offered by the gentleman from California will be postponed.


arduous days ahead

5 February 2009

While reading FDR’s first inaugural recently, I was struck by just how forceful it is. Most of the time when I see quotes from FDR’s speeches they’re statements about specific events: “date that will live in infamy”; universal statements: “only thing to fear is fear itself,” or the four freedoms; or evocative descriptions of the conditions of the Depression: “one third of a nation.” But I rarely see people bring up statements like the following, from just after the “fear itself” quote:

In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind’s goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

This isn’t FDR at his most left or populist or radical or progressive or whatever the term should be – especially not when compared with his 1936 speech at Madison Square Garden (familiar quote: “For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government”).* But of course Roosevelt, under pressure from groups on the left, from people like Huey Long, and from the effect of slowly improving but still difficult economic conditions shifted leftward from 1932 to 1936. (At least I think that’s still the current accepted interpretation.)

What’s surprising is how left (or whatever) he already was – at least that’s how it appears to me, reading him today – when he was sworn in. I suppose that’s a sign both of how dire the emergency then was, and also of how much the political spectrum has shifted the other way in more recent years.

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*However, near the end of the 1933 inaugural he does say:

But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

Which is pretty ominous-sounding, and though a dramatic increase in executive power isn’t clearly a right or left shift – it depends on what’s done with the power – it certainly is radical.


how amusing

1 February 2009

The new administration and new Congress are bringing change to the federal government and that change has to be covered. But how deeply? Institutions are important, but except to those who love this sort of stuff, reading writing about institutions can be numbingly dull. So you get Ezra Klein writing things like

Clinton partially repealed 12291 with Executive Order 12866. I’m not going to explain it because, frankly, you all will stop visiting this blog if I do, but suffice to say it pulled many of Reagan’s changes back.

or Elana Schor cutting off an excerpt from a budget resolution, saying

Okay, I had to stop it there at the risk of driving people away with Congress-speak.

Of course these kinds of disclaimers or apologies aren’t really new: Mark Schmitt, for example, who often writes about political process issues, put a number of them into his posts back when he was blogging regularly at The Decembrist. Here’s one from a post on campaign finance

My apologies to readers for a long post on a subject that, evidence shows, is of interest to almost no one.

(And readers who made it to – or at least near – the end of my post on Senate campaign finance disclosures last summer might remember seeing an aside along the same lines.)

I highlight these because I keep seeing them – probably because I appear to be one of those people who finds this stuff interesting – and it keeps reminding me of one of my favorite quotations, from Richard White’s book on the Columbia River:

Planning is an exercise of power, and in a modern state much real power is suffused with boredom. The agents of planning are usually boring; the planning process is boring; the implementation of plans is always boring. In a democracy boredom works for bureaucracies and corporations as smell works for a skunk. It keeps danger away. Power does not have to be exercised behind the scenes. It can be open. The audience is asleep. The modern world is forged amidst our inattention.


counts of corruption, 2

9 January 2009

Noonan, as I wrote below, decided not to attempt to compare levels of corruption across time and space. His explanation is worth quoting at length, as it gets into a lot of the problems surrounding attempts to quantify corruption. (Note that he describes the practice of indexing corruption to numbers of convictions as a “mistake.”)

What I have resisted is a temptation almost equally irresistible–to  quantify. Modern moral argument, not to mention sociology and criminology, depends heavily on quotable numbers. When the subject is bribery, an economic transaction, it seems that numbers should be available. Tourists and journalists are very free in judging that a society is “corrupt” or “very corrupt.” Historians and political scientists have not been far behind them. Surely, it may be supposed, the confident judgements that have often been made rest on a foundation of figures.

Quantification is conceivable. It has never been systematically attempted. There are no existing sets of figures by which one could conclude that the Roman Empire, for example, was more or less corrupt that the British Empire or the United States. In the absence of this kind of data it is wrong, I believe, to create an illusory certainty by using comparative terms.

Judgment about corruption in a society need not rest on a statistical basis. But with bribery several factors operate to make unquantified judgment difficult.

First,* the act is criminal and consensual; the victim where there is one is not made aware of the arrangement as it affects his case; consequently a number of acts of bribery remain secret and undiscovered.

Second, accusations of bribery are often politically motivated or are made in order to satisfy certain social or psychic needs; one cannot judge from the accusation along whether acts of bribery have actually occurred.

Third, the amount of legal attention bribery receives is misleading. One society may be uncensorious of most reciprocities with its officeholders; there may be no legal response to them a all, and the appearance will be given of integrity everywhere. A different society may define bribes, legislate against bribetakers, and prosecute bribery in such a way as to suggest that the crime is ubiquitous. A common mistake is to use the number of laws enacted or convictions obtained as an index of corruption.

Fourth, some critics have strong inclinations to exaggerate the corruption of their own day, and others have strong inclinations to denigrate past times or aliens or members of another race, religion, or class. Their criticisms will then be used as evidence that corruption is worse now or worse then, or worse with certain groups than others. Impassioned complaint will function as though it were hard evidence.

Fifth, there is the fallacy of the perfectly corrupt man–the belief that vices are linked and that unless a man is thoroughly corrupt in every aspect he can be no bribetaker or bribegiver. Moral judgment is held at bay by the kindly family man or illustrious genius who is also a taker or giver of bribes. Francis Bacon, Samuel Pepys, Warren Hastings are not merely respectable; they are heroes–respectively the founders, in the view of their admirers, of British science, the British navy, and British India. Bacon was a bribee by the law as actually enforced; Pepys a bribee by his own measure; Hastings a bribee by the law that was being made. Apologists by the score have hesitated to give their bribetaking its proper name. As for bribers, judgment has always been even more charitable, the underlying assumption being that they are the victims of extortion. When the persons involved have been preeminently just, judgment has often been entirely suspended. Who thinks of Thomas Becket or John Quincy Adams as giving bribes? The fallacy of the perfectly corrupt man prevents seeing bribery in transactions which, measured by at least one of the standards in use in their own time, were corrupt although executed by men of otherwise eminent virtue.

Finally, there is great difficulty in accepting a society’s own standards when one approaches the society as a traveler or as a historian. Bribes are a species of reciprocity. Human life is full of reciprocities. The particular reciprocities that count as bribes in particular cultures are distinguished by intentionality, form, and context. What is a bribe depends on the cultural treatment of the constituent elements. The observer outside the culture, like the cynic or rigorist within it, is inclined to see the conventional differences as arbitrary and to reduce all reciprocities of a given kind to bribes–to treat, say, any gift to an officeholder as a bribe. Doing so, the outsider imposes his own standard and reaches a judgment that is unreasonable if the culture’s own norms are used.

These major reasons for mistake–the rarity of proof of actual bribery; the abundance of accusations; the misleading impressions given by legal activity in its regard; prejudices of many kinds; the fallacy of the perfectly corrupt man; and the reductionism that eliminates conventions and looks only at function–mean that broad generalizations about the amount of bribery in a society must be made with caution and with caveats and without great confidence in their reliability.

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*I’ve broken items 1-4 on this list into separate paragraphs for easier reading.