A few thoughts on “too big to fail”

A recent New York Times article poses the question: If it’s too big to fail, is it too big to exist? The article poses some good points which I’ll summarize as best I can:

  • We have moved past the era of many small banks, and will probably not return to it any time soon if at all.
  • Sheila C. Bair of the Federal Deposit Insurance Corporation (if you don’t know who they are, look for the FDIC sticker next time you go to a bank) argues for fees imposed on larger banks after they have been bailed out by the government.
  • The other people in the story tend to agree that allowing the taxpayers to foot the bill for large bank blunders is unsustainable long-term.

I agree that we can’t let the largest of the banks fail more than once. We must focus on prevention of future bank failures. At the same time, the possibility of a bank the size of Washington Mutual just up and failing is frightening, and would have had dire consequences for everyone, even those that do not have a bank account and deal only in cash or prepaid debit cards.

The consequences of any of GM, Chrysler, and AIG failing completely would also be rather dire. As it stands, I find the demise of GM’s Pontiac marque rather saddening given I own one of the vehicles. (As if that was not enough, my previous vehicle was a Plymouth.) Without going into specifics, we did not get through the Great Depression of the 1930s without a great deal of government intervention, and the leadership of a truly great president, Franklin Delano Roosevelt. I find it unrealistic to think that in our greatest economic crisis since that the best policy is “hands off and let the market do its thing.”

I do think that the best strategy looking forward is to keep a closer eye on the size of companies; there is a reason we have antitrust regulations, and it is entirely possible they do not always go far enough.

Did the ADL go out of bounds?

An article from SocialistWorker.org reports on the case of William Robinson, a professor of sociology at the University of California-Santa Barbara (UCSB). This controversy centers around Robinson’s condemnation of the Israeli invasion of Gaza that began in 2008 December.

As stated in the second paragraph of the article:

This campaign against academic freedom is not just an attempt to punish me. Much more importantly, it aims to create an environment of fear and intimidation in which any criticism on Israeli policy is subject to sanctions and censorship.

Robinson’s article goes on to detail the course material he chose for his class on 2009-01-19, the birthday of Martin Luther King, Jr. Suffice it to say, he does not mince words in his condemnation of the atrocities.

Two students out of a class of 80, who Robinson does not know personally, were offended by the images that they withdrew from the class. If only that were the end of it. Fast forward to 2009-02-09, when Robinson receives a letter from the Anti-Defamation League (ADL), courtesy copied to the president of the University of California, the chancellor of the Santa Barbara Campus, and other universiy staff not specifically named in the article.

Then, a month later on 2009-03-09, Abraham Foxman, the director of the ADL, flew all the way from Washington to Santa Barbara to meet with about a dozen university officials, including two deans. Most thought the meeting was about a Jewish studies program; it instead was a thorough indictment of Robinson, discussed for an hour.

A short while later on 2009-03-25, UCSB begins investigating Robinson for violations of the faculty code of conduct.

Robinson reports that he is accused of two things: anti-Semitism, and introduction of course material “substantially unrelated” to the course. From what is mentioned in the article, I believe neither hold water.

First, anti-Semitism. I fail to see how condemnation of Israeli state conduct, particularly the scoffing of international law, can be anti-Semitic. Israel is subject to the same international law as any other country, and when that law is violated, they are subject to the same sanctions and criticism.

Second, this is a global affairs course that Robinson is teaching. The assertion that the conduct of Israel, especially within the context of complaince with international law, is irrelevant to a global affairs course is absolutely, positively, galactically stupid and absurd.

I believe the Holocaust was a tragedy and condemn true anti-Semitism, just as I condemn hate based on criteria such as race, gender, and sexual orientation. But at the same time I’m not going to give the modern-day Israeli government a free pass when they thumb their collective nose at international law.

Robinson concludes the article with a stirring condemnation of those responsible, implying the Israel lobby are “anti-democratic, authoritarian, or totalitarian” and also highlighting the suppression of academic freedom in apartheid South Africa, dictatorships in Latin America, the now-collapsed USSR, in the US under McCarthyism, and, oh yeah, Nazi Germany.

I believe my thoughts on the matter are summed up quite nicely by this quote from a reader of the Los Angeles Times, whom I wholeheartedly agree with:

[I]f you do not like Nazi comparisons then urge Israel not to commit Nazi-like atrocities rather than condemn and ostracize those who make the comparison.

AP sticks their nose in reporters’ Facebook profiles

Wired.com’s Threat Level reports on a new Associated Press policy aimed at reporters. The intent of the policy is “to make sure material posted by others doesn’t violate AP standards.”

That would be all well and good. Except this is for employees’ personal Facebook profiles–and that is where I think this policy goes over the line. The policy is also vague, quoting from further down in the article:

It’s a good idea to monitor your profile page to make sure material posted by others doesn’t violate AP standards: any such material should be deleted.

This is in addition to these ominous and censorious directives:

[E]mployees also should avoid including political affiliations in their profiles and steer clear of making any postings that express political views or take stands on contentious issues.

Further down, in the Twitter-specific section:

Also, when tweeting, remember that’s there a big difference between providing an observation (“I nearly bumped into Chris Matthews outside Penn Station”) and an opinion (“I nearly bumped into the loudmouthed and obnoxious Chris Matthews”).

And it gets even worse:

Do these guidelines apply just to AP employees who are journalists?

They apply to all employees, just as the Statement of News Values and Principles does. We cannot expect people outside the AP to know whether a posting on Facebook was made by someone who takes pictures, processes payroll checks or fixes satellite dishes. We all represent the AP, and we all must protect its reputation.

This edict is most troubling when combined with the fact that the Facebook terms of service only allow one account per user. If you maintain two identities, you run the risk of losing both of them. So it’s not like AP employees can make a “work account” and a “non-work account.” Facebook has this as a term of service for several reasons, the first being that it provides one easy way to clamp down on flagrant dishonesty.

I can see an issue if one heavily advertises that one works for the AP right before launching into a heavily political tirade, but this is different than expressing one’s political views outside of working hours under one’s own name.

To draw an analog, I avoid wearing my work uniform outside of work; I made it a point to bring a change of clothes when I played in my bar poker league after work, and would change out long before the game began. (I will concede that comfort was a contributing factor, but I probably would still have changed clothes even if it were not.)

It’s the same with the AP. There’s a difference between “on the clock” and “off the clock.” Within reason, “off the clock” conduct should be “off-limits” for company policies.

WNBA Outsiders flap appears to be resolved (followup)

Following up the previous story on the WNBA blocking the WNBA Outsiders Twitter account, the latter tweeted a few hours ago that it may have been as simple as a misunderstanding over improper use of the WNBA logo.

If this is the case, I still stand by my earlier statements; this could have been resolved with a simple e-mail or direct message rather than heavy-handed and potentially incendiary attacks as blocking without notice. Given the WNBA’s poor response, I commend LD Thornton’s ability to stay relatively level-headed through this little ordeal.