October 23, 2008, 10:00 a.m.
The Day's News
Coach Ferentz going to court; 200-signature petition going to President Mason; UI going to/for Johnson County Jail; Tampa Bay Rays put lie to "you get what you pay for;" 1967 flood warning more evidence of officials' need for Internet research training; UI wants explanation of the part of "public" in "public records" it doesn't understand; Movie "W" sympathetic to Bush
UI Sexual Assault Case: Year Two
Last week marked the beginning of the second year of the ongoing consequences of an alleged sexual assault on October 14, 2007. And there's still no light indicating an end to this dark tunnel.
Today's news contains three, count 'em three, stories related to the case.
Political Science Professor Michael Lewis-Beck's petition, calling for the reinstatement of peremptorily-fired former UI General Council, Marc Mills, has grown to 200 signatures, and will be presented to President Sally Mason late this afternoon. There will, presumably, be follow up stories regarding that meeting. Brian Morelli, "Prof will deliver petition to Mason; Wants Marcus Mills reinstated," Iowa City Press-Citizen, October 23, 2008, p. A1.
The trial of the two athletes charged with the assault is scheduled for November 3 (when any media coverage of the case will tend to be overwhelmed by the presidential election the next day). But there are pre-trial hearings as well, and one is scheduled for today. The issue is whether statements made by an accused to the likes of Coach Ferentz, Fred Mims, and EOD (Equal Opportunity and Diversity) folks should be admissible in evidence or, as the accused's lawyer contends, are in essence "involuntary confessions" that should be excluded. The coach, and other UI administrators are expected to attend and testify. Lee Hermiston, "Ferentz expected to testify at UI Sex Abuse Hearing," Iowa City Press-Citizen, October 23, 2008, p. A1.
Finally, the Des Moines Register and others have been asking the UI, "Just what part of 'public' don't you understand?" -- as in "public records" that happen to relate to a form of "student records." One federal law says they have to report to the public the campus crime statistics. Another says they must protect student "privacy." Some say the answer is to just remove the student/s' names from documents. Others say that's still a problem. Lee Rood, "U of I wants clarification after request for records," Des Moines Register, October 22, 2008 [and Iowa City Press-Citizen, October 23, 2008, p. A6].
800 Pound Gorilla Goes Directly to Jail, Does Not Pass 'Go' or Collect $200
When biking up town I often go along Capitol Street. I've noticed that it's mostly a University building and the Johnson County Jail, along with acres and acres of automobiles, but never examined it closely. So the other day, thinking about the jail expansion, I biked through the parking lots instead of on the street.
I've not been a proponent of a new jail, though I recognize there is some good data to support the idea. (My preference is for alternatives to incarceration, and multi-county regional jails for overflow -- the former already being done and the latter rejected out of hand). But as I was biking behind the jail the answer was obvious: If we're going to expand the jail wouldn't the cheapest, most efficient and least disruptive place to put it be right where it is now? There's sure plenty of unused space back there.
I forgot about that experience until I read in the Press-Citizen shortly thereafter that our Sheriff had been thinking the same thing -- only to be frustrated by an intransigent, dog-in-the-manger University refusing to sell. Brian Morelli, "UI interested in county jail space; Sheriff: Property's value estimated at $5M," Iowa City Press-Citizen, October 21, 2008, p. A3.
That story, in turn, reminded me of the frustration the residents of some of Iowa City's old neighborhoods have had, watching the University destroy neighborhoods that could be real assets for the University as single-family homes, a walking distance from the campus (if not, in some cases, right across the street), that would be ideal in attracting new and visiting faculty to Iowa.
The University is, and acts like, the local community's "800-pound gorilla" ("Where does an 800-pound gorilla sleep?" "Anywhere it chooses.")
Nor is the problem limited to the state's universities. It's an issue involving state property needs generally. It has implications for Iowa communities' quality of life, for local property tax revenues, for flood control and flood plains.
It needs to be reviewed by the Legislature. Hopefully it will be. Meanwhile, given the University's contributions to the population of that jail (see stories above), you'd think it could be a little more cooperative and considerate in working with the institution's needs for expansion.
"You get what you pay for"? Not quite. Baseball and university presidents' salaries
How many times have you heard someone -- often a salesperson -- say, "Well, you get what you pay for"? The suggestion is both (a) you should always buy "the best" (even though, for a given task or general purpose, the "good" or "better" may be your "best buy"), and (b) in seeking "the best" the most reliable guide is price. The higher the price the higher the quality.
Over the near-70 years I've been aware of the Consumers Union's (CU) Consumer Reports it has been putting the lie to that canard. If a purchase is important to you, a brief review of CU's hard copy and online independent (no advertising) research can ensure both (a) that what you end up buying will be of higher quality and come closer to your precise needs and wants, and (b) often significant savings.
In short, "you get what you take the time to research and comparison price."
This year we have yet another example from the world of baseball.
I'm not about to predict who will win the World Series. For my purposes at the moment it makes no difference. My point is that this year's American League pennant winner, now playing the Phillies in the World Series, is the Tampa Bay Rays.
So what's the significance of that? Simply that the Rays, with a total player payroll of $43 million, are second only to the Florida Marlins for the lowest salaries of any of the 30 teams in the major leagues. (The Phillies' payroll is $98 million; the Yankees, $209 million.) Art Spander, "Philadelphia Phillies go one game up against the Tampa Bay Rays in the World Series; So many subplots, so much artifice. So many cowbells and, honest, cownose rays swimming in a 10,000 gallon tank beyond the right field fence," [London] Telegraph, October 23, 2008, updated 11:06 a.m. (GMT).
"You get what you pay for?" Not if you're goal is to play in the World Series.
It's a story worth remembering next time we buy the "you get what you pay for" line when hiring university administrators (in the last couple weeks we hired another one in the $500,000-$1,000,000 range (salary, plus benefits, expenses, deferred compensation, etc.).
Iowa City has a relatively low cost of living compared with New York, San Francisco, or any of the other large urban areas with major universities. This is true for two reasons. (1) Some costs are lower: buying a house, going to a restaurant, or the theater. (2) Other costs can be avoided entirely: long commutes to work, parking costs, expensive (and expansive) wardrobes of clothes (see, e.g., Governor Sarah Palin's $150,000 campaign expense for two-months' clothes), or country club memberships.
Is there really no one in Eastern Iowa, the rest of Iowa, the rest of the United States or the world, who would be equivalent in experience, intelligence, social skills, judgment, and administrative ability to that of the administrators we now have, who would be willing to accept the prestige of such positions for a "living wage" of say, $150,000?
Just something to think about. Especially when thinking about the amount of money the CEOs who brought us this economic collapse have already taken for themselves.
[Literalists, statisticians, and baseball professionals should be sure to check out Professor Tung Yin's "Baseball and University Salaries," October 23, 2008, for a much more detailed analysis of the "you DO get what you pay for" theory, and a rebuttal of this portion of today's blog entry.]
1967 Report: "The 2008 Flood is Coming! The 2008 Flood is Coming!"
It turns out that Cedar Rapids officials were warned by the Corps of Engineers in 1967 that floods the seriousness of the one we all suffered this year -- or worse -- were well within the range of possibility.
The Report was referred to in a meeting of the Rebuild Iowa Advisory Commission's Task Force on Flood Plain Management and Hazard Mitigation. Said member Rob Hogg, state Senator from Cedar Rapids, "I've worked on these issues, and I was just shocked that there was a study that I never knew about." Rob Boshart, "Corps Warned of Risk in 1967; Engineers Predicted 'Perfect Storm,'" The Gazette, October 23, 2008, p. A1.
I don't mean to be critical of Senator Hogg, or others who expressed shock at the discovery, but it does illustrate one of my concerns.
When I used to serve on the local school board I would observe "with some 15,000 local school districts in America, it is highly unlikely that there is any challenge we confront that has not been experienced elsewhere, studied, resolved, written up and made available on the Internet."
I'm not sure that's true of this 1967 Report (though there would have been other ways to find it).
Of course it's good to talk things through and share personal anecdotes, opinions and intuition. But it is so much more efficient and productive to, first, do some basic research to find "best practices" from others (without the need to pay hefty "consultants'" fees).
I have always been amazed at the public officials who will willingly take two or four days from work to attend a conference, at considerable public expense, and rationalize the time and expense by citing how much they learn there. And yet they won't invest a half hour or less looking for the answers they need from the billions of Web sites, government and academic reports available to them for free -- and often Google-accessible in far less than a minute.
Movie "W" Sympathetic to Bush
Saw "W" last evening. It's sure not a political propaganda film that George Bush would want to use if he were running for re-election. But neither is it the kind of Saturday-Night-Live-style comic caricature we've seen so much of regarding our president. It won't alter by much your present evaluation of the kind of president he's been. But it will give you some additional sad and sympathetic understanding of why.
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October 22, 2008, 7:25 a.m.
Personal Note and Update
For the past couple weeks, in addition to my regular teaching at the University of Iowa College of Law, I've been involved with preparation for and presentation at the "Carterfone and Open Access in the Digital Era" conference put on by the High Technology Law Institute of the Santa Clara University School of Law in California.
It's amazing how well the world was able to keep on turning without my daily blog entries during that time. Also rewarding is the extent to which the 500-plus entries in this blog have apparently now become a reference source for users with or without daily additions; the daily hits remained pretty solid.
And at least some progress can be reported with regard to a number of the issues we track that is at least consistent with this blog's recommendations.
Here, then, are mostly mini-entry updates about a range of subjects: Global economic collapse; Afghanistan/Pakistan; Bars, Booze and Binge Drinking; Corporate Welfare; Sexual Assaults; Carterfone; and the Dysfunctional Airline Industry.
Global economic collapse. Since first making the suggestions that the first Paulson plan (approved by Congress) was flawed, and that the taxpayers should be getting an equity interest for their money (following the Swedish example from 1992), both the U.S. and Brits have moved in that direction. Similarly, more attention has been given to helping mortgage-struggling homeowners rather than just greedy bankers, holding down the personal compensation paid to the CEOs of bailed banks, the need to get a jobs program ready to roll out (which could do double duty in the repair and building of the long-ignored infrastructure featured on PBS last evening), the need for more prosecutions of those responsible for our current plight, some long term fixes, and an awareness that we're heading into an unprecedented and unknowable global recession/depression involving far more than the financial sector.
No; I suffer no illusion that any of these movements have been affected in the slightest by anything I wrote. But it is always reassuring to see one's early instincts and writings sort of confirmed by subsequent events, or the comments of those who really do know what they're talking about.
Afghanistan/Pakistan. Similarly, the evidence continues to mount, as I have earlier written, that there is no "military solution" to the problems we confront in Afghanistan/Pakistan (or Iraq for that matter). Indeed, the presence of our troops is in many ways counter productive -- angering local civilians, turning off both "hearts and minds," destroying rather than building a sustainable local economy, and contributing to the recruitment of terrorists. Most recently, yesterday, over the protests of the Kabul government, our continued bombing resulted in the killing of nine more Afghans -- this time soldiers fighting alongside Americans. Meanwhile, our relations with Pakistan, and our military activities there, have contributed to the disintegration of Pakistan's government and economy -- to the point that Pakistan (a nation with nuclear weapons) is probably now, potentially, the single most dangerous country in the world so far as America's national security is concerned. Not because it's leadership is "anti-American," but because it is a country where joblessness and chaos means starvation, and eventually uncontrollable revolution.
Bars, Booze and Binge Drinking. The City Council is taking another look at the social and economic costs of alcohol abuse that its policies, and those of the University, have permitted to increase over the years. It remains to be seen how effective any ultimate proposals may be -- the Council refuses to even consider a proposal that those who cannot legally buy alcohol should be required to leave the bars at 10 p.m. (erroneously called "21-only") -- but I'd rather the Council at least be addressing the problems than continue the "see-no-evil-hear-no-evil" approach.
Corporate Welfare. Surprise, surprise, the Sheraton has just been given -- for free, so far as I can gather from the papers -- a 13-foot swath of formerly public street and land. This was described as a "license." That sounds an awful lot like Senator Ted Stevens' effort to draw a distinction between a "loan" and a "gift" of property (e.g., a $2500 chair, a generator) he received, and didn't report on the ethics forms. Iowa City's taxpayers, who once owned Dubuque Street, had retained a 25-foot swath of it under the Sheraton for a public walkway. The City Council has just told the hotel it can capture 13 feet of it to expand its lobby. And while I'm on this subject, what's the deal about turning over public sidewalks to restaurants to expand their seating capacity? Do they pay to use that public property, or is that more of the Council's generosity with our land?
Sexual Assaults. The Regents and their universities are moving ahead with the effort to come up with new organizational arrangements and procedures for handling sexual assaults. It remains to be seen what they'll come up with -- beyond the Stolar Report recommendations. One of the toughest issues involves respect for the alleged victim's wishes. If she ends up deciding not to file a complaint with the police the university (especially if athletes are involved as alleged perpetrators) is open to speculation that it played a role in encouraging her to do so. If they don't report it on their own they can be charged with a "cover up." If they do report it on their own they can be charged with interfering with the alleged victim's rights of privacy.
Carterfone. As an FCC commissioner, most of the some 400 opinions I personally wrote were dissents or concurrences, explaining why I thought some or all of what my fellow commissioners were doing was wrong. One of the most significant opinions I wrote, however, was a unanimous opinion for the majority -- much more far reaching in its effect than anyone could have known at the time, myself included. Sufficiently so that a conference was held at Santa Clara University last Friday to celebrate its 40th birthday. Sometime early next year there will be a book-length collection of the papers presented, so I can't summarize all of the issues here in a blog paragraph -- even those addressed in my own keynote address.
It was decided at a time when AT&T had as close to a complete monopoly as any company in America. It both manufactured and owned all the telephone handsets, the cable, the switching stations, the long distance lines -- all of it. And it had an FCC tariff to insure it stayed that way. Nothing could be attached to the telephone network that was not AT&T's -- up to and including even a plastic cover on a telephone book, also called a "foreign attachment."
Tom Carter, a Texas cattle rancher, wanted to be able to take and place phone calls while out riding fences. He invented a device that enabled him to do it. The Carterphone could receive radio communication from his transceiver, hold a telephone handset, and switch back and forth as the parties spoke.
AT&T fought it as a violation of its tariff. The FCC, through the opinion I wrote, found the tariff illegal. It took another 10 years to implement the decision (with "Part 68" regulations), but ultimately Americans could buy telephones in drug stores, and almost unnoticed began using "modems" resembling Tom Carter's device, with "acoustic cups" for a telephone handset, to connect their early desktop computers to what became "the Internet."
Among the issues we confront today, some 40 years later, are whether the principles (or even precedent) of the Carterfone decision are relevant to resolving some of the bottlenecks and impediments the major cell phone carriers are imposing on their customers, and the suppliers of new devices (that sometimes take the form of computer "software" rather than "hardware"), in an age when cell phone ("wireless") carriers are rapidly becoming the primary on ramps to the Internet.
You'll have to wait for the book (or movie) to get the whole story, but that will give you some idea of what I've been up to while away from the blog.
Dysfunctional airline industry. Meanwhile, getting to California and back was just a further reminder of how dysfunctional our airline industry has become. This is not a new observation for me, nor I suspect for you. So much so that when Mary and I were going to Denver last August we opted for the train.
What a treat! We actually had a roomette, but I'm not sure I'd bother next time. The coach seats on a train are better than the first class seats on a plane. They go back further, and with foot rests make sleeping possible. They and tray tables don't have to be "put in their full upright position" every time you enter a station. Large picture windows in every car -- not to mention the lovely "observation cars" -- let you see (rather than merely imagine) what the countryside looks like. You can walk around whenever you please (the full length of the train if you wish), rather than be buckled in. Get food whenever you want at reasonable prices. Read, write on your laptop, make cell phone calls, nap.
Airline travel never was a big thrill for me, but I never experienced any fear of flying, and found it generally pleasant enough during the latter half of the Twentieth Century. Going to Japan with some regularity, it was often possible to find six empty seats where you could stretch out. On domestic flights there were enough flight attendants on board to bring you food and drink and be otherwise pleasant and attentive without being stressed. The seats, and space between rows, were wider and more comfortable -- with often an empty seat beside you where you could spread out papers and such. My memory is the seats went back further, too. Flights were usually on time; baggage usually came through safely. There were few delays for last minute "maintenance" or otherwise cancelled flights. There was little concern about hijacking or terrorists. A flight was a time to relax, away from phones and other interruptions. On the rare occasions when a canceled flight required an overnight stay, the airlines would pay for your hotel and meals until you could leave the next day.
There was a time when I represented American Airlines as a lawyer. And I later became almost a United Airlines groupie -- buying a lifetime Red Carpet Club membership (during a very narrow window of time when it was an incredible bargain -- never then imagining that my own lifetime might end up lasting longer than that of United), carrying a United Visa card, piling up my Mileage Plus miles, and usually travelling often enough to build a nearly complete collection of each month's issue of Hemispheres magazine. I even bought a little stock (which rose rapidly in value and then, of course, became virtually worthless).
What a difference "deregulation" and a few bankruptcies can make.
Air travel never did make a lot of sense as a transportation system. (Can you imagine how Bob Newhart might have played the banker being pitched by the world's first airline for a loan?)
o Moving a multi-ton container off the Earth, into the atmosphere, takes an enormous amount of fuel -- not to mention the harm done to the ozone layer and greenhouse effect from the exhaust.
o Any transportation system that depends on favorable weather conditions is inherently unreliable -- especially when its marketed "advantage" is the "speed" represented by an on-time arrival that can so easily be affected by snow, sleet, ice storms, fog, dangerous winds, and other conditions that are mere inconveniences for travel by train, bus or automobile.
o Aside from the fact that "your seat cushion becomes a flotation device" when your plane falls into the drink, the container does not "become a boat" when that happens, nor is there any other "fail safe" option (as with a car simply going into a ditch) if the system fails.
o Part of the reason I pushed containerization when Maritime Administrator is that I early on discovered 90% of the cost of moving cargo was incurred within 10 miles of the port; the trip across the Pacific was virtually free. So it is with air travel. You need to allow a margin of error for (a) the time it takes to pack the car and leave the drive (or wait for the shuttle) and get within the vicinity of the airport (allowing for the possibility of traffic congestion, accidents, or a train parked on a railroad crossing), (b) find a place to park and drag your bag to the bag check, (c) the line at the check-in counter which can take anything between 2 and 45 minutes, (d) ditto for the security check that requires you to remove all metal along with your shoes and laptop, and then dress and repack, and (e) the walk to the gate. (f) This is on the assumption there is actually a plane at the gate. For any one of a long list of reasons it may not yet have arrived. Or, if it's arrived, there may not be a crew. (g) Then there's the sitting on the tarmac waiting for clearance to take off. (h) The delay, and possible cancellation, because of maintenance needs. (i) Any possible delays during the flight due to weather or other factors, and (j) congestion at the destination airport, or (k) the fact there is no gate to park at, or jet walkway at the gate. At which point there's a similar routine regarding (l) your connecting flight, or if your destination, (m) waiting for your bag (which may not have arrived), (n) getting ground transportation, and (o) the time of the trip to your ultimate destination. Not to mention the high prices for tickets, and the nickle-and-dime extra charges for checking a bag ($15), or avoiding starvation.
o On my flight to California there were four legs: a flight from the Eastern Iowa Airport (CID) to a regional hub, the flight to San Jose, the flight from San Jose to a regional hub, and the flight back to CID. On three of those four flights there were cancellations or delays (in one case the necessity of transferring to another airline) because of the last-minute discovery of necessary repairs. One involved a defective switch that controls the part of the plane that provides the lift necessary to get it off the runway. Another involved a defective brake -- necessary to keep the plane from going off the runway. And the third was something I've never encountered before: (a) the need to remove fuel because there was too much on board and (b) the necessity to balance up the fuel in the tanks because it was so much out of balance that the plane couldn't fly. Now I ask you, could none of these problems have been anticipated or discovered prior to the moment of take off?
o While I'm on this rant, here's one more. If you buy 100 head of cattle and only get 87, or a dozen bagels and there are only 10 in the bag, you -- and the person who sold them to you -- expect that you will ask for, and receive, either a refund or the additional goods. What are you buying with an airline ticket? Speed of travel; arrival at a fixed time. As a result of the maintenance work, and necessary change of airlines, I missed an event in California I was scheduled to attend -- and for which I had allowed plenty of extra time in the travel schedule. When you do not arrive at your destination at the scheduled time -- for whatever reason -- you are not getting what you purchased. There is a "loss" associated with that delay -- for everyone on the plane. We can argue about how we should go about calculating the economic value of that loss, but that there has been a loss is clear. The question is, how should it fall; who should bear it?
If it is important to you to have something constructed by a particular time you can build into a construction contract provision for a bonus if it is finished on time, or a penalty if it is not. But we don't have such a provision in our contracts with the airlines -- nor do we have the bargaining power to negotiate for it. So the entire loss falls on us, the customers, those who have the least responsibility for the delay.
In sum: The airlines have become dysfunctional. Just one more reason why, while we're about the business of rebuilding our disintegrating early-Twentieth Century infrastructure we need to give really serious consideration, and funding, to rebuilding our passenger rail transportation system.
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October 10, 2008, 7:30 a.m., 12:30 p.m.
Which Do You Want First, the Bad News
or the Bad News?
To help get your mind off of the coming global depression, let's take a look at Afghanistan.
[Photo credit: European Pressphoto Agency; as reproduced in New York Times, October 9, 2008; "Zabiullah Majahid, front, of the Taliban, led his group in the mountains of Helmand Province."]
Once again we are learning that, as I put it to President Lyndon Johnson with regard to Vietnam, "You can't play basketball on a football field."
Once again we are learning why I am only half joking when I say we need "military control of the civilians, rather than a government in which civilians dictate to the military."
Once again we are learning that the bumper sticker's observation -- "whatever is the question, war is not the answer" -- while overly simplistic, is right more often than it is wrong.
There are many differences between Vietnam, and Iraq, and Afghanistan, and Pakistan. But as important as it may be to recognize and respond to those differences, it is equally important not to ignore their similarities.
It is very difficult to "play war" when:
o You are only the latest in a long line of outside invader/occupiers (most of whom have been no more successful than you are about to be)
o The "enemy" is not a "country" in the sense we normally think of it, but an area where borders are both porous and disputed and central governments may be corrupt, weak (or engaged in civil war)
o You don't understand the country -- its people, tribal loyalties, history, culture, geography, and most importantly, language
o There are no "front lines" or battlefields (in the WWII sense) -- territory gained at considerable cost can easily and quickly be lost
o The "enemy" refuses to wear easily identifiable uniforms, dresses and looks like your "allies" in the fight, and can easily fade into the local population
o The loyalty of your supporters is thin, and shifts with who's paying them and their (understandable) urgent sense of personal survival
o The resulting "collateral damage" (innocent civilian deaths and injuries) are counterproductive in "winning hearts and minds" and actually contribute to the increased recruitment of terrorists
o Genuine local economic and infrastructure needs -- roads, bridges, hospitals, schools, water and electricity -- go unattended, and are made worse, by military action and the resulting shift to a drug-based economy
These are but my instincts and observations. But they have often turned out to have been later echoed by military officers and others who really do have some credentials, experience, and on-the-scene observations.
That is now happening once again.
No, I am not singing "we ain't goin' to study war no more," or saying that there is no role for conventional military action, that we should become a neutral isolationist nation, or that we should eliminate the Defense Department's budget (although there is some evidence we could improve our national security by cutting it by about one-third, and certainly by replacing the Bush Doctrine with the Powell Doctrine. For an explanation of the Powell Doctrine see, Nicholas Johnson, "War in Iraq: The Military Objections," February 27, 2003.).
What I am saying, in passing, is that the McCain Campaign (and some in the media) are doing no one a favor by using the language of WWII to describe the challenges we confront in the Middle East -- "war," "surge," "victory," "winning," and "the white flag of surrender." "Send in the Marines," "these colors don't run," "let's kick some butt," and "nuke 'em" are the very dangerous and costly (in terms of lives, burden on taxpayers, and loss of international reputation) rhetorical chants of elected officials and candidates who are either (a) not very well informed, or (b) devoid of the ethical and moral restraints that might challenge their belief that "there is nothing worth losing an election for."
But what I am mostly saying is not "listen to me" but "listen to our military." Not "follow them blindly," just listen and reflect.
Senator McCain says he wants a "surge" in Afghanistan. He believes the one in Iraq "worked" -- even though it did not bring about (a) the political solutions it was designed to make possible, or even (b) a permanent reduction in insurgency and civilian deaths. The Washington Post reports that he has said, "the same strategy that [Sen. Barack Obama] condemned in Iraq, that's going to have to be employed in Afghanistan."
By contrast, the Post reports, General David D. McKiernan, who led the Iraq invasion and has for four months headed the NATO coalition in Afghanistan, has
stated emphatically that no Iraq-style 'surge' of forces will end the conflict there. . . . "The word I don't use for Afghanistan is 'surge,'" . . ..
"Afghanistan is not Iraq," . . .. [It is] "a far more complex environment than I ever found in Iraq." The country's mountainous terrain, rural population, poverty, illiteracy, 400 major tribal networks and history of civil war all make for unique challenges, he said.
McKiernan [says] what is required is a "sustained commitment" to a counterinsurgency effort that could last many years and would ultimately require a political, not military, solution. . . .
Another facet of the Iraq strategy that McKiernan doubts can be duplicated in Afghanistan is the U.S. military's programs to recruit tribes to oppose insurgents. . . .
Tribal engagement in Afghanistan is also vital, McKiernan said, but . . . "I don't want the military to be engaging the tribes," he said. Given Afghanistan's complicated system of rival tribes and ethnic groups and the recent history of civil war, allying with the wrong tribe risks rekindling internecine conflict, he said. "It wouldn't take much to go back to a civil war." . . .
[T]he violence is more intense than he had anticipated . . .. The U.S. military death toll has risen to . . . a new annual high since the war began in 2001.
Attacks into Afghanistan from Pakistan have escalated, . . .. An influx of foreign fighters across the border is bolstering the Taliban insurgency and has shown a "significant increase from what we saw this time last year," he said, pointing to intelligence that picked up fighters speaking Uzbek, Chechen, Arabic and other languages.
"We are in a very tough fight," he said. "The idea that it might get worse before it gets better is certainly a possibility."
Ann Scott Tyson, "Commander in Afghanistan Wants More Troops," Washington Post, October 2, 2008, p. A19; and see Eric Schmitt, "Joint Chiefs Chairman Is Gloomy on Afghanistan," New York Times, October 9, 2008 ("With security and economic conditions in Afghanistan already in dire straits, the chairman of the Joint Chiefs of Staff said Thursday that the situation there would probably only worsen next year. 'The trends across the board are not going in the right direction,' the chairman, Adm. Mike Mullen, told reporters. 'I would anticipate next year would be a tougher year.'”).
And McKiernan was saying it two months ago
"There is no magic number of soldiers that are needed on the ground to win this campaign," McKiernan said. "What we need is security of the people. We need governance. We need reconstruction and development." . . . McKiernan said, "There is a clear linkage between 'narco' trafficking and financing of the insurgency."
Barbara Starr, "'Surge' May Not be Enough in Afghanistan," Commander Says," CNN, August 8, 2008, 1:35 p.m. ET.
British Commander Agrees: "Taleban will never be defeated;" it's "neither feasible nor supportable"
The departing commander of British forces in Afghanistan . . . Brigadier Mark Carleton-Smith, the commander of 16 Air Assault Brigade, whose troops have suffered severe casualties after six months of tough fighting . . . says he believes the Taleban will never be defeated.
He told The Times that in his opinion, a military victory over the Taleban was “neither feasible nor supportable”. . . .
The brigadier’s grim prognosis follows a leaked cable by François Fitou, the deputy French Ambassador in Kabul, claiming that Sir Sherard Cowper-Coles, the British Ambassador, had told him the strategy for Afghanistan was “doomed to failure” [and that] “the security situation is getting worse, so is corruption and the Government has lost all trust.” He said . . . “we should tell them [the U.S.] that we want to be part of a winning strategy, not a losing one. The American strategy is doomed to fail.” . . .
Brigadier Carleton-Smith . . . indicated that the only way forward was to find a political solution that would include the Taleban. . . . Efforts are being focused on the so-called “tier-two” and “tier-three” Taleban, who are perceived to be less ideologically intransigent.
The brigadier said that in the areas where the Government had no control, the Afghan population was “vulnerable to a shifting coalition of Taleban, mad mullahs and marauding militias.” . . .
He said that there had been a government vacuum for 30 years, . . ..
Tom Coghlan in Kabul and Michael Evans, "We can't defeat Taleban, says Brigadier Mark Carleton-Smith," The [London] Times, October 6, 2008.
U.S. Army Literally Re-Writes the Book: Mission "Development, Reconstruction and Humanitarian"
The U.S. Army on Monday released a new field manual that for the first time gives nation-building the same top priority as major combat operations in conflicts involving fragile states.
The Stability Operations Field Manual, derived from the Army's experiences in Iraq and Afghanistan, provides commanders and other Army personnel with a guide for supporting broader U.S. government efforts to deliver development, reconstruction and humanitarian aid in war-torn nations.
Army officials described the document as a roadmap from conflict to peace. . . .
The manual mirrors a U.S. defense strategy released in July that says military operations should play a supporting role for "soft power" initiatives to undermine militancy by promoting economic, political and social development in vulnerable corners of the world.
"The greatest threats to our national security will not come from emerging ambitious states but from nations unable or unwilling to meet the basic needs and aspirations of their people," the new Army manual states. . . .
"Army issues new manual for nation-building," Reuters, October 6, 2008, 4:44 p.m. ET
Nor are these kinds of judgments limited to the military generals.
British ambassador in Kabul: "The presence -- especially the military presence -- of the coalition is part of the problem, not the solution."
The British ambassador in Kabul thinks the war in Afghanistan is as good as lost and that current US military and economic strategy there is destined to fail . . ..
Sir Sherard Cowper-Coles, the UK diplomat involved, is also alleged to have said that the only practical long-term solution was for the West to support "an acceptable dictator" to unite the fractured country.
The diplomatic bombshell . . . came on the same day that the senior American military commander in Afghanistan called on NATO to provide more troops . . . in a counterinsurgency battle he said could get worse before it gets better.
The general's downbeat assessment also coincides with a fresh report by UN Secretary-General Ban Ki-moon, who expressed dismay that attacks on aid workers have risen in 2008 despite the presence of more allied troops than at any time since the US-led invasion in 2001. . . .
Cowper-Coles [is quoted as saying]: "The current situation is bad. The security situation is getting worse. So is corruption and the government has lost all trust. . . .
"[T]he insurrection, while incapable of winning a military victory, nevertheless has the capacity to make life increasingly difficult, including in the capital.
"The presence -- especially the military presence -- of the coalition is part of the problem, not the solution. The foreign forces are ensuring the survival of a regime which would collapse without them. In doing so, they are slowing down and complicating an eventual exit from the crisis." . . .
Cowper-Coles, 53, was also quoted as saying that while Britain had no alternative to supporting the United States, the Americans should be told to change strategy.
Reinforcing the military presence against the Taliban insurrection would be counter-productive, he said, and allied governments should start preparing public opinion to accept that the only realistic solution for Afghanistan was to be ruled by "an acceptable dictator."
Ian Bruce, "War in Afghanistan Lost, Says UK Diplomat in Leaked Report," The [Glasgow, Scotland] Herald, October 2, 2008; and see Charles Bremner in Paris and Michael Evans, "British Envoy Says Mission in Afghanistan is Doomed, According to Leaked Memo," The [London] Times, October 2, 2008.
National Intelligence Estimate: Afghanistan in "Downward Spiral" Due to "Lack of Leadership" from Bush Administration
A draft report by American intelligence agencies concludes that Afghanistan is in a "downward spiral" and casts serious doubt on the ability of the Afghan government to stem the rise in the Taliban's influence there, according to American officials familiar with the document.
The classified report finds that the breakdown in central authority in Afghanistan has been accelerated by rampant corruption within the government of President Hamid Karzai and by an increase in violence from militants who have launched increasingly sophisticated attacks from havens in Pakistan. . . .
Its conclusions represent a harsh verdict on decision-making in the Bush administration, which in the months after the Sept. 11, 2001, attacks on the United States made Afghanistan the central focus of a global campaign against terrorism.
Beyond the cross-border attacks launched by militants in neighboring Pakistan, the intelligence report asserts that many of Afghanistan's most vexing problems are of the country's own making, the officials said. . . .
[I]t also laid out in stark terms what it described as the destabilizing impact of the booming heroin trade, which by some estimates accounts for 50 percent of Afghanistan's economy. . . .
Inside the government, reports issued by the Central Intelligence Agency for more than two years have chronicled the worsening violence and rampant corruption inside Afghanistan, and some in the agency say they believe that it has taken the White House too long to respond to the warnings . . . .a "lack of leadership" both at the White House and in European capitals where commitments to rebuild Afghanistan after 2001 have never been met. . . .
The assessment on Afghanistan is the first since the Taliban regained strength there beginning in 2006 and launched an offensive that has allowed them to seize large swaths of territory. . . .
Senior American commanders have recently been blunt in their assessment of the security trends in the country. "In large parts of Afghanistan, we don't see progress," General David McKiernan, the top American officer in Afghanistan, told reporters last week. "We're into a very tough counterinsurgency fight and will be for some time."
It is not just American officials who offer a grim prognosis. A French diplomatic cable leaked to a French newspaper last week quoted the British ambassador to Afghanistan as forecasting that the NATO-led mission there would fail.
"The current situation is bad, the security situation is getting worse, so is corruption, and the government has lost all trust," the British envoy, Sherard Cowper-Coles, was quoted as telling the French deputy ambassador to Kabul, who wrote the cable.
Mark Mazzetti and Eric Schmitt, "U.S. Report Warns of Crisis in Afghanistan," International Herald Tribune, October 9, 2008.
America's interests and role in the world involve a lot more than the overwhelming application of military force. The military itself knows this. Why don't the politicians?
It's time we learned from our wisest military leaders -- and then took up our own responsibilities to let our elected and other officials know how we feel.
What has been attributed to Ghandi is still true: "When the people will lead, their leaders will follow."
Let's lead.
# # #
October 6, 2008, 7:45 a.m., 11:30 a.m. (addition of relevant links)
Conflicts About Conflicts of Interest
While the world evaluates our $1.3 trillion transfer of wealth from the middle class to the wealthy -- (along with the law's built-in earmarks for rum and wooden arrow heads) by depressing the value of global stock exchanges by about 5% (and trillions of dollars), we learn there are over 750,000 Americans who lost their jobs so far this year, 80% of Americans think they will be adversely affected economically, the British and American generals are telling us there cannot be a military "victory" in Afghanistan, voters watched the vice presidential candidates' debate like NASCAR fans watching for a crash that never happens
-- meanwhile, Marc Mills remains in the news with the petition for his reinstatement and two Iowa City lawyers duking it out over Stolar's charges of Mills' "conflict of interest."
Brian Morelli, "Faculty Circulating Petition to Reinstate Mills," Iowa City Press-Citizen, September 30, 2008, 4:23 p.m.
David Roston, "Pinpointing Mills' conflict of interest," Iowa City Press-Citizen, September 27, 2008
Mark Schantz, "Refuting Mills' 'conflict of interest,'" Iowa City Press-Citizen, October 4, 2008.
David Roston is the former chairman of the Chicago Bar Association Committee on Professional Responsibility. Mark Schantz was the University of Iowa's general counsel from 1992 to 2005.
David Roston wrote, "His [Marc Mills] responsibility was to protect the legal interests of the AD [Athletic Director/Department] and the university by assuring compliance with law and insulating it from liability. If Mills had made that responsibility clear to the student-athlete and her family, they would have known right off the bat that he was not going to protect their interests in this matter and that they should not rely on his help."
Mark Schantz responds, "Roston indicates that an attorney for the university should, when speaking with persons such as the student athlete's father, advise them that he is the university's attorney, not theirs. Mills did so, a fact about which there appears to be no dispute. Insofar as Roston implies otherwise, he is mistaken."
Roston charges, "Mills' failure to advise the Iowa state Board of Regents of the letter from the student-athlete's mother is analogous to the general counsel of a corporation failing to advise its board of directors of facts concerning an issue which it has decided to investigate. . . . The regents were his client, and it appears that he failed to provide them with important information because he thought that he had an obligation to the student-athlete and her family."
Schantz responds,
"[I]n the eyes of Iowa law, the Board of Regents exists separate and apart from the universities it governs. Chapter 13 of the Iowa Code makes completely clear that the attorney general of Iowa is the regents' lawyer. The board, therefore, is not the "client" of the university general counsel.
In the 13 years I served as university counsel, I recall no occasion when the board considered me to be its lawyer. . . .
Once it is understood that the regents were not Mills' client, the matter of whether and by whom the regents should have been advised concerning the critical letters from the student-athlete's mother takes on quite different coloration.
The Iowa Code is quite clear that the regents govern the institution by and through the president of each university. As a practical matter, the president directs regents communication downward to university officers and communication from university officers upward to the regents. I would not have made any official communications to the Board of Regents without the president's knowledge and approval. Nor, I am sure, did Marc Mills.
Roston also charges, "His [Mills'] responsibility was to protect the legal interests of the . . . university by assuring compliance with law and insulating it from liability."
Schantz responds,
Roston's final error, which also is reflected in the Stolar Report, is his misconception that the sole function of university counsel is to "insulate (the University) from liability."
University policies, however, reflect a variety of university interests, often described in rather general language, and university lawyers regularly are involved in trying to reconcile or balance the different interests reflected in those policies.
The university wishes, for example, to encourage victims of sexual assault to report such events and . . . also wishes to ensure that students accused of sexual assault are provided a fair hearing . . .. Balancing those competing interests is part of a lawyer's job, and it is not primarily about preventing liability. The fact that a large entity frequently pursues different interests does not mean its lawyer has a "conflict."
I cannot know, and won't speculate, why David Roston would have written what he did. From my own perspective, Mark Schantz clearly has the more persuasive analysis.
But this is more than just a "he-said-he-said."
As Schantz concludes, "Accusing an Iowa lawyer of 'conflict of interest' is to accuse one of violations of the Iowa Rules of Professional Responsibility. Such allegations are defamatory and actionable if false, as I believe I have shown they are, with respect to Marc Mills."
Links to Related Documents
Marc Mills
Stolar Partnership, "Special Counsel's Report [The Stolar Report], State of Iowa Board of Regents, University of Iowa Internal Investigation," September 18, 2008 (a pdf file):
"[T]he General Counsel's involvement as liaison for an alleged victim of sexual assault is improper, given the perceived (if not apparent) conflict of interest with the General Counsel acting in such a capacity." p. 12.
"Marcus Mills’ involvement in micromanaging the University’s response to the
incident presented a serious conflict of interest." p. 60.
"The role of the University’s General Counsel is to represent the University and its
Executive Officers, Administrators, Faculty and Staff, all in their official capacities. As legal counsel for the University, there is a substantial appearance of a conflict of interest if such counsel is dealing with an unrepresented complainant." pp. 60-61.
"The Office of the General Counsel should never have assumed a supervisory role
in the investigation of the incident. To do so was an inherent conflict of interest." p. 72.
_______________
Marc Mills, "Response of the General Counsel to The Stolar Report," September 23, 2008, see generally pp. 2-3, "Conflict of Interest":
"The Report does not cite the applicable rule [Iowa Court Rule 32], much less identify any specific provisions violated by Mr. Mills.
"[A] conflict of interest does not arise merely from communication between a lawyer and an unrepresented party, even a potentially adverse party. Indeed, the conflict of interest provisions of Rule 32 do not apply in such situations."
"Lawyers in these situations are guided by Rule 32:4.3, 'Dealing with Unrepresented Person.' ("In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. . . .").
"The facts indicate that Mr. Mills acted wholly and appropriately within the bounds of Rule 32:4.3 in his dealings with the father. At no time did Mr. Mills suggest or otherwise give the impression that he was disinterested. . . . The father never indicated to Mr. Mills that he misunderstood Mr. Mills' role and Mr. Mills never gave legal advice to the father. [Thus, he] did not violate either the letter or the spirit of the applicable ethical rule."
Links to Prior Blog Entries
The most extensive collection of material: Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present
"Sex and Finance," September 30, 2008.
"Cleaning Up After the Party," September 26, 27, 2008 (includes link to Mills' response to Stolar Report)
"Which Would be Worse?" September 25, 2008
"Scapegoat Bites Back," September 24, 2008
"Got Questions?" September 23, 2008
"Rational Responses to Stolar and Global Finance" (includes "The Case for Mills and Jones"), September 20, 2008
"Extra: Stolar Report," September 18, 19, 2008 (includes liink to Stolar Report)
Global Finance
"Better Alternatives to Congress' Bailout Plan," October 2, 2008.
"Sex and Finance," September 30, 2008.
"Alternatives to 'The Plan,'" September 28, 2008.
"Global Finance: The Great Fountain Pen Robbery," September 21, 2008.
"How Much Do You Owe the Chinese?" September 6, 8, 2008.
# # #
October 2, 2008, 7:00, 11:45 a.m.
Senate Bill: Wrong Plan, Favoring Wrong People, at the Wrong Time
Look, I understand that I don't have a Ph.D. in economics or an MBA in finance. But I can smell a hog confinement when the breeze blows in from south of Iowa City, and what is floating in the hot air coming from Washington smells very similar.
I really don't like to say "I told you so." But I predicted almost step by step what was going to happen with our war in Iraq, and it has. And I don't like what I see coming down the road over the next few years as a result of what Washington thinks is a "solution" to our financial woes either.
Nonetheless, I realize that most rational readers of this blog would like to have a little more reassurance on something of this magnitude than just my gut instinct and intuition. So this morning I'm going to wheel in the support of 200 economists and another nation's much more sensible solution to an almost identical challenge.
Do we need to "do something"? Absolutely. I just don't think we ought to be doing "something" that is going to make the situation worse rather than better, and is inherently unfair in terms of whom it benefits (the excessive-risk-taking greedy bankers who created and profited from the problem, along with the excessive-campaign-contribution-taking elected officials who, in exchange, deliberately failed to regulate it) and whom it burdens (the unemployed, working poor, homeowners, and present and future generations of taxpayers).
Don't you have just a little deja vu with the rhetoric from the White House? Doesn't it sound a little like the "mushroom cloud" we were going to be witnessing if we didn't invade Iraq?
[S]ane people were rightfully a little suspicious of the plan to upright the finances of the U.S. by a $700 billion handout funded by taxpayers.
The House was rightly skeptical too, failing to pass the proposal Monday.
But George Bush skipped talking about sacrifice and buckling down in his speech promoting the bailout to the nation. He preferred to persuade us mere peons using fear, as he has in the past. The phrases he chose were dire, scary even: “a long and painful recession” and “our entire economy is in danger.”
"More banks could fail, including some in your community,” he warned. “The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.
“And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.”
OK, we get it. The markets are falling apart, and with such a high percentage of people with some funds in the stock market, some sort of action will be taken.
But how long will it take before an accounting of the long term cost of fixing this financial mess will occur?
I’m awaiting the politician who admits that some will be shortchanged in the public arena as billions are leveraged to stave off the crisis. . . .
The money will come from somewhere. We just want to have a more honest accounting of the situation, of who will actually suffer, who will profit by the plan, and whether it will really fix the problems of the U.S.
Mary Sanchez, "We're Ready to Sacrifice, But Not be Suckers," Kansas City Star, October 2, 2008 (in this morning's Gazette as "Americans Ready to Sacrifice, But Not to be Suckers," p. A4).
Even Nicholas Kristof, a solid backer of the Paulson approach, acknowledges,
"[C]ritics of the bailout have reason to be furious. It is profoundly unfair that working-class American families lose their homes, their jobs, their savings, while plutocrats who caused the problem get rescued. . . .
Congressional critics of the bailout . . . should come back in January . . . with a series of tough measures to improve governance and inject more fairness in the economy: . . . remove tax subsidies on executive pay and allow courts to restructure mortgages as they do other kinds of debt. . . .
Among the strongest critics of inflated executive pay have been Warren Buffett and the late management guru, Peter Drucker, who argued that C.E.O. salaries should peak at no more than 20 or 25 times those of the average worker. (Last year, C.E.O.’s got an average of 344 times the wages of the typical worker.) . . .
C.E.O.’s hijack shareholder wealth in ways that are unconscionable. . . . [I]f [Nabors Industries] Eugene Isenberg . . . were to drop dead one of these days, his estate would be entitled to a “severance payment” of at least $263 million — more than the firm’s first-quarter net earnings.
Nicholas D. Kristof, "Save the Fat Cats," New York Times, October 1, 2008
Last night the Senate passed -- over the opposition of a full fourth of the body (25 senators) -- a "sweetened" version of the Paulson/House bill. FDIC insurance on depositors' accounts in banks would be raised from $100,000 to $250,000, and even more tax cuts are promised, among other things.
Think about it. More for the wealthy. How many of the 600,000 workers laid off this year will be helped by tax cuts? How many of your neighbors keep so much more than $100,000 in their checking account (and are so lazy or ignorant they haven't opened additional accounts elsewhere) that they really need the reassurance that it's guaranteed up to $250,000? Are House Republicans who voted for common sense (and their outraged constituents) really able to be bought with such tarnished coin?
And with the dollar continuing to drop, please explain to me how adding even more debt (from unfunded additional tax cuts) to our current national debt of $10 trillion, unfunded future obligations of $55 trillion, Iraq future costs of $2 trillion, and Paulson's added debts of $1.3 trillion, is going to make things better for future taxpayers.
There is even more reason to vote against the Senate's plan than there was to vote against the House proposal.
So where is my support from the nation's economists? Here it is. Some 200 of them, from some of the most prestigious public and private universities in the nation. I'll provide the link if you'd like to look for your own school, but my truncated listing of all the signers -- those whose last names begin with "A" or "B" -- will give you an indication of who's on board.
And what do they think of the Paulson proposal? Not much:
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwords.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
The online letter notes, "This letter was sent to Congress on Wed Sept 24 2008 regarding the Treasury plan as outlined on that date. It does not reflect all signatories views on subsequent plans or modifications of the bill."
Here is a link to the letter, where you will find the names and institutions of the signers as "updated at 9/27/2008 6:00PM CT."
Meanwhile, as promised, here's a sampling of the names and institutions -- those whose last names begin with "A" or "B":
Acemoglu Daron (Massachussets Institute of Technology)
Ackerberg Daniel (UCLA)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Ales Laurence (Carnegie Mellon University)
Alexis Marcus (Northwestern University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Baliga Sandeep (Northwestern University)
Banerjee Abhijit V. (Massachussets Institute of Technology)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Bartkus James R. (Xavier University of Louisiana)
Becker Charles M. (Duke University)
Becker Robert A. (Indiana University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Blank Emily (Howard University)
Boldrin Michele (Washington University)
Bollinger, Christopher R. (University of Kentucky)
Bossi, Luca (University of Miami)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J.(UCLA) . . .
Consistent with the concerns of these economists are those of Senator Russell Feingold:
“I will oppose the Wall Street bailout plan because though well intentioned, and certainly much improved over the administration’s original proposal, it remains deeply flawed. It fails to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression. The bailout legislation also fails to reform the flawed regulatory structure that permitted this crisis to arise in the first place. And it doesn’t do enough to address the root cause of the credit market collapse, namely the housing crisis. Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess.”
"Statement of U.S. Senator Russ Feingold On Opposing the Bailout," October 1, 2008.
For the objections of other senators in the coalition of opposition see, David M. Herszenhorn, "A Curious Coalition Opposed Bailout Bill," New York Times, October 2, 2008 ("Their concerns spanned a panorama of issues: frustration over the lack of long-term regulatory changes in the legislation; alarm that $700 billion in taxpayer money would be at risk; anger that the Treasury secretary would not be subject to more stringent oversight; skepticism that executives of firms that seek help would face limits on their pay; and dismay that such an important bill was being rushed through Congress. And, perhaps most pointedly, they expressed skepticism that the bailout proposal would be able to restore liquidity to the credit markets, prevent the collapse of additional banks and safeguard the economy from a long recession.").
There are those who say (to me, and to other critics of what Congress is doing), "Now look, I understand you're angry, that you don't like this plan. But we have to do something. You can't just oppose the only plan we have. If you don't like it so much, tell me what you think would be a better plan."
OK. And I'm about to tell you what would be a better plan.
But not before I observe that I don't really think that's my responsibility. I'm with the secretaries with more than one boss who post the sign on the wall, "Your failure to plan does not constitute my emergency." It's like the profligate friend who wants to borrow money "because otherwise the electricity is going to be cut off." And you're thinking, (a) why didn't you think about that when you engaged in that last excessively expensive bit of discretionary spending (or trip to the casino), and (b) why didn't you let me know this was coming more than the day before the shut-off is going to occur?
Those who will bear the burden of this Wall Street bailout did not create the problem. It's not their responsibility to come up with a solution.
But because they (and I) will continue to be berated by the perpetrators unless we solve it for them, here's an idea.
I.
It's not a theoretical, ivory tower approach. Not only did it work for another country -- it was actually the approach taken by Paulson with Fannie Mae, Freddie Mac and AIG! So please tell me: Why has he now suddenly abandoned this approach?
It's not as if no other country has ever dealt with a similar financial crisis, or that there is no other approach than that of Secretary Henry Paulson. The $700 billion we're talking about represents some 5% of our GDP. In 1992 Sweden put 4% of its GDP into its banks. (They had run into trouble for much the same reason as ours: "Financial deregulation in the 1980s fed a frenzy of real estate lending by Sweden’s banks, which did not worry enough about whether the value of their collateral might evaporate in tougher times," as the Times' Carter Dougherty reports, but they didn't use taxpayers' money to buy up "toxic debt." Dougherty continues:
Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.
Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well. . . .
[T]he final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated. . . .
A few American commentators have proposed that the United States government extract equity from banks as a price for their rescue. But it does not seem to be under serious consideration yet in the Bush administration or Congress.
The reason is not quite clear. The government has already swapped its sovereign guarantee for equity in Fannie Mae and Freddie Mac, the mortgage finance institutions, and the American International Group, the global insurance giant.
Putting taxpayers on the hook without anything in return could be a mistake, said Urban Backstrom, a senior Swedish finance ministry official at the time. “The public will not support a plan if you leave the former shareholders with anything,” he said. . . .
Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral.
Sweden told its banks to write down their losses promptly before coming to the state for recapitalization. . . .
Then came the imperative to bleed shareholders first. . . . Peter Wallenberg, at the time chairman of SEB, Sweden’s largest bank . . ., the scion of the country’s most famous family and steward of large chunks of its economy, heard that there would be no sacred cows.
The Wallenbergs turned around and arranged a recapitalization on their own, obviating the need for a bailout. SEB turned a profit the following year, 1993. . . .
[T]he agency had mostly fulfilled its hard-nosed mandate to drain share capital before injecting cash. When markets stabilized, the Swedish state then reaped the benefits by taking the banks public again.
Carter Dougherty, "Stopping a Financial Crisis, the Swedish Way," New York Times, September 22, 2008.
II.
Are you really going to try to convince me that there are no American "Wallenbergs" out there who might come up with similar solutions if they knew their share of the $700 billion would be accompanied by a loss of ownership? There is a "market" out there as well as taxpayer money. J.P. Morgan bought the failing Bear Stearns. "In the midst of the subprime crisis, Buffett said during a media interview in June that he sees investment opportunities in the subprime market." He just put $3 billion into General Electric. Bank of America bought Merrill Lynch when it was near bankruptcy. Wells Fargo just bought Wachovia. There have been others.
Maybe the market, alone, is not enough to pull us out of this. But shouldn't that option at least be exhausted before loading an additional $700 billion (or more) debt on our great grandchildren?
III.
Ireland has just come up with its own innovative approach (though not unprecedented, less satisfactory, and far more controversial), characterized by The Daily Telegraph as "the most dramatic and comprehensive bank bailout in Europe since the Scandinavian rescues of the early 1990s." The Irish Times, from which this quote comes, has published a summary of the response of many of the world's great newspapers to its government's essentially bank loan guarantee plan. "World View," Irish Times, October 2, 2008. For the Financial Times' take on what's going on in Ireland this week (as well as the British government's response) see Andrew Hill, "Guarantees Go Only So Far," Financial Times, October 2, 2008.
IV.
And Michael Moore (yes, that Michael Moore) has some solid suggestions among the ten in Michael Moore, "How to Fix the Wall Street Mess," October 1, 2008.
V.
Now I'm not about to join those "I'm still angry," PUMA, former-and-for-always Senator Hillary Clinton supporters and "go Republican" on you. But I've always been more interested in ideas than ideology, proposals than partisanship, and when I find a Republican with a better one I'm not afraid to say so.
Though I must say it gives me some sadness to have to say, this close to election day, that I think Dr. Mariannette Miller-Meeks, the Republican opponent of my Democratic Congressional Representative, Dave Loebsack, has the better position on the Wall Street bailout. See, on her Web site, "Congress Must Set Aside Politics, Address Root Causes of Financial Crisis," September 30, 2008.
Not only do I not support everything she says, I have to candidly acknowledge I don't even understand everything she says. But I understand and agree with most of it, and offer it in the context of this blog entry as, at a minimum, one more response to those who argue that no one is permitted to dislike the Paulson approach unless they can come up with some other alternative. Well, here is yet one more alternative.
"We need to quickly stabilize the financial system with the least cost to the taxpayers. . . .
She said Congress should remove language from Community Reinvestment Act that encouraged excessive risk-taking by Fannie Mae and Freddie Mac and authorized the development of bundled mortgage debt obligations creating this morass and passing the risk onto others. Miller-Meeks advocates temporarily suspending mark-to-market accounting so that banks can stabilize their accounts instead of writing down good loans that will be repaid in full.
"Home owners who are dutifully paying their mortgages on their primary home and have been honest in their application, should be protected with new mortgage product or stabilization of the housing prices. We should penalize those responsible for the losses and keep current executives in place without golden parachutes. Unfortunately, those who benefited most are already gone from those institutions," she said. . . .
Miller-Meeks said the federal government does have an appropriate role in the crisis, including purchasing some institutions and securities at fair market value and selling them at fair market value to the benefit of taxpayers. She believes all proceeds from the eventual sale of such assets should pay down the national debt or provide a tax dividend to taxpayers. . . .
"Steve King is absolutely right when he says doing 'something' is not enough; we have to do the right thing. That means we need to approve a plan so that Wall Street won't expect a bailout every time they make the wrong decisions," she said. "To paraphrase Martin Luther King, Jr., we can't afford socialism for the rich and raw capitalism for the rest of us. Unfortunately, David Loebsack doesn't seem to understand that or the real-world challenges facing the people he's supposed to represent."
Miller-Meeks favors allowing the Federal Deposit Insurance Corporation to ease capital requirement for banks so they can ride out the current credit crunch. She also believes the Securities and Exchange Commission should modify fair value accounting so assets aren't considered worthless during a market panic and instead can be valued on the basis of their true economic value. She also favors development of a plan to let private investors fund the bailout through guaranteed recovery bonds or to set up insurance programs to ensure Wall Street bankrolls its own recovery. . . .
So there you have it. There are better ways to deal with our financial problems, at a minimum there are alternative ways that should be fully explored before rushing down the dangerous path Congress has chosen, ways that consider the plight of the unemployed and homeowners, ways that promise a little greater likelihood of a return to taxpayers, ways that don't reward those who created the problem, and ways that don't perpetuate their inclination to make short-term greedy profit by putting long-term probable risk onto taxpayers.
The route the Senate -- and perhaps on Friday (October 3rd) the House -- are taking (particularly given their role in criminally removing regulation from the industry) is not necessary and is certainly not the only, inevitable, approach; it's just the despicable approach.
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October 1, 2008, 9:30 a.m., 1:00 p.m. (addition of report on Mike Hogan's accomplishments at UConn)
Mike Hogan is Alive and Very, Very Well
Mike Hogan is back in the news, and "in the hearts of his countrymen (and women)," at the same time a petition is being passed from UI faculty member to faculty member urging the reinstatement of former General Counsel Marc Mills. Brian Morelli, "UI professor petitioning to reinstate Mills," Iowa City Press-Citizen, October 1, 2008, p. A1; Amanda McClure and Kelli Shaffner, "Petition to reinstate Mills garners support from UI community" [in this morning's hard copy edition as "Mills Firing Irks Many"], The Daily Iowan, October 1, 2008, p. A1.
Mills, the University's former general counsel, was unceremoniously and peremptorily fired for . . . for . . . what exactly was he fired for? That's part of the problem. No one of us can look back on all of our actions and say there is absolutely nothing during our lifetimes that we might have done differently. But, at a minimum, it's hard to read his lengthy response to the Stolar Report's charges, and his explanation of his role (or absence of role) during the UI's handling of an alleged sexual assault last October 14 and find anything he did (alone or taken together) that would warrant such precipitous action. (And there has, of course, been no effort to show a pattern of mis-, mal- or nonfeasance over the past 20 years of his distinguished service to the University -- nor could there be). See generally, Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present.
It's caused many to look at other personnel decisions that don't seem to have made any more sense than this one. See, e.g., this morning's Russell Scott Valentino, "Advice to new VPs: Watch your backs, people," Iowa City Press-Citizen, October 1, 2008, p. A17.
But the story that caught my attention was Lauren Sieben, "Regent: No 2nd Thoughts," The Daily Iowan, September 26, 2008.
Former UI Provost Michael Hogan, who was denied the UI presidency in 2006, this week turned down a $100,000 bonus for exemplary service as the president of the University of Connecticut. . . .
Hogan declined the $100,000 bonus because of the state and school's struggling economic situation, and he asked that the money be given to the university's graduate program, the Associated Press reports.
Hogan served as UI provost from 2004 to 2007. He was a finalist in the UI presidential search in the fall of 2006, before the regents rejected all four finalists.
The regents called for a second presidential search in 2007, which cost the university roughly $200,000 and yielded then-Purdue Provost Sally Mason.
During the first search, Regent Robert Downer [noted] . . . that Hogan had been an "exemplary provost."
"I felt that he would have been an excellent president," Downer said. . . .
Members of the UI Faculty Senate and UI Student Government also were shocked and disappointed at the regents' decision to disband the search in 2006. The two groups passed "no-confidence" votes in November that year, a symbolic gesture of outrage.
Former Regent Amir Arbisser said Hogan received "very serious" consideration in the presidential search because of his prominence in the UI community, but [it was] . . . a "politically unpleasant" time.
"I think that it's a matter of sometimes throwing out the baby with the bath water," Arbisser said. "I think that people were looking for a completely new crew of candidates, not that [the] candidates we had looked at weren't excellent. . . ."
I didn't choose to post a comment regarding Mike Hogan to this story at the time (only a comment about the Daily Iowan's closing out the opportunity to put comments on two stories that day involving President Mason). What follows are excerpts from a random sampling from those Daily Iowan readers who did. The more severe criticisms of President Sally Mason have been deleted because (a) it is to everyone's interest that CEOs succeed, whether the president of our country or our university, (b) I don't think firing anybody is the answer to any problems the UI may have, and (c) this blog entry isn't about President Mason anyway, it is about (University of Connecticut) President Hogan.
Outrageous
posted 9/26/08 @ 10:00 AM CST
Didnt the regents say that the candidates were unqualified when they rejected a candidate that is vastly superior to our new president? Mason can't get a raise and Hogan turns down a bonus because of the economy. Dear Regents: you made a HUGE mistake. Your extreme negligence on this issue goes beyond any business judgment ruling that we would apply and the people of Iowa should get to recoup the losses you have inflicted from you personally.
Chris
posted 9/27/08 @ 5:41 PM CST
Why don't they just ditch Mason? . . .
Let's weigh the "evidence" on Mason:
[lengthy criticism of Mason follows, and then the comment concludes . . .]
And, the very sad reality -- we could have had Mike Hogan. He wanted the job and was imminently qualified and adored. Instead, he's at University of Connecticut, where he has just contributed his bonus BACK to the University. I guess the regents just could not tolerate a leader who has more intelligence, integrity, ability to lead, support, and intelligence than them.
At a minimum, they should see if Mike Hogan would come back as president, if they'd fire Mason, as would be appropriate in this situation. . . .
Similar, anonymous, comments were added to my blog entry, "Cleaning Up After the Party," September 26, 27, 2008.
Anonymous said...
I have several concerns: . . .
Instead of stepping up and taking responsibility, Mills and Jones are thrown under a bus. You can say that Jones may have had past problems, but where's the evidence that either he or Mills is responsible for the mishandling of this event?
Strike 3!
The bottom line is that the Regents have to justify hiring her over Mike Hogan. That's right -- Our first choice, who went off to better and brighter alternatives in Connecticut -- where, BTW, he just DONATED his $100k bonus back to the university.
Meanwhile, Mason, in a shadow of under-performance, receives an increment to her performance bonus.
How sad. Let's see about bringing back Hogan!
9/27/2008 06:11:00 PM
Anonymous said...
The regents didn't want Hogan because he could think for himself, just like Skorton did. The regents wanted someone too dumb to think for themselves, someone who had to be told how to think. That is, by her own account, why Mason fired Mills and Jones-- they weren't telling her what to think when she needed them to!
Looks like the regents got just what they wanted with this hire. How lucky for all of us.
9/27/2008 08:44:00 PM
Anonymous said...
I think you are right, anonymous-at-8:44PM. . . .
It's a little ironic that Amir Arbisser has come out in support of Mike Hogan at this point (according to the Daily Iowan). He voted against him as a presidential appointment. Yet, I have to respect his integrity for stepping up and admitting a mistake was made. . . .
--Signed, a once-proud faculty member
9/28/2008 07:55:00 AM
When Mike Hogan was here as our Provost you could probably have counted me as a "fan" -- though I was not a member of the Facebook "Hogan's Heroes" group. But I never worked with him on anything; in fact, I don't think I ever talked to him in his office about anything; and he made no decisions (of which I am aware) that affected me positively or negatively. So I claim no special knowledge.
Moreover, university administrators, like administrators of most institutions, are like judges. Most of the time their decisions mean that someone wins and someone loses. Those who "win" give no credit to the decider because, after all, they deserved to win, they were right and the other person wrong, and the decider only did what they ought to have done. Those who "lose" go away convinced the decider is either incompetent, corrupt or biased against them.
So I assume Hogan must have created his own detractors at our University; but my rough assessment is that, if so, they were far outnumbered by his fans -- including a good many regents.
Missing him, I decided to check out how he's been doing at Storrs, Connecticut. (Hopefully, it's unnecessary to add that I've had no contact with him, or anyone at his university, with regard to this blog entry, and I can only hope that if he ever sees it he won't be upset.)
Here's an editorial from the (University of Connecticut) The Daily Campus a couple weeks ago that provides a summary (Photo credit: Wikipedia; the dog in the picture is "Jonathan," the school mascot): Editorial, "Hogan's campus presence more than just a photo op," The Daily Campus, September 17, 2008:
Toward the end of former UConn President Philip Austin's tenure, a survey was taken asking students, faculty members and administrators what they would like to see in a future university president. The result of this survey was not surprising to most -- nearly unanimously, those connected with UConn were looking for a president who was a more visible member of the community.
To those who asked for a president they could connect with, someone who would be an active member of UConn's growing community, Michael Hogan has been the answer to their prayers.
In the year since President Hogan came to UConn, he has managed to make himself an integral part of the university on a multitude of levels. . . . He is an honorary member of a variety of fraternities and sororities on campus. His face graces the cover of the UConn dining handbook, replete with beekeeper hat to highlight UConn's efforts to use locally produced honey. It was Hogan who greeted parents on move-in day and Hogan who took the bus with students to football games. During sporting events, the president can typically be found in the student section and on Relay for Life he took laps around the track with student volunteers. . . .
He regularly eats meals in dining halls and is often approached by average students just to say hello. . . .
Students can often be seen waving at Hogan as he walks around campus, or shouting out his name at he passes by.
"Mike has made a very conscious effort to really get to know a lot of students. . . . I really run into him more informally around campus than I probably do formally, which says a lot," said USG President Ryan McHardy.
After years of being governed by a president who was rarely heard from directly and even more rarely seen around campus, UConn wanted a president who was a real person, someone they could connect with and who would be part of the community. In the year since President Hogan arrived in Storrs, that is exactly what we've received.
Not surprisingly, when it came time a couple of days ago for the paper to issue "Hogan's Report Card" they awarded him an "A" for "approachability." Editorial, "Hogan's Report Card: One Year in Review," The Daily Campus, September 26, 2008 ("'Mike,' as Hogan allows students to call him, is definitely a far cry from past presidents who liked to stay in their offices. Hogan walks around campus regularly, . . . seems to enjoy students' coming up and introducing themselves and generally makes time for small talk . . . and makes a discernible effort to reach us on our level.").
They also gave him a "B+" for fundraising, having "exceeded his goal of raising $55 million in new gifts . . . the second best performance in the university's history," and an "A-" for the "environment," among others (one A, one A-, two B+, and one B- -- contested by a student reader as far too low and unrealistic for his "political advocacy").
Mike Hogan's delightful blog -- which is called the "Pres Release" -- provides one reason for his environmental grade in a September 29 entry: "UConn has improved its rating from a year ago and is now listed as a “Campus Sustainability Leader” in the 2008-09 Green Report Card, which was released last week by the Sustainable Endowments Institute. . . . Only eight state public universities in the nation were rated higher than UConn and 12 others received the same overall rating, including several of our 'aspirational' peers: Cal-Berkeley, UVA, Wisconsin-Madison and Michigan."
He also blogs about his "Report Card":
I got my report card from the Daily Campus today. A solid A-/B+, depending on your grading scale. But of course this is before the upward adjustment for the usual grade inflation, which would probably convert the grade to an A+. So I’m very happy with the results. Besides, since I already have a good job I don’t have to worry about getting into a top-notch law school.
Looking at the Daily Campus, I got to thinking about my report cards in grade school when we would get marks like ‘Good,’ ‘Satisfactory,’ and ‘Unsatisfactory’ for our personal behavior. I was once in a class where the teacher asked us to make out our own report cards and explain the grades we gave ourselves. So I did that here, based on the cards I used to get. Here are the results:
I had to give myself an S- for General Deportment in my second twelve weeks because of getting too exuberant at a Women’s Basketball game in Gampel. But as you can see, I think I’m improving. I didn’t give myself any E’s (Excellent) since I can always do better. Besides, these are not adjusted for grade inflation!
The blog contains 17 entries for September alone, with lots of photos. In one he's pictured with the "UConn Marching Band’s clarinet section." He says, they "sent me this photo taken on the field after the Hofstra game. As I look at the picture, I’m not sure if that’s really me or if it’s another version of ‘Stand-Up Mike,’ that two-dimensional figure you might have seen around campus and last residing in Kevin Fahey’s office."
There is apparently something called "The Rock" on campus that appears to be literally an enormous rock that one is permitted to paint with birthday and other greetings.
There are his campaigns: "trayless dining" as a water conservation measure, the use of locally developed honey ("Honey Harvest" photos; "Dining Services harvested its first batch of honey from the hives they set up last spring . . ."), and the picnic he put on to promote graduate and professional education.
Some are his comments about UConn's academic achievements -- some EE and computer engineering students who've figured out how to send computer data as sound waves through water, or a faculty member with a sense of humor about her recently well-funded research on tape worms.
Some, like those of any blogger, describe his day: "This past weekend I took some time out from my usual work schedule to take in some UConn athletic events – it was a perfect weekend to be outside. I went to four games (football, softball, field hockey, men’s soccer) and we were 4-0 in those games."
And, of course, at a time when we're paying our football coach in the millions, putting an extra $30,000 into our UI president's "incentive package" (now $80,000), Wall Street executives are being permitted to keep their jobs and multi-million-dollar bonuses (rather than forcing their firms to go through bankruptcy, thereby requiring the executives to pay back the bonuses to the trustee in bankruptcy for creditors) as a "solution" to a problem these executives created for themselves and the global economy -- what a bright and shining moment it is to see someone, whose accomplishments have warranted a $100,000 bonus, turn that bonus back to his University because of the economic hard times.
You want class? That's class.
Class plus . . . impressive fundraising, serious academic accomplishment by faculty and students, mutual respect, a learning environment, coupled with a sense of fun and good humor with all. School just doesn't get much better than that.
All in all I'd say our Mike Hogan is doing all right on the east coast for an Iowa boy ("Born and raised in Waterloo, Iowa, Hogan earned his B.A. degree at the University of Northern Iowa, where he majored in English with minors in history and classics; his M.A. and Ph.D. degrees were conferred by The University of Iowa.").
I still miss him.
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