My column in last week’s Australian Financial Review was about the spreading crisis in financial markets. In the same week, we saw the first indication* that the crisis was spreading to the market for credit derivatives. The possibility of a full-scale financial crisis arising from these markets, which financial market bears have been talking about for years. Whereas the losses from sub-prime loans and related derivatives markets are likely to be in the hundreds of billions, the nominal volume of outstanding contracts in the credit derivatives markets is in the tens of trillions, and interest rate swaps are in hundreds of trillions.

Such amounts cannot possibly be repaid by anybody, so a breakdown in these markets would imply either wholesale bankruptcy or a government rescue involving the abrogation of existing contracts on a scale unprecedented in history. Either way, as noted in the article, large classes of financial assets, and the associated financial markets, may simply disappear. Hundreds of trillions of dollars in derivative contracts may be unwound, reversing the explosion of asset and transaction volumes over the three decades since the Bretton Woods system of financial controls broke down in the 1970s.
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Australian politics this year has been dominated by the incoming Rudd Labor government’s commitment to offer a formal apology to indigenous Australians for discriminatory laws and actions of the past, most notably the policy of removing children from their families, with the ultimate aim of assimilating them into the white population. The policy, later referred to as creating the “Stolen Generation” was directed mainly at mixed-race children, since it was assumed that the remnant population still living in their traditional lands would “die out” within a couple of generations.

The previous Prime Minister, John Howard, had resolutely resisted an apology and in particular the word “Sorry” and the issue was one of the focal points of the culture wars that went on under his leadership. Continued resistance to an apology was the main reason the Liberals (= conservatives) passed over their most able remaining figure, Malcolm Turnbull, who supported an apology, in favour of the amiable but ineffectual Brendan Nelson, who indicated opposition, but was ultimately forced by public pressure to change his view.

The apology was the first business of the newly elected Parliament this week, and received the unanimous support of the House of Representatives, though given with obvious reluctance on the part of some Liberals. All of Australia’s previous Prime Ministers, except Howard, were present, and the TV coverage (at 9am) drew over a million viewers.

Apologies for various kinds of past national actions have been debated in quite a few countries in recent years. Perhaps because we’ve been arguing over the question for a decade or more, or perhaps just because I’ve followed it more closely, the Australian debate seems to me to have clarified some of the general issues.

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Via Robert Farley“Scott Lemieux”:http://lefarkins.blogspot.com/2008/02/economics-writers-should-understand.html, I see that “noted economist”:http://marcambinder.theatlantic.com/archives/2007/08/dont_panic_megan_mcardle_is_he.php Megan McArdle “is arguing”:http://meganmcardle.theatlantic.com/archives/2008/02/tax_me_more_fund_raises_little.php that the fact that Virginians haven’t voluntarily contributed to a fund increasing government revenues implies that people don’t want higher taxes. [click to continue…]

“Moira Whelan”:http://www.democracyarsenal.org/2008/02/ohanlon-and-thi.html speculates on Mike O’Hanlon and ‘think tank sociology.’

Think tanks in DC are traditionally known as refugee camps for the out-of-office team of foreign policy wonks. There’s an expected turn over when new administrations come on as each team goes about grabbing “the best and the brightest” to fill their ranks. O’Hanlon has by now gotten the message that he’s burned his bridges with his Democratic friends. Those that like him personally even agree that he’s radioactive right now thanks to his avid support of Bush’s war strategy. So what’s a wonk to do? … one option is pre-positioning yourself for the future. By getting out there and going after the leading Democrats—people that some of his closest colleagues are actively supporting—is he lining himself up to say that he was critiquing the next Administration before it was cool? That would be worth it, because as I’ve mentioned before, there are three forms of currency in the think tank world that make you a valuable player: bringing in money, getting press, and getting called to testify. This strategy could certainly pay off in those categories over the next few months.

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The wacky world of software licensing visits my inbox:

The newest version of SPSS cannot leave the country according to our current licensing agreement and US Export laws. Additionally, graduate students are not legally allowed to work on laptops (regardless of ownership) that utilizes the university site license. As a result, we are imposing a hiatus on SPSS installations on laptops and on any system that will leave the country until this can be resolved. Anyone who is leaving the country with a UA laptop, please contact us to remove the software before you leave to ensure software licensing and export conditions are met.

They’re trying to fix this absurd state of affairs, but the Contracting Office apparently signed off on the original site-license agreement. If you’re using SPSS in the first place you need to reconsider your plan for your life, but still.

In a moment of search engine ennui, I typed this into the Google search box: whatever I’m looking for, I won’t find it here.

First up was the nutty Tom Cruise video excerpt where he raves about Scientologists as the only people who can really help at the scene of an accident. Then, bizarrely enough, came a 2002 White House press conference with Bush convivially avoiding answering questions about unilaterally attacking Iraq and making in-jokes to the supine press corps. Then, suitably enough, a piece called ‘why search sucks and you won’t fix it the way you think’.

On page 2 of the results I found Trent Raznor moaning about album sales and proposing a music tax for ISPs, then Larry Birkhead insisting he would not share custody of poor (literally) misbegotten Dannielynn. Then MediaMatters gave a bizarre insight into the American poltiical psyche when a discussion of Clinton supporters sliming Obama for his middle name and Muslim father segued into how men feel castrated by Hillary.

And after that the randomness got a bit samey. Google’s tailoring of results to geographic location meant that any non-bracketed query of commonly used words returns me a cornucopia of US-oriented flim flam. It reminds me of why we used to buy a British Sunday newspaper at home; to know what they really thought of us. When the papers caught on to the Irish market and started finessing their stories and cutting back on the anti-Irishry, I lost interest. Same with Google. If I wanted to know about nothing but celebrity gossip and political tittle tattle then I’d, well.., I’d read the same pointless echo-sheets I already do every day.

I was going to ask Google if I’ll ever find true love. Don’t think I’ll bother now.

“Sadly No!”:http://www.sadlyno.com/archives/8788.html links to this Glenn Reynolds “post”:http://instapundit.com/archives2/015333.php arguing that Barack Obama should condemn some anti-Semitic black pastor in Murfreesboro, Tennessee who claims to support Obama, because otherwise

Obama’s big appeal — I’m a black candidate who’s not like Al Sharpton! — will be a fraud

He admits in a later update that the accusation of fraud was a “bit strong.” Indeed. But apart from the very unpleasant implication that black politicians need to be in the business of proving that they’re not Al Sharpton, this kind of ‘you must condemn …’ demand is a well established rhetorical trope. As “John Protevi”:https://crookedtimber.org/2008/01/15/six-degrees-of-louis-farrakhan/#comment-224600 pointed out in the comments to a recent post, this “entry”:http://decentpedia.blogspot.com/2007/08/will-you-condemn-thon.html in the Encyclopedia of Decency provides a nice encapsulation, and should, I suggest, become the standard reference point for this kind of nonsense in future.

Will-You-Condemn-A-Thon
Sporting pursuit

Amusing internet pastime, in which several Decents quiz a pro-fascist, repeatedly demanding denunciation of a vast range of randomly-chosen murders, atrocities, war crimes and military actions in an increasingly hectoring tone.

“I agree, Guantanamo Bay is an affront to democratic ideals. But Will You Condemn Palestinian suicide attacks on Israeli restaurants?…

Yes, well, Do You Condemn Jihadist chlorine-bomb attacks?…

Okay, I knew you would be too sly to openly support such acts, but Will You Condemn terrorist attacks upon the American military?

What about the Battle of Teutoberg Forest, then, Will You Condemn that? …I see.

“Spencer Ackerman”:http://www.washingtonindependent.com/view/michael-ohanlon has a nice hit-job on Michael O’Hanlon at the _Washington Independent_ (which is rapidly becoming indispensable) which makes me wonder who the foreign policy community is that should be disavowing him.

Michael O’Hanlon is a Brookings Institution defense expert who doesn’t actually know anything about defense. He does, however, know how to be a reliable barometer of what very-slightly-left-of-center establishment types believe should be said about defense. … If anyone in the foreign-policy community respects O’Hanlon, I haven’t met him or her. … Today in the Wall Street Journal, O’Hanlon’s got yet another tendentious op-ed, in which he bravely subdues yet another straw man on the left. …Harder to understand is how the foreign-policy establishment doesn’t put him out to pasture.

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I have a post up at the Guardian blog on the general subject of it not being terribly practical to assume that if we all shout hard enough at the Chinese government, they will wave their Chinese magic wand and the Darfur crisis will go away. In the post, I unaccountably forgot to link to Alex Harrowell at Fistful of Euros, who inspired the post by reminding me that I held this view. I’m now correcting this (frankly the CT referral stream is probably a little less, shall we say, problematic[1] than the Comment is Free one). So let the circle-jerk be unbroken, etc. Sorry Alex.

In general, though, and I didn’t explore this enough because it would have looked like rambling, a lot of people seem to think that the Olympic Games is the most important thing in the world to China. How much do we think they really care about it going well? I mean, seriously, we are going to be hosting this thing in London soon, and if it really is true that major world governments regularly make massive shifts of geopolitical influence in order to avoid a few slightly embarrassing scenes at their opening ceremony, then I am rather worried about what the rest of the world might have planned for us.

[1] No, let’s say “insane”

Well I thought it was funny.

I’d be interested to know more about why the President of William and Mary was told that his contract wouldn’t be renewed; from what this “IHE story”:http://www.insidehighered.com/news/2008/02/13/nichol says, it sounds pretty terrible.

Gene R. Nichol resigned immediately Tuesday as president of the College of William & Mary, days after being told that his contract wouldn’t be renewed. In leaving Nichol issued a blunt attack on those alumni and conservatives who have sought his ouster, defended his stances in a series of controversial decisions, and accused board members of seeking to offer him a “substantial” sum of money to publicly state that he wasn’t losing his job for ideological reasons. … Even while defending the board’s conduct, the chair acknowledged the potential for the controversy to hurt the college by giving the impression (false, the chair said) that alumni or legislators can get a president canned at William & Mary. … the board voted days after some legislators urged the trustees to get rid of Nichol, citing his willingness to let a controversial art exhibit appear on campus. … Nichol … defended the right of students to play host to the exhibit. …substantial progress in efforts he started… to increase student aid, attract more diverse students, and hire a more diverse faculty. … state political leaders have focused much less on those issues than on the controversy that to many defined Nichol’s presidency — a dispute over a cross he had removed from a prominent campus building. Vocal alumni critics have been pushing for Nichol’s removal since the cross fracas started. They have been met by strong defenders, particularly among student leaders and some professors. … Nichol was accused of being hostile to religion, with critics going out of their way to tell reporters that he had done legal work for the American Civil Liberties Union, as if that would make his views clearly wrong.

From a recent Sotheby’s catalogue:

LOT 4141

MIDDLETON, CHRISTOPHER.

A REJOINDER TO MR. DOBB’S REPLY TO CAPTAIN MIDDLETON; IN WHICH IS EXPOS’D, BOTH HIS WILFUL AND REAL IGNORANCE OF TIDES; &C. HIS JESUITICAL PREVARICATIONS, EVASIONS, FALSITIES, AND FALSE REASONING; HIS AVOIDING TAKING NOTICE OF FACTS, FORMERLY DETECTED AND CHARGED UPON HIM AS INVENTIONS OF HIS OR HIS WITNESSES; THE CHARACTER OF THE LATTER, AND THE PRESENT VIEWS OF THE FORMER, WHICH GAVE RISE TO THE PRESENT DISPUTE. IN A WORD, AN UNPARALELLED DISINGENUITY, AND (TO MAKE USE OF A VERODOBBSICAL FLOWER OF RHETORIC) A GLARING IMPUDENCE, ARE SET IN A FAIR LIGHT. LONDON: M. COOPER, G. BRETT, R. AMEY, 1745

Estimate
2,000—3,000 GBP

“Matt Yglesias”:http://matthewyglesias.theatlantic.com/archives/2008/02/super_osama_kulfa_balls.php is amazed that you can buy a coconut-flavoured candy called ‘Super Osama Kulfa Balls’ in China. There’s worse to be found in every German supermarket that I’ve ever been in …

Adam Swift and I have just posted a short critical working paper at the Center for the Study of Social Justice website. It’s a response to papers in Ethics (July 2007) by Elizabeth Anderson and Debra Satz (both, I’m afraid, behind a paywall, though I notice that the free sample issue is the one with Adam’s and my paper on parents rights, so I can’t resist encouraging people to read that), both arguing for a principle of educational adequacy as the correct principle of educational justice. Before reading their papers I had thought of adequacy as a straightforward strategic retreat by educational progressives, a retreat that makes strategic sense in the US because many States have constitutional provisions that are plausibly interpreted as demanding adequacy for all (and litigation, not politics, is the most promising way forward). But both Satz and Anderson argue for adequacy on principled grounds; they think that educational equality is a misguided goal, and also that adequacy is a good goal. There’s a great deal of good stuff in both their papers, so I strongly recommend them (if you can get at them). Satz is especially good on what adequacy, understood the right way, demands for low-achieving children, whereas Anderson is especially good on what it demands for children bound for elites; basically, her argument is that an adequate education for them requires that they have a lot of interaction with children from other social backgrounds so that they are well prepared for their roles in the elites they will join (which are justified, in Rawlsian terms, by their tendency to benefit the less advantaged). Our paper doesn’t dispute the importance of adequacy as part of the picture, and an urgent one at that, but responds to their anti-equality arguments, showing that they depend on (wrongly) interpreting equality as the sole principle of educational justice (in fact it is one among several principles, and not necessarily the most important); but also arguing that adequacy does not offer the right guidance in some circumstances. Comments welcome.