Nationalization, that is. In this piece on doomsday scenarios for Fannie Mae and Freddie Mac (H/T Calculated Risk) the cutely named and quasi-private mortgage packagers and guarantors, Katie Benner says

So what might it look like if the government had to lend a hand? Outright nationalization is an unlikely option given that neither the current administration nor the presidential candidates could afford to support such a move in an election year.

but goes on to imply that the likely alternatives could be far more costly, citing a Standard & Poors estimate of a trillion dollar cost to taxpayers, and possible loss of the US government’s AAA rating. Agency ratings aren’ t reliable indicators, but the US government has been in the category of issuers who are assumed to be exempt from scrutiny. A change in this status would be a huge problem for a big debtor like the US.

Either a bailout or a nationalization of Fannie and Freddie would make the Northern Rock fiasco in the UK pale into insignificance. The Northern Rock case shows that a policy towards financial enterprises in which both failure and nationalization are regarded as unthinkable cannot be sustained. The shareholders of these companies have been happy to accept the higher returns associated with an implicit government guarantee and they should pay the price when the guarantee is needed.

Another question about relevant social science literature, before they revoke my posting privileges:

I spent a lot of time talking to BigCos and people in the Gummint who are evaluating social software. Evaluating Open Source tools poses a problem for them, because they are cheap, simple to set up, and easy to use. These characteristics  defeat the normal IT evaluation process, which is supposed to start with an RFP, take the Office of the CIO 9 months to review the available features, and another 6 months of deployment and training. Free, easy, and good confuses them, and ‘Just try it and see how it goes’ is actively upsetting.

Part of the problem is price signaling — how could a free weblog tool, say, be better than this Very Expensive Content Management System? Part of the problem is feature creep — how could more features not be better? Part of the problem is the imperative for control — the stupider you think your employees are, the more features you will need to constrain their ability to act. Part of the problem is trusting vendors more than your own IT staff, and so on.

And, in the way of these things, the overall effect of this is an unspoken institutional commitment to the expensive and mediocre, simply because alternatives that may be cheap but good are assumed not to exist, and because there are tight social bonds with the vendors who sold them the last round of expensive stuff.

I bring this up because one of my former students, a very smart guy who used to work for the Gummint and now consults for same, is observing this same thing in his current work, and I wonder if anyone has studied this problem — not just price signaling, but the whole constellation of organizational behavior that makes evaluating Open Source tools in comparison with closed source so problematic?

Here’s “a sentence”:http://www.economist.com/opinion/displaystory.cfm?story_id=11670314 from a leader in _The Economist_ :

bq. If Mr Brown had fattened the public finances during the good times, *as he should have done* [emphasis added] , then this [mounting a fiscal rescue package] would be no bad thing.

Now what Brown actually did during the good times was to invest in public services that had been underinvested in for decades: fixing the roof whilst the sun was shining. Maybe some of that money was unwisely spent (I don’t doubt it). Here’s what I’m interested in: did the _Economist_ call, back then, for the use of tax revenues to “fatten the public finances”? Or did they favour lower taxes?

Having handed in my tenure file, and gotten my book accepted (yay!), I’m now, for the first time in years, in a place where I can think about doing some really serious reading outside the topics of my research, while I wait for the results to come in on the first, and do copy preparation on the second. So I’m in the market for good books about American politics, society, and history to fill in some of the holes in my knowledge of same as a non-US native. What I’m looking for are interesting, intellectually rich, accounts of American politics, preferably with a minimum of boosterism. Less Doris Kearns Goodwin then, than _The Boys on the Bus._ I’m interested both in academic books with a general appeal and good popular histories with intellectual bite. I’m also happy to entertain suggestions for good fiction that touches on these subjects – first on my list is Peter Mathiessen’s “Shadow Country”:http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2FShadow-Country-Modern-Library-Matthiessen%2Fdp%2F0679640193%3Fie%3DUTF8%26s%3Dbooks%26qid%3D1215537418%26sr%3D8-1&tag=henryfarrell-20&linkCode=ur2&camp=1789&creative=9325 (I read one of the books that it’s based on, _Killing Mr. Watson_, years ago, and loved it). So please submit recommendations in comments. Up before I start on this list, I hope, my reviews of John McGowan on American liberalism and Dan Solove on reputation and the Internet.

I just finished Gregory Gibson’s “Hubert’s Freaks”:http://www.amazon.com/exec/obidos/ASIN/0151012334/junius-20 (subtitle “the rare book dealer, the Times Square talker and the lost photos of Diane Arbus”). It was one of those strange books which sounds interesting but then has you thinking you made a mistake in starting, but suddenly hooks you and has you reading to the end. Gibson tells three intertwined stories: first, that of Bob Langmuir, a neurotic Philadelphia-based antiquarian book-and-miscallaneous-stuff; second, more briefly, that of Diane Arbus, her career, her photographs, suicide and posthumous rise to cult status; and, uniting the other two, Hubert’s Museum, a Times Square freak show (complete with bogus African tribespeople, amputees, tattooed men &c.). Arbus had become involved with the people at Hubert’s in the 1960, and especially with the black couple known as Charlie and Woogie who ran the place, and had taken a whole bunch of pictures there. It is these pictures that Langmuir discovers chez another dealer, amid a pile of other paraphenalia. Part of Gibson’s story is Langmuir coming to terms with what he has, and then struggling to get the difficult (to understate the case considerably) Arbus estate to authenticate the material so that he can bring the pictures to market. But Langmuir is also an archivist of African-American history and he is fascinated by the people at Hubert’s and by the comprehensive phonetically-spelled diaries that Charlie kept for most of his life. Gibson does an excellent job of stitching the various narratives together and using them to evoke a strange and marginal side of America. In passing he gives us some interesting insights into how the market for art photography got started (a combination of scarcity of other art objects giving rise to a need for new outlets for the connoiseur’s passion and institutional hype from curators like John Szarkowski at MoMa and critics like Sontag).

(When I bought the book on a recommendation, I hadn’t realised that it had only recently come out. In fact the story is still short of a denoument as Okie, the Nigerian dealer from whom Langmuir bought the trunk, is suing on the grounds that he was somehow illicitly deprived of valuable items. Since _caveat vendor_ would seem to be to relevant principle for trades between dealers, and since Langmuir did the work of recognising the Arbus material and then establishing authenticity, it is hard to believe the Okie has a case. But where (possibly) millions of dollars are at stake, it is probably worth him trying it on. Pending resolution, the Hubert’s archive can’t be sold.)

I didn’t know him, although I did know and love his novels – Patrick Nielsen Hayden knew man and work both, and has “more of substance”:http://nielsenhayden.com/makinglight/archives/010413.html#010413 to say than I ever could. John Clute “reviewed”:http://www.scifi.com/sfw/books/column/sfw18985.html his most recent book a couple of weeks ago, and quoted a poem that he published in the _Paris Review,_ “The Moon on the Crest of the New-Fallen Snow.” I liked it a lot.

Pain

Has its place—and pity, too—but it is not here.
Here all is calm and cold and luminous.
The snow has smoothed over the tracks of the deer.

On the basis of not paying particularly close attention but listening to what Australian friends had to say, I’d formed a generally positive impression of Australian PM Kevin Rudd. Now I see that Rudd has been stupid enough to “weigh”:http://news.bbc.co.uk/1/hi/world/asia-pacific/7492579.stm into “a controversy”:http://www.theaustralian.news.com.au/story/0,25197,23979363-601,00.html about the artistic depiction of child nudity with the following comment:

bq. “Frankly, I can’t stand this stuff …. We’re talking about the innocence of little children here. A little child cannot answer for themselves about whether they wish to be depicted in this way.”

I can’t wait for the Australian government’s prosposals for banning the appearance of child actors in soap operas and TV advertising on similar “couldn’t consent to thus being depicted” grounds!

The image in question can be seen “here”:http://www.artmonthly.org.au/ . (Perfectly safe for work in my opinion, but what do I know.) Chillingly, “Officials have said they will review the magazine’s public funding.” Of course there may be questions about whether art magazines should be publicly funded at all, but if they are to be, then this seems an crazy reason to withdraw the case.

(Incidentally, a relative of mine works with someone who was on the front cover of Led Zeppelin’s _Houses of the Holy_, no doubt the Australian Childhood Foundation would have been up in arms about that too on the grounds of possible “psychological effects in later years” — there don’t seem to be any.)

“Matt Yglesias”:http://matthewyglesias.theatlantic.com/archives/2008/07/contingency_irony_patriotism.php on patriotism:

American liberals and American conservatives are both Americans so our American patriotism is very similar. We just have different ideas about politics. Specifically, I would say that liberals do a better job of recognizing that much as we may love America there’s something arbitrary about it — we’re just so happen to be Americans whereas other people are Canadians or Mexicans or French or Russian or what have you. The conservative view is more like those Bill Simmons columns where not only is he extolling the virtues of this or that Boston sports team or moment, but he seems to genuinely not understand why other people don’t see it that way. But of course Simmons is from Boston and others of us aren’t.

By coincidence, this is something I’ve been thinking about the last few days (as I’m not a political theorist, I offer no guarantees whatsoever that my thoughts on the topic are original, or that they haven’t already been comprehensively refuted by someone somewhere). My best guess approximation is that even if we accept that patriotism/loyalty-to-our-sports-team or whatever is in some absolute sense _contingent_ (if we grew up elsewhere, we would be patriotic about a different country, or root for a different sports team) it doesn’t imply that there is something wrong or silly about being patriotic. Here, a good analogy might be with our love for our children. That I have one child, and not another is contingent, given the realities of biology, on a very improbable event – that two particular cells fused together (the odds against a particular combination of cells being chosen are surely in the order of billions to one). Yet once I have a child, my love for that child isn’t in the least invalidated by the contingency of the event, even if I know in some abstract sense that I would equally love another child that might have been conceived if a different pair of cells had combined. Moreover, we would think that there was something very strange about somebody who wanted to revisit that moment of combination and choose a different outcome.

I’m not sure how far the analogy can be pushed, and I am sure that there are other good arguments against patriotism (George Kateb’s book on the topic has been sitting unread on my shelf the last couple of years, causing me occasional moments of guilt). But it gets at a slightly different critique of certain kinds of vainglorious patriotism than the one that Matt presents. Nearly all parents are quietly sure that while all children are wonderful, _their_ children are the most wonderful of all. But equally so, most people find parents who insist on blowing their childrens’ trumpets, insisting on their unique skills, intelligence etc to be both silly and obnoxious. Perhaps we should have the same attitude towards the more overblown forms of braggart patriotism.

Update: “Siva”:http://mediamatters.org/altercation/200807030006#2 has some interesting thoughts on patriotism as a second generation immigrant.

It doesn’t appear to have been covered yet by any US news sources, so I just thought I’d link to this story reporting that, in the 60s, the US military proposed to test nerve gases (Sarin and VX) on Australian troops, who were to be kept in the dark on what was going on. Amazingly, given our generally supine attitude in such matters, the conservative Australian government of the day refused.

I’ve had this post in mind for quite a while, and never got in finished to my satisfaction, but it’s been stimulated to a significant extent by reading Clay Shirky, so I thought I’d pop it up now, somewhat half-baked while he’s visiting here at CT.

I’ve updated it a bit, incorporating some comments and responding to others

The biggest single question in political economy is whether and to what extent we can achieve social equality without sacrificing other goods like liberty and prosperity. Neoclassical economics (a project in which I’m a participant) begins with models which imply that, with competitive markets, all factors of production will earn their marginal product. This in turn implies that any intervention that shifts wages or returns to capital away from their marginal product must imply a loss in aggregate income.

There are all sorts of problems with this result, and particularly with simple-minded applications of it, which are legion. For a start, it can only ever be true at the margin – everyone in a modern economy depends for their income on the centuries of effort that have gone into creating that economy. There are also plenty of technical issues which have been debated for a long time, such as the famous capital controversy. I’m particularly interested with questions relating to whether the standard result, derived under the assumption of certainty and perfect information, works under conditions of uncertainty (in my view, much of the activity of the social democratic welfare state can be explained as a form of collective risk management).

Still, in an economy that fits the standard model of lots of competing firms, all operating in a region where constant returns to scale apply, the standard neoclassical analysis has considerable force. But the growing part of the economy centred on the Internet doesn’t fit this model at all. The Internet is a network and the economies of networks are different, in critical ways, from those of the standard neoclassical model.
[click to continue…]

I am rushing off to meetings, but this is disturbing news and I figured folks around here would want to know about it/have an interest in discussing it.

From the Electronic Frontier Foundation by Kurt Opsahl (posted July 2nd):

Yesterday, in the Viacom v. Google litigation, the federal court for the Southern District of New York ordered Google to produce to Viacom (over Google’s objections):

all data from the Logging database concerning each time a YouTube video has been viewed on the YouTube website or through embedding on a third-party website

The court’s order grants Viacom’s request and erroneously ignores the protections of the federal Video Privacy Protection Act (VPPA), and threatens to expose deeply private information about what videos are watched by YouTube users. The VPPA passed after a newspaper disclosed Supreme Court nominee Robert Bork’s video rental records. As Congress recognized, your selection of videos to watch is deeply personal and deserves the strongest protection.

Rest of EFF post

Various MSM sources are just starting to roll out their own coverage (e.g., BBC).

I guess those – must be many – who watch YouTube without a user ID or without logging in to the service have less to lose, but forget the privacy of the more avid and loyal users.

As to the source code, Google does get to keep that. It’s interesting to see which news item (the user ID issue vs source code) is being covered where.

For a long time, I’ve used the term “delusionist” rather than “sceptic” to describe those who reject mainstream science on global warming. In general, the term “sceptic” is inappropriate for members of this group, since their position is hardly ever based on a willingness to look sceptically at evidence without reliance on a preconceived views. Rather the dominant characteristic is wishful thinking based on perceived political implications. The gullibility with which so many delusionists parrot the latest talking points (“Hockey stick broken!”, “Global warming on Mars”, Warming stopped in 1998″ and so on) is clearly incompatible with any kind of scepticism.

Given the volume of evidence that has accumulated on the issue, only an adherent of some very strong form of scepticism could reasonably remain undecided. Such a sceptic has now appeared in the form of Adam Shand, an Australian program on global warming “it’s only an assumption” that summer is warmer than winter. I imagine he gets great prices on ski holidays, by going in January.*

Of course, once you’ve gone this far in scepticism, why not go the whole hog? Radical scepticism provides the perfect argument for rejecting action to mitigate global warming – if we have no reason to believe in the existence of the external world, then trashing it can’t be a problem, can it?

* Northern hemisphere readers can make the necessary adjustments.

I once said that work on social software formed the experimental wing of political philosophy. I said it to a room full of geeks, not philosophers, by way of exhorting them to consider social ramifications of seemingly technological choices, such as “If you have a point system for good behavior, people will behave to optimize points, not to be good.” (cf. John Quiggans’ post on grades.)

Behind the basic point of this throwaway line, though, is something that has been puzzling me for some time. Like all groups with shared pursuit of shared goals, mediated groups need governance, which is to say rules for losing. It has to be the case that at least some participants in a group are willing to regard not getting their way as both legitimate and acceptable, or the groups would simply fork with every non-unanimous decision, and dividing groups with powers of two in the denominator would atomize even huge collectives after a handful of such decisions.

And so, several years ago, I began reading classics of social contract theory. After the initial excitement of seeing the similarities between Federalist Papers #10 and the Slashdot moderation system, though, I bumped into two key ways in which the arrangement of constitutions didn’t fit with the sort of rules for losing that are essential on the net.

The first is the concern, in recent centuries, about reining in majoritarian tyranny — preventing 50.1% of the polity from simply voting themselves into a permanent advantage over the other 49.9%.

This is something of a concern online, but its also clear that the really novel threat to group action in mediated fora is the tyranny of the individual. Even in systems not constructed around consensus, one or a small group of people determined to upset the proceedings can do enormous damage.

The second is the concern, at the center of the debate since Hobbes, about how leaders are to be legitimated, and under what circumstances, if any, they can be removed and replaced. This concern seems to stem in large part from physical and political facts — to a first approximation, each person is a citizen of one and only one country, and can’t readily switch citizenship should they object to the policies of that country. In the troika of exit, voice and loyalty, much political theory assumes that exiting is off the table for most people.

Online, though, inflexible one-to-one mappings of member to group are rare. One can contribute to Apache _and_ Linux, comment on MeFi _and_ BoingBoing, and so on. Indeed, the two most normal cases of governance on the net are the cabal (there is no cabal) and benevolent dictatorship, as with Linus and Linux or Guido of Python, whose acronymed title, BDFL, stands for “Benevolent Dictator For Life.” What keeps these dictators benevolent is precisely that membership in various groups is non-exclusive, and switching allegiances is under the user’s control, with no analog for rules of state.

So what I want to ask of the collected wisdom of CT readers is this: what one or two works would you pick, from any discipline, that best illuminate the group governance issues we see on the net, as different from political thought about the real world? (Mine would be Exit, Voice and Loyalty, and Logic of Collective Action.)