When is a first strike not a first strike?
When it's Anticipatory Retaliation.

April 29, 2005

Larry Johnson and the Numbers Game (Updated)

Demosophist

I had a brief debate with Larry Johnson on the Jawa Report last week, that was recently referenced by an article in Mother Jones Blog. I expanded on the issue briefly here. To summarize, my position has basically been that:

1. The inference that State is somehow avoiding empirical evidence related to its policies is not justified by what we know and what Larry has reported. It's more likely that they are just tired of confounding policy with a report whose only real value is in a fruitless advocacy conflict; and

2. That the increase in attacks, even if specified and counted correctly, is not a meaningful indicator of whether we are "making progress" in the War on Terror, though Larry insists the data demand some negative inference.

In addition, I also suggested:

3. That if the method used to identify a terrorist event were mis-specified, and that portion affected by the mis-specification was the one that increased during the period, or that more incidents are simply being reported (which is a commonplace issue with crime statistics) then we may not actually be looking at an increase. (It's unlikely that this has seriously distorted the numbers, but we haven't checked very carefully.)

But even if we concede that the numbers are largely correct and consistent with previous counts, there are numerous reasons why it may not be qualitatively a very good metric. In fact it appears to even include thwarted attacks, if they happen to kill or injure a small number of people. Should these thwarted attacks really be counted towards a lack of progress?

But regardless of whether we have a qualitatively good metric (and we almost certainly don't), we have probably mis-specified terrorist attacks relevant to the real status of the war, and that's the central issue.

If Armed Liberal is correct (and it appears he is) that 30% of the attacks were in Iraq, and Andrew Cochran is correct that almost half occurred in Kashmir (and that's not even in dispute), then what we have are two localized conflicts accounting for more than 75% of the attacks in 2004, both of which are being lost by the terrorists. (Pakistan and India are close to agreement over Kashmir.)

Just how does this translate into a "lack of progress?" Moreover, is Larry's conclusion that "... the news is not good for U.S. efforts to contain and reduce the threat of international terrorism" even relevant? I submit that the fact that he's a specialist may be clouding his perspective. The real issue is whether we're winning. Wouldn't that be the relevant "good news?" And what reason do we really have to doubt that we're winning?

Futhermore, consider that if we are indeed winning against a terrorist movement, that's just about the first time it has ever happened! Up until recently "asymmetric warfare" of the sort that targets civilians as a deliberate strategy, has been an enormously successful strategy. Thus, it's hardly surprising that a winning strategy may not look much like a walk in the park.

If we'd used the same sort of metric in WWII to gauge success or failure we'd have observed higher and higher losses with each passing year and a big jump at the Battle of the Bulge and Iwo Jima, which were when we actually began to close on the enemy. It was certainly "not good news" that we lost a lot of fine men on Iwo Jima, but what does that have to do with the crux of the matter? Would it have been better to leave the strategically important island in the hands of the Japanese?

Incidentally Princeton has a series of webcasts of its ongoing Colloquium on Public and International Affairs. If readers go to that link and scroll about halfway down the page there's a synopsis and several links to the video of a panel discussion entitled Measuring Success in Combating Terrorism. The speakers in that discussion include Larry Johnson, but they also include Raphael Perl from the Congressional Research Service and Peter Probst, a former CIA officer. It's an excellent panel, and well worth the time spent to view it.

My feeling is that if Larry Johnson had paid more attention to the other speakers on that panel, and especially Raphael Perl, we wouldn't be having this debate. Perl is especially eloquent about the fact that we don't currently have any metrics that can tell us not only whether, but the degree to which, we're winning. And we need them. To that extent I agree with Johnson, that the numbers are important. But I don't agree that these numbers tell us much.

One of the biggest deficiencies in our recording and analysis is that we have no measure of the "quality" of the attacks, nor do we even bother to sort them by scale. In fact, we often don't even distinguish between attacks that are carried out successfully and those that were pre-empted! But the greatest deficiency in our empirical analysis of the War Against Totalitarianism 3.0 is that in a war which is less about battles and casualties than intangible perceptions and attitudes, we don't bother to pay much attention to context.
Hence, we can look at an increase in the overall number of attacks and completely miss the salient fact that a vast majority of those incidents are taking place in locations where the terrorists are losing the war of ideas, and where the political situation is being resolved against their interests.

Update: Regarding the first part of Larry Johnson's Why the Numbers Matter. (I'll try to get to the rest when I have time.)

Q: What is the significance of the fact that in 1986 State was placed "in charge of coordinating the efforts of CIA, DOD, and FBI efforts [sic] to track and deal with terrorism," and the apparent inconsistency of Phil Zelikow's statement that it is the NCTC, rather than State, that was tasked with "analysis and integration of intelligence (data) on terrorism or counterterrorism" and would act as the "shared knowledge bank" on such data and analysis?

A: None. One is a managerial task while the other is a technical one.

Q: What is the significance of Phil Zelikow's apparent misstatement that State "traditionally compiled the data," when all it really did was the managerial function of coordination? The statement simply uses the word "compiled" instead of "published" in case you missed that.

A: It might be regarded as somewhat imprecise to substitute "compiled" for "published," but is it a strange or even erroneous conflation? In fact, one of the meanings in Webster's for "compile" is "to compose, out of materials from other documents." In fact that's the first meaning, and therefore the oldest! And isn't this essentially what they did? Only a specialist would tend to immediately conclude that the speaker was obfuscating the technical function of compiling raw data with that of publishing a finished report. Basically there's simply no case that Zelikow or Brennan misrepresented anything at all, so we don't even need to deal with the problem of asking whether a misrepresentation (that didn't happen) was intentional or inadvertent.

Additionally Larry contends that the move to compile and publish the data at the NCTC is "stovepiping" of the sort that the 9/11 report cautions against. If this is true then Zelikow and Brennan are simply lying about the statute-mandated technical function of the NCTC which is consistent with this "stove-piping." Is it plausible that they'd lie about that? Johnson doesn't even claim that they did. So what's the sense of his argument? Why is he even making it?

I'm not sure, but it seems that he's alarmed that the NCTC has usurped the task of "compiling the report" (in the publishing sense). What this has to do with stove-piping I don't know. Stove-piping is a process by which data, at a relatively raw level of development, is usurped or diverted to be interpreted by analysts at the executive level, presumably without the proper training. So what does this have to do with usurping the compilation of the report? Even if this was happening in some illegitimate sense, it's not stove-piping, because it's a matter of the technical people interpreting the data they're responsible for analyzing. They're doing what they're supposed to do.

And it may serve to point out that although one could use the compositional function of pulling together data to "back-coordinate" the sources of those data, which would be instrumental to the managerial function, it's but one way to skin that cat. Is NCTC usurping a managerial function that ought to be performed by state. (Note: Although this isn't stove-piping it would stlill be problematic.) Well, provided NCTC has the editors, writers, and technical advisors to make sense of the data they could not only do it, but in view of the increasing complexity of the mission, they'd probably do it better. As long as they aren't coordinating or formulating policy, they aren't doing anything untoward.

Q: What is the significance of the claim (fact?) that when the CIA shifted responsibility for counting terrorist incidents to the Terrorist Threat Integration Center (TTIC) (an interagency body ostensibly part of State's coordinative mission, established in 1986), the organization had only three part-time personnel assigned to the task?

A: Well for one thing, if true, it would mean that until the staff was increased, the number of incidents may have been undercounted. In that case the numbers in 2003 would not be comparable to the numbers in 2004, so its not valid to discuss a "trend." (Note that this was one of my original objections to taking these data too seriously.) But leading us to that conclusion would also count as an incentive for Brennan to lie about the number and status of people assigned to that task. Johnson, however, assures us that Brennan is telling the truth: "This process [the collaborative data checking between the NCTC and State] broke down when the responsibility for doing this [counting terrorist incidents] was shifted from CTC and put under Mr. Brennanís stewardship at the Terrorist Threat Integration Center in late 2003."

Are you dizzy yet? To regroup: the NCTC starts with responsibility for the technical function of counting the number of terrorist incidents, as part of its responsibility for the "analysis and integration of intelligence" function. This technical function was moved to the interagency organization, the TTIC, in 2003 and quickly fumbled. John Brennan, however, is the head of both the TTIC and the NCTC, so unless these were serial appointments (which is something I don't know) he's simultaneously the head of the organization that supposedly did a stellar job pre-2003 and the organization that fumbled the ball in 2003. The TTIC was supposedly under the purview of State according to its 1986 directive and is headed by the same person as the NCTC: John Brennan. At this point I seem to have dropped my compass, and am badly in need of a GPS fix. The TTIC seems to have both a technical and managerial/executive function, which may explain why it was a bit dysfunctional.

And unfortunately (or fortunately, depending on your point of view) the Homeland Security Act has stepped in to blur these boundaries even further. Is it any wonder that the TTIC's responsibility has, again, been superceded by the NCTC (as the TTIC's website announces) where it resided prior to 2003, and where even Larry Johnson claims a good job was done?

Now it's true that Larry chides Brennan's management of the NCTC a bit for requiring 10 employees to keep track of 650 terrorist incidents in 2004, but the issue isn't so much whether they were overstaffed as whether the TTIC was understaffed in 2003. Larry has hold of the wrong end of that telescope. And the bottom line is that it's quite possible they were understaffed. At least, Brennan is accurately representing the staffing they had even though that fact tends to reflect badly on him. Anyway, Johnson observes that the magnitude of the number of terrorist incidents is comparable to counts produced by other sources, so they probably aren't wildly off the mark. If Brennan was attempting to give the impression that the 2003 count was low that's probably misleading, but that lets him off the hook for incompetence in running the TTIC understaffed. And the fact that the numbers are comparable doen't really rescue the metric itself from irrelevance. So the number increased. What does that mean? It means we haven't yet defeated the enemy. It doen't mean we aren't winning.

If you see something irregular either in the decision to move responsibility back to the NCTC or anything else, please tell me. As far as I can tell it all makes perfect sense. If there was an organizational or managerial error it was in moving responsibility for the technical function to the TTIC to begin with. But I imagine that was just one of those "coordinative experiments" that didn't work out.

We certainly need to see better performance from these guys, and we also need to see them build some more useful metrics for keeping track of the WoT and how we're fairing in that conflict. But I don't see anything that indicts this administration, or that suggests we aren't making progress in the WoT. Let's keep our focus, shall we?

(Cross-posted by Demosophist to Demosophia and The Jawa Report)

Launched by Demosophist at 06:40 PM | Retaliatory Launches Detected (2)

April 13, 2005

Who Is Jean R. Cobbs? The Vegetative McCarthyism of the Left

Demosophist

Virginia State University is an historically black institution located in central Virginia, just south of Richmond. It was originally established as part of the extensive land grant system of higher education that was set up across the country in the late 19th Century under the Morrill Act. To get right to the point, the university is currently administered in a manner that would probably make the Tweed administration look principled by comparison. Cronyism and nepotism are the rule rather than the exception. Many of the administrators have little academic or even managerial credibility, and the current President, a fellow named Eddie Moore, Jr., has been in charge since 1993. As an example of how the institution is run the VP/Provost, W. Eric Thomas, managed to wrangle an appointment for his live-in girlfriend as head of the nursing program, a person with no advanced degree in nursing.

Dr. Jean R. Cobbs is a renowned sociologist and venerable member of the faculty at Virginia State University, with over 30 years of experience. Her area of expertise is in Social Services, where she has taught and served as chair of a department that she created and for which she won accreditation. She has an Ed.D. from William & Mary, is on the State Board of Social Services, is a member of the advisory board of the Virginia Center on Aging, and is also chair the Human Subjects Committee. She has an exemplary record of teaching and scholarship. Her primary liability is that she's a conservative black woman.

Early in his administration President Eddie Moore, Jr. decided that a defining aspect of his mission was to rid the university of as many black conservative tenured professors as possible, so began a long and perverse history of persecution of Jean Cobbs. Initially she was removed as chairman of the department that she created and developed, replaced by someone without comparable credentials. During a period in which her husband was suffering from a lingering terminal illness she took a short leave to care for him, and subsequently received an "unsatisfactory" review, a manufactured opening that Eddie Moore was prepared to pounce upon in order to advance his mission. In spite of the fact that the institutional rules allowed her an appeal (which would have overturned a patently inaccurate and unfair review) no appeal was ever granted. Jean Cobbs was subsequently fired from the university, after a long period of harassment.

And it gets worse.

In a fit of vindictiveness that puts the whining about "new McCarthyism," by people like Bernardine Dohrn, or the treatment of plagiarizing ethnic and professional frauds like Ward Churchill, in "interesting perspective" Virginia State University informed the Virginia Retirement System that after 33 years of service Professor Cobbs ought to lose all her benefits. This, under a clause holding that employees fired for "moral turpitude" are subject to such a denial. According to a faculty member at VSU who supports Professor Cobbs, this sort of treatment is generally reserved for convicted felons. Specifically, she was fired, without appeal and without any specification, for "unprofessional conduct:" almost certainly a euphemism for supporting conservative candidates for public office and testifying against President Moore in federal court. The institution continues to refuse requests for specific reasons for her firing, essentially because there are none that would hold up to any scrutiny.

And it gets even worse!

The Provost, W. Eric Thomas, who is directly responsible for firing Jean Cobbs in December, 2004, has managed to ensconce his uncredentialed but no doubt winsome girlfriend in the position formerly held by Professor Cobbs!

The American Association of University Professors is reviewing the situation, and could impose sanctions on Virginia State. If it viewed the situations at VSU and CU from a neutral perspective there's no doubt that they'd be compelled to impose sanctions. If they did, it would no doubt improve conditions not only for Jean (especially her shattered self-esteem, not to mention her financial well-being) but also for many of the remaining conservative faculty at VSU, who feel themselves under siege. It would therefore not be inappropriate to write or email the AAUP regarding the circumstances at VSU, urging a thorough and impartial review. However, remember to couch such a letter in professional terms, since indiscriminate railing could conceivably do more harm than good.

Update: The National Association of Scholars has a press release on the Cobbs case here.

(Cross-posted by Demosophist to Demosophia and The Jawa Report)

Launched by Demosophist at 10:23 PM | Retaliatory Launches Detected (1)
Ľ Beekeeper Retaliates with: WHEN MORE WILL GET YOU LESS

April 11, 2005

Bernardine Dohrn Is A Law Professor???

Demosophist

Knock me over with a feather. I knew that Bernardine Dohrn had managed to escape long term imprisonment for her activities with the Weather Underground by cutting some sort of deal, but the fact that she's a law professor at Northwestern I find rather shocking. Anyway, Ms. Dohrn says that she doesn't support terrorism, which just means that she creatively defines her years with an overtly terrorist organization (not to mention her current sympathies) as some kind of warped public service:

The tone of Guy Benson's April 5 guest column, "Law Prof Owes Explanation," is the kind of poorly researched "new McCarthyism" so suddenly fashionable. The reporter says he is denied "both sides of the story," unable to get a "balanced assessment." He quotes my "assistant" and The New York Times quoting my "husband" and asks me to clarify his alleged comments. Since I speak publicly about the war in Iraq, racism, children's rights, international law and human rights, Benson and all NU students are welcome to be part of the regular give-and-take I enjoy with students, audiences and activists. To clarify, I have never endorsed terrorism, the use of violence to intimidate or coerce a civilian (or any other) population. I fought the illegal, immoral war against Vietnam and the organized terrorism of my government -- and I unequivocally oppose the terrorism of governments, individuals, and religious, political and irregular organizations. I believe we all have an obligation to speak up about what is being done in our name. -- Bernardine Dohrn, professor, School of Law (h/t LGF)

I just find it difficult to get my head around this, even though I used to folk dance with Alice Metzinger, before any of us knew she was really Katherine Anne Power. When did we cross the threshold where it became acceptable to hire an unrepentent terrorist to teach the new entrants to the legal profession, from which many of our legislators will be drawn? Does this culture have a death wish?

(Cross-posted by Demosophist to Demosophia, and The Jawa Report)

Launched by Demosophist at 06:08 AM | Retaliatory Launches Detected (3)

April 06, 2005

Noam Chomsky Was Right, There is a Media Bias

Rusty

When you sit right behind the 10 yard line, pretty much every play seems like it's on the other side of the field. Hence, when Noam Chomsky, who is far-left of even the farthest left Democrats (he calls himself an anarcho-syndicalist), says the Mainstream Media (MSM) is 'right-wing', he is really using the term to describe any one in favor of capitalism. To Noam Chomsky, Ted Kennedy is a raving right-wing lunatic. Ok, maybe not raving, but right-wing nonetheless.

It is therefore surprisig to most people that I am a big fan of Noam Chomsky & Edward S. Herman's General Propaganda Model as put forth their book Manufacturing Consent.

While Chomsky and Herman's theory was developed to show how corporations control the media for their own anti-democratic purposes, the same theory can also be used to explain all sorts of media biases. Cassandra (via Emperor Misha) has an interesting post on the subject, and does a great job in classifying media bias once it has hapened, but it lacks a theoretical causal underpinning.

When attempting to explain liberal media bias the Propaganda Model does not need any grand conspiracy as the causal mechanism. Instead, it relies on the every day mundane activities of the hiring and editorial process.

Further, the advent of blogging may eventually make this theory arcane. As media voices diversify, the number of actors responsible for making decisions increases. Bias becomes less a concern because the diversity of thes voices are all over the ideological spectrum.

Here are the main causal points of the Propaganda Model, in nutshell:

1) Selection of topics. Reporters, producers, and editors do not choose stories at random. Random selection of topics would, in theory, ensure some amount of fairness. But that's not how the real world works. Members of the media choose stories that interest them.

Since the major national news outlets, such as the NY Times, WaPo and the network television stations are staffed largely by Democrats, these outlets run stories of interest to their staff. The minor media outlets, such as local television and papers, take cues from the big boys of the media. That is, a great deal of the stories they think are 'important' are those that the media leaders think are important.

What the blogosphere brings to the table is a diversification of what is believed to be important. While many of us may take cues from bigger bloggers, the road works both ways. I can't tell you how many e-mails a day I get from other bloggers wanting me to link to one of their posts. You can be sure that Kos, Powerline, Instapundit, and Atrios aren't just posting randomly. They post what concerns them and many of these posts are inspired by what smaller blogs are talking about.

2) Distribution of concerns. Again, of the thousands of potential stories which might be covered, which ones are given space in a newspaper or time in a television program? A person must make that decision. Unless we think that editors, producers, and reporters are somehow immune from biases, then what becomes the 'big story' is what they think is a big story. But what is worthy news and what is not worthy news is completely subjective.

As shocking as it is to imagine, liberals and conservatives often have different concerns. Of course to Chomsky there is no difference between liberals and conservatives (they are all apologists for the powers of greedy capitalism), but for the rest of us, stuck somewhere mid-field, these differences are important.

The citizen journalist makes up his own mind about what is important and what is not. We are equally bias, but at least we do not pretend to some standard of neutrality.

3) Framing of issues. An overwhelming majority of MSM reports are factually correct. Rarely does the media get the facts wrong, and when they do they usually correct the error.

But facts without context are meaningless. How an issue is framed is often times much more important than the issue itself. And how we frame an issue is directly affected by our predispositions and worldview.

For instance, should a story on Social Security be framed as an issue of personal control over financial decisions, as an issue of macroecomic concerns about the debt, or as an issue of the general direction of social programs in the U.S.?

Issues must be framed through subjective criteria for this is exactly what makes us human. All animals can see facts, but only humans have the ability to make moral judgements about facts. To claim that the media somehow escape framing issues through their own moral constructs is to claim that they are no longer of the same species as the rest of us.

To make such a claim is to make them superhuman. The blogger makes no such claim.

4) Filtering of information. Again, which information goes in a story and which does not? This is a subjective call which will be affected by the decision makers own sense of what is important and what is not.

We in the blogosphere are no different. We filter information according to what we believe is important and what is not, what is wheat and what is chaff.

5) Emphasis and tone. Related to framing.

The Rachel Corrie case is illustrative. No one disputes the fact that Corrie was killed while protesting. But the tone and emphasis of the story is imporant in a number of different ways. Human rights activists killed by Israeli troops has one connotative meaning and is factually correct. Anti-American protester mistakingly runover by IDF tractor is also factually correct but carries a completely different sense.

Often times bloggers on one side of the ideological gap that divides the blogosphere cry that the other side has a post that is bias. The fact that all such accusations are completely correct makes such accusations meaningless. Of course they are biased. That is the nature of the business we are in.

What is different is not that we aren't biased, but that we admit that we are.

Well, most of us. Some of us are suffering under the illusion that we know reality as an epistemelogical fact. Those that differ from our characterization of reality are really liars or delusionals. But the biases of those that suffer from the affects of Marxism or Objectivism on the brain are easily seen by even the most immature reader.

No house of cards in the blogosphere waiting to fall. The blogospher is 52 pickup. A big mess.

6) Keeping debate within the bounds of acceptable premises. Chomsky and Herman emphasize here that reporters with what might be considered radical views are slowly weeded out. They may not be fired, but neither are they promoted. Their stories may also be heavily edited, seldom reach the front page or recieve much air time, and they may be given assignments of little interest for them. It is only journalists who play ball, so to speak, that find success in the media game.

It is this last point in which bloggers threaten the MSM the most. The diverse nature of the citizen journalist corps means that many more points of view are represented. It is much more difficult to weed out the more radical among us.

So does the Mainstream media have leftist bias? Nope. But that is largely because the left is far removed from the mainstream of American politics. Neither do they have a right-wing bias, unless you are like Chomsky and believe that all who support capitalism and its 'political superstructures' are right-wing.

What it does have is a liberal or Democratic partisan bias. This is easily explainable by Chomsky and Herman's Propaganda Model. In fact, the theory better explains a liberal bias than it does a conservative one because the majority of important figures in the MSM are Democrats.

The blogosphere, though, threatens the usefulness of Chomsky's theory as more and more citizens are able to affect editorial decision-making. While the media may become more explicitly partisan, it will entertain many more points of view as legitimate.

The only threat I see to this is the role of Google News. By weeding out news and opinion sites which they believe are unacceptable, they shape the content of what is read by millions of people each day. They represent a meta-filter for what is important and what is not important.

Then again, I might just be biased.

Cross-posted at The Jawa Report and Demosophia.

Launched by Rusty at 07:18 PM | Retaliatory Launches Detected (1)

April 05, 2005

Scooby-Doo Wherefore Art Thou?

Bravo Romeo Delta

Ok, both of my readers may ask, where, exactly the hell have I been?

Well, the first and most accessible thing is something that I've seen cross both Lilek's Bleat as well as van der Leun's American Digest in varying degrees. To wit:

Speaking of which: if nothing else, this entire affair has made me heartily sick of the very act of reading the Internet. Pardon my language, but I am simply goddamn sick of opinions, period. Right or wrong, well-reasoned or poorly expressed, snarky or solemn, I am tired of the lot of them, my own included. I'm tired of reading blogs and bulletin boards and noting that it's OK to joke about one dead person, perfectly fine to kick the Pope when he's about to give up the ghost, but a breach of human decency to be less than reverential about the passing of a comic who specialized in dope humor. That sort of thing is expected on the internet, but what makes me weary is the blogligation to have an opinion about it and bang it out so the whole world knows I stand four-square against bashing near-dead Popes

Past that there are some other things, a couple of which I'll deal with here.

Aside from being flat out tired about having opinions on everything, I am hitting a news saturation point pretty quickly. I'm hip deep in all of this all the time, and frankly the idea of writing some more about what I look at constantly is more than a tad bit repellant.

Additionally, I have been wrestling with the nature of blogging under a pseudonym. I think I may write an explanation about that relatively soon.

Finally (AND THIS IS THE IMPORTANT PART), I've been mulling over the idea of starting a multi-contributor blog of people who are, for the most part 'essayists', rather than more conventional bloggers. The golden rule is that one should shoot for no less than a post a day, but there are several, including Demosophia, Opinion8, and (notionally) AllahPundit, to name some of the exemplars of the type, who post less frequently but post deeper. As is the blog is a lousy format for once-a-week posting.

So what I am considering is a sort of 'blog-magazine' thing. A group blog by those who care to write infrequently, but more deeply than is typically done in the blog hothouse.

So, of course, your thoughts on the matter are greatly appreciated.

Launched by Bravo Romeo Delta at 06:11 PM | Retaliatory Launches Detected (3)

April 01, 2005

A New Muse Versus the Old Feminist Mystique

Demosophist

Wretchard claims that the intellect behind I Could Scream (a muse by the name of Dymphna) is not he. But whoever she is she helps put the "Club" in "Belmont." Describing the new blog's mission as "a different vision" he observes, with typical eloquence:

The concerns of NOW in relation to those of Muslim women occupy the same relative position as the worries of the characters in Seinfeld to those in rural Bangladesh.

(Cross-posted by Demosophist to Demosophia and The Jawa Report)

Launched by Demosophist at 02:10 PM | Retaliatory Launches Detected (0)

A Place Called "Wind"

Demosophist

From Todd Zywicki

As I have said before, this bill is at bottom about rewarding personal responsibility.

Spoken like someone who has always expected a steady wind at his back, and spent both stormy and windless days deeply sheltered.

Apparently the entities making the loans while practicing deceptive strategies to snare the "imprudent" deserve to have the rules waived for their imprudent extension of credit because they've achieved the special status of lovable con men. Meet the archetype of the species: Ward Churchill.

Gary Becker, on the other hand, suggests a self-referencial alternative to tweaking the bankruptcy system answering most of my objections to Zywicki's rather aloof and one-sided arguments:

Another approach that helps provide insurance is to encourage "equity" loans when human capital is the main collateral available. By equity loans I mean a system where creditors share in both the higher and lower earnings of debtors. So when earnings of a debtor are higher, the amount he or she pays back is greater than when their earnings are lower. This system is quite common in financing agricultural loans in poorer countries, as demonstrated by the research on loans in developing nations by Robert Townsend and others.

Since these type of loans already exist in poor nations with limited bookkeeping techniques and primitive commercial credit markets, there is no reason why they could not become more common in the richer nations, whether the US, Europe, or Japan. Debtors might have to submit tax forms that verify their incomes, the same way that these are required in obtaining student aid, Medicaid, and some other assistance.

The law might have to be written to encourage such equity loans. They may not always be feasible, but they are a more attractive method of "social" insurance than the bankruptcy system. They avoid a lot of litigation over assets, garnishment, and the like. In addition, those debtors doing better than expected automatically back pay more (sic), while those doing badly automatically pay back less, possibly nothing until they do better. This to me seems to be a much better way than tinkering with bankruptcy laws in meeting the legitimate needs of both creditors and debtors in an uncertain economic world.

The key here is "legitimate needs." There are obviously illegitimate needs as well as objectives that ought to be ruled out or discouraged by a credit system, and the Becker suggestion preserves continuity of the rule system for imprudent lenders and borrowers, while recognizing that the wind can be fickle.

(Cross-posted by Demosophist to Demosophia and The Jawa Report)

Launched by Demosophist at 06:35 AM | Retaliatory Launches Detected (0)

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