Why Tim Tebow Stinks

Ever since he's been starting for the Broncos, I've been insisting that Tim Tebow is a horrible quarterback.  Now, the media is all over how great Tebow is now, since the Broncos are 5-1 since he became the starter, compared to 1-4 before he became their guy.  But let's be clear-- the Broncos are winning despite Tebow, not because of him.  To figure out why, all you have to do is watch Tebow play.  And it's not unfair to say that the guy is awful.  The job of the quarterback is to complete passes and move his team down the field.  And Tim Tebow is in the discussion for the worst in the league at doing that.  He's had one game in which he's completed half of his passes.  For the season, he's completed 45%.  In the NFL, 55% is a bad completion percentage for your quarterback.  JaMarcus Russell is widely recognized as a massive bust.  For his career, he's completed 52% of his passes.  Tebow hasn't completed more than 50% of his passes in a single GAME.  But, you might say, Tebow can run.  Doesn't that have value? Well sure.  But this isn't college, where you can run the option.  Vince Young can run, too.  He was benched by the Titans and let go because the team wasn't moving the ball.  But Vince Young's completed 58% of his passes for his career.

Now, the nicest thing you can say about Tebow is that he doesn't throw interceptions.  And it's true-- he's only thrown 1 pick in 143 attempts.  But it goes a little deeper than that if you watch the games.  Tebow's only thrown 1 pick largely because he's so inaccurate, he doesn't just put the ball where his receiver can't get it-- he puts it where NO ONE can catch it.  Tebow's the quarterback who's not allowed to throw.  Which is a completely absurd concept-- it's the equivalent of an NBA point guard who isn't allowed to dribble.  Against the Chiefs, he completed TWO passes.  And they won.  They're second to last in the league in passing yards (to the Jags, who threw an overmatched rookie QB into the fire on a team with no line).  They lead the league in rushing, but are STILL 25th in the league in offense because Tebow's such a terrible passer.

Tebow defenders say two things.  First, that he's winning games.  And yeah, that's true.  But football's a team sport.  And he's actually got pretty good pieces around him.  The Broncos' offensive line is terrific (as I mentioned, they're leading the league in rushing).  Their defense, led by rookie stud Von Miller (who wears sweet hipster glasses; see pic below) has really stepped it up lately.  And the teams they've been playing just aren't particularly good (the only good team they played was the Lions; they got run out of the building).  The offense, since Tebow took over, is actually playing worse.  We can exclude the first Chargers game (since both QBs played). The 4 games before that, the Broncos scored 20 or more points 3 times.  Since then, they've scored more than 20 points once.  And that included a one-play drive that was a touchdown run and a punt return for a touchdown.  The defense has also been much better.  In the first 5 games, they allowed fewer than 20 points once.  In the last 6, they've allowed more than 20 twice (and one of those wouldn't have gotten to 20 if it hadn't been for a Denver turnover handing Oakland the ball on the Denver 15).  In the last 3 games, they've allowed 10, 13, and 13.  So the defense has really stepped it up.

                                               Von Miller, Superstud

The other defense Tebow loyalists have is that he just "wills his team to victory."  Well that's stupid.  By that standard, Rudy was a great player because he made everyone else at Notre Dame work harder.  At the end of the day, being "inspiring" is great if you're a good player.  If you stink, it doesn't go very far.  And if guys aren't giving 100% when someone else is playing quarterback, when those guys are professional athletes, well, they're not earning their paychecks.  So let's be clear-- Tim Tebow is a terrible football player.  If the Broncos want to be a player, they should be pushing to replace him.  Of course, it's possible to win despite your quarterback-- the Bears went to the Super Bowl with Rex Grossman under center (though it's unfair to compare Grossman to Tebow; Rex might be a turnover machine, but, unlike Tebow, he can move the ball); the Ravens won it with Trent Dilfer as their starter.  But no one in their right mind thinks those teams were winning because of their QBs.

So let's be real-- Tim Tebow is a terrible QB who the media is making a big deal of because he was a Boy Scout and is on a team that's winning despite him stinking it up.

Bringing your fire extinguisher to Noah's Flood

In a development that I definitely didn't expect, Germany had a disastrous debt auction today, driving its borrowing costs up over 2% for its 10-year notes.  I think this reflects, above all else, an extreme vote of no confidence in the European Central Bank by the market.  My mode of thinking about the European crisis had been of the ECB as an extremely deficit hawkish appendage of the Bundesbank.  That is, it set monetary policy based exclusively on developments in Europe's biggest economy, Germany.  I saw the crisis driven, in large part, by the ECB's stubborn refusal to accept marginally higher inflation in Germany in order to ease the burdens of deflation in the peripheral countries.  In the case of an asymmetrical shock, like the one that struck when Greece went bust and Spain and Ireland's property bubbles burst, those countries needed wages and prices to fall relative to the rest of Europe's in order to restore export competitiveness and allow them to essentially export their way out of trouble.  But, absent higher inflation in the core countries like Germany, this would mean lower nominal wages and prices in the periphery, which in turn would make those countries' real debt burdens higher (not to mention bring on a massive deflationary recession that would cause huge suffering).

In this model, I expected spreads between German and peripheral sovereign debt to widen until those countries were forced out of the Euro.  The widening spreads make sense because, in the case of a Euro collapse, the new drachma and new peso would be revalued at substantially less than the deutschemark.  However, that development in turn means that Germany's borrowing costs shouldn't rise, since investors would see their bonds appreciate rather than depreciate if they were revalued in deutschemarks, provided Germany doesn't default.

I think what the failed auction reflects, though, is one of two things.  The first is the possibility that Germany might opt to take on the liabilities of the peripheral countries, which would put substantial fiscal pressure on the Germans.  However, I think that's unlikely-- with a cooperative central bank, a one-time addition of debt could be alleviated with steady growth, provided it wasn't choked off by the central bank.  Which is, I think where the heart of the problem lies.  The ECB is hawkish to the extreme on inflation; if it sees a possibility of inflation, it raises rates.  Which is a huge problem when economic growth Euro-wide is stagnant and there's mass unemployment.  I think the fear is even contraction in Germany wouldn't lead the ECB to raise rates, out of its misguided inflationary fears.  Then, in a collapse, their further misguided fear of inflation would keep them from acting.  This still doesn't explain the German borrowing problem-- even in a Euro collapse, their debts would get paid off-- but I think it may just be markets' fear of anything having to do with the Euro that's driving them away from German bunds.

To use a metaphor I really like, the ECB is the fireman who shows up to Noah's flood with his fire extinguisher and gets swept away.  To use Paul Krugman's (probably superior) characterization, the ECB is determined to cast itself as the highly credible defender of the value of a currency that no longer exists.

On Inequality

Larry Summers has a very good piece in the Financial Times about inequality which is worth taking a look at.  What it shows is that the Occupy Wall Street folks, if nothing else, started what will hopefully become a valuable discussion about the harm that comes from inequality.  On the whole, my feelings about OWS are mixed.  On the one hand, the more specific they get, the less coherent anything they say becomes.  The people down there range from those who think giving Manhattan back to Native Americans is a great idea, to those who oppose wearing fur, to those who think we'd be better off with no financial system.  Needless to say, when it comes to solutions to problems, or crafting a coherent message, they come up just a little bit short.  Not to mention some of the protesters' aversion to showers and their love of conspiracy theories turns me off.  On the other hand, broadly speaking, they've touched on a vitally important problem in America, and started a discussion that will hopefully lead to some tangible positive change.  The reality is that we do have some serious problems-- for the last 30 years, the lives of the average American haven't improved-- wages have stagnated, resulting in an explosion in the level of debt, and, while Wall Street titans have pocketed fortunes while bringing the financial system (and the national economy) to its knees, average people have been left behind.

They've succeeded in sparking a counter-movement whose members have succeeded only in inadvertently underscoring the broader point of the OWS people.  Typically, the counter-protestors have countered in two ways: 1) The "dirty hippies" need to go get a job, and 2) Something along the lines of, "Look at me! My life stinks, but I'm not complaining, so you shouldn't either."  Any amount of thought on these responses just underscores two points.  First, we've had unemployment averaging around 9% for 3 years now.  Getting a job is tough, and not because twice as many people suddenly became really really lazy, or all the jobs found really good hiding places in the woods.  Something's wrong, and it's not government suddenly getting in the way and regulating everything.  Second, the people underscoring how bad things are for them, or how hard they had to work to earn modest success just begs a simple question-- do we really want to live in a society where finding a job, any job, is a triumph, and where a whole lot of previously middle class people have to fight day by day to meet their most basic needs?

Opponents of this view argue that it doesn't matter if we have inequality, so long as the possibility to get rich is available to anyone.  Even if that were true (it isn't: studies show "socialist" Europe has more class mobility than the US), do we really want a society where 1% (or, more accurately in the US, 0.1%) of people get fantastically wealthy while the rest struggle?  I think some people have the perplexing idea that what made the US great was the fact that any child could dream of growing up to be wealthy, regardless of their class.  Which, when you think about it, is a really silly proposition.  Sure, Andrew Carnegie grew up a poor immigrant and got rich, and Bill Clinton went from poverty to the presidency.  But Saddam Hussein was born into a family of shepherds and got fantastically rich.  Joseph Stalin was the son of a cobbler who couldn't afford to pay his tuition when he was in seminary.  But we don't dream of being like Ba'athist Iraq or Soviet Russia.  Upward mobility is possible in any society.  What made the US special was that, for awhile, you could be pretty sure that if you finished school and worked hard, you'd be able to find a decent job.  You would be able to afford a home, a car and a television, and you could put your kids through college and retire comfortably to Florida in your sixties.  Plenty would shoot for the stars and most would miss, but, where missing in Soviet Russia, anywhere outside of Moscow and St. Petersburg, meant poverty, in the US, if you fell, instead of crashing to Earth, you could land comfortably on a cloud.  Over the last thirty years, that America has been slipping away.

Summers forcefully argues that, as a society, we need to start doing better.  And I agree wholeheartedly.  I don't claim to know exactly how to solve our problems, but I do know that "Cut taxes--> Shrink Government --> Magic!" formula is a proven failure.  And we have to start looking for a formula that can work.

"Confidence Men" and Obama's first three years

A few days ago, I finished up Ron Suskind's Confidence Men.  It's a pretty entertaining story that the Pulitzer Prize-winning Suskind tells about the failures of the Obama Administration's economic policy through the administration's first two years.  First, a few notes on Suskind.  He won his Pulitzer for his remarkable account of DC Public Schools in A Hope in the Unseen.  Since then, he's mostly moved on to political intrigue.  He wrote two books on the Bush Administration, The Price of Loyalty and The One Percent Doctrine, which savaged the decision-making process in the Bush White House.  He's written for the Wall Street Journal and Esqure, so he's very much a journalist in the way he writes.
So there's two things about this book that stick out to me.  The first, hoisted from Amazon.com reviews, is the perspective from which Suskind writes.  The assumption seems to be that Suskind is savaging the Obama Administration from the right. People who take that tack either didn't read the book, or didn't comprehend a thing.  Suskind, despite his Wall Street Journal pedigree, is very much a conventional Democrat, and his perspective is that Obama brought back the same people who pushed the deregulatory agendat that took hold of the country over the past three decades to his Administration, leading him to push policies that have been proven failures instead of re-regulating (as an aside, this, unlike the "Obama is a super socialist who is dangerously growing our government" is at least semi-coherent; the "Kenyan socialist" nonsense is either the WSJ/National Review crowd either being intentionally dishonest, or showing how tremendously stupid they are) .  In essence, he splits potential appointments Obama might have made into two teams-- an "A" team (that Suskind likes) headed by consumer rights advocate, Harvard Law professor and Senate candidate Elizabeth Warren and former Fed chairman Paul Volcker, and a "B" team led by former Treasury secretary and Harvard president Larry Summers and former New York Fed president Tim Geithner.
The problem with the division is that, even internally, it's incoherent.  Start with Summers.  It's very obvious that Suskind interviewed Summers and didn't like him.  That's nothing new.  Summers is famously prickly, and a bit (well, probably a lot) of a jerk.  He's arrogant and dismissive of those he deems to be unworthy of his time.  But anyone who's ever worked with Summers uniformly attests one thing-- he's also absolutely brilliant. Suskind gives that short shrift, dismissing Summers as "frequently wrong" (without getting into specifics beyond "he didn't want to regulate derivatives in '98") and "unable to accede intellectual ground that he can't defend."  Those are pretty broad charges, and, if Suskind's going to make them, he better answer for them.  But he doesn't.  Instead, he makes them, then moves on to the next point.  This is problematic because Suskind spends much of his discussion of Summers talking from on high about the ideas of a man whose views he, frankly, doesn't understand.  That leads to a pretty odd literary style-- he makes grand accusations, doesn't bother to support them with much beyond bombastic rhetoric and anonymous one-liner quotes from "colleagues," and then moves on as if the initial point is self-evident.  The whole exercise ends up being, even internally, utterly incoherent.  One of his major points is that Summers has a remarkable ability to take two sides of an argument, choose one he thinks is correct, then marshal support for it even when it turns out to be wrong.  Suskind uses that as his explanation for how Summers squeezed out the ideas of Christina Romer (then the chair of Obama's Council of Economic Advisers) in favor of his own regarding the size of the stimulus the Administration passed in early 2009.  There are two problems with this account. First, as has been pretty well-documented, Summers and Romer were on the same side of the argument.  So, somehow, Summers had a remarkable ability to marshal support for conclusions that turned out to be wrong... which explains why the Administration decided on a policy course that differed from the one which he advocated.  Second, there's the personality issue.  Suskind paints Christy Romer as something of a wallflower (a major theme of the book is that women were treated with hostility in the Obama Administration).  This one REALLY doesn't pass muster.  Anyone who's worked with Romer at Berkeley can testify that she is not one to back down.  But the book portrays her as being swept aside by Summers and Geithner... and then complaining as if she's been victimized.  This is deeply unfair to Romer... and pretty damning for Suskind's account.
But probably an even bigger problem with Suskind's book is that he wants to make qualitative claims about policy-- that some policies that the Administration pursued were wrong, and that others might have been better.  That's a perfectly reasonable position.  But if you're going to make claims about the rightness and wrongness of policy, you better have a really good explanation for why one policy is wrong and your preferred policy is right.  Suskind doesn't just give this vital element short shrift-- he ignores it altogether.  He treats it as self-evident that Warren and Volcker were right on the policy, while Geithner and Rahm Emanuel were dangerously wrong.  And that might work if he were able to put together a powerful argument to that effect.  That argument, frankly, isn't exceptionally difficult-- Paul Krugman and Joe Stiglitz frequently argue, very coherently and persuasively, about the inadequacy of the Administration's economic policy.  But Suskind ignores this altogether.  And this missing element becomes even more problematic when you go through the book and realize that, despite his WSJ pedigree, Suskind doesn't understand a lot of basic finance.  Now, I'm not one to look down my nose at people who don't have some knowledge about a particular topic-- God knows, I'm ignorant about most things.  But, if I don't know about something, I avoid taking a strong stance on it.  Suskind does the opposite-- he treats things he has no knowledge of as self-evident, then goes on to eviscerate those he argues against as disingenuous or even stupid.  That's, needless to say, a pretty absurd tactic.  Now, because I don't want to be a hypocrite, here are some examples.

First, Suskind repeatedly refers to Tim Geithner as the former "chair" of the New York Fed.  For anyone who can look it up on Wikipedia, the New York Fed doesn't have a chair-- the Board of Governors in DC does.  Ben Bernanke is the chairman of the Fed; Geither was the President of the New York Fed.  That one is the most obvious, and it's just a factual error, but it's pretty indicative of Suskind's basic reporting failure.  Another is his statement that a collapse of Merrill Lynch would be even more significant than Lehman Brothers' collapse because Merrill, Morgan Stanley and Goldman Sachs (the three investment banks that, at the time, were bigger than Lehman) were all about three times Lehman's size.  This is complete baloney.  I have no clue where Suskind gets the "three times the size" claim, but it's laughably off.  A financial institution's size is normally measured by its assets.  Lehman's assets were between $600 and $700 billion when it filed for bankruptcy.  By all accounts, Morgan Stanley was between $800 and $900 billion, and Goldman was somewhere between $900 billion and $1 trillion.  Bigger, yes.  Three times bigger? Not even close.  But then he makes less obvious mistakes that are, substantively, even worse.  He refers to Collateralized Debt Obligations (CDOs) as "derivatives" (they're not; they're asset-backed securities), refers to swaps as a way that companies finance themselves, in a category with commercial paper and repos (that's laughably wrong; swaps are derivatives that are used either as hedging or speculative tools; you can't fund operations by buying a swap).  Later, he talks about Bear Stearns dying because its counterparties were "shorting" their repo durations.  This is incoherent.  What Suskind meant was that they were shortening their repo durations (meaning that Bear was borrowing for a period of days instead of weeks or months in the repo market).  Shorting refers to a transaction that earns a profit if the value of the referenced asset drops.  While this was probably a simple typo, it leads me to think that Suskind wrote the financial sections of his book by stringing together terms he saw in the WSJ and the Financial Times without bothering to understand what they actually mean (like a little kid who hears her parents use big words and then uses them incorrectly).
While I think Suskind recognizes this shortcoming most of the time, and uses terms rarely enough that you could fill in the gaps in what he's saying enough to get to the right conclusion, when he does go for a full-length explanation, it shows just how clueless he is.  There are two cases which are most egregious that I'll focus on here.  First is from a conversation he has with Geithner about the rogue mortgage lender Countrywide's problems.  I'll quote the whole thing, just to put it into context:

"That was really interesting," Geither later reflected, "because Countrywide had no idea what its exposure was, no understanding of what it had gotten into.  And the fact that the market was unwilling to fund Treasuries if Countrywide was a counterparty was the best example of how fragile confidence was and how quickly it turned."

Translation: the market would not even lend Countrywide cash to buy Treasury bonds, the safest investment in the firmament.  CDOs, MBSs, or similar types of mortgage-based collateral that Countrywide was using to roll over its repo loans were suddenly seen as impossible to value or sell in August 2007, meaning it was illiquid.  The whole point of collateral is that it can be taken [...] and sold in liquid markets for cash.  Countrywide's intended use for the borrowed funds -- to go out, like Sal Naro, and buy Treasuries and shore up its balance sheet or use them as collateral for emergency bank loans-- was irrelevant.  Its collateral was no good.

Suskind then goes on to ridicule Geithner for thinking that Countrywide's problem was one of "confidence."  The problem with this is that it is stunningly wrong.  Not in a "that's not what they did" way, but in a "there's no coherent reason they would have done anything Suskind described them as doing" way.  First, he misunderstands the most basic aspect of the repo market.  Countrywide wasn't, as he says, trying to get the market to fund their Treasury purchases-- it was trying to borrow in the repo market with Treasuries it already held as collateral.  This is a critically relevant distinction that Suskind completely butchers.  Borrowing unsecured in order to buy Treasuries is completely absurd-- it's essentially giving away money, and no one would ever do it.  No institution is going to have to pay a lower interest rate than the US Treasury for similar-duration bills.  So if I borrow $100 from the bank to buy that amount in 10-year Treasury bills, I'll earn 2% interest, but I'll have to pay substantially more.  If I can't pay, the bank will seize my Treasury bills as collateral.  So, best case, I lose the spread between what I have to pay to the lender and the interest that I get on Treasury bills.  Worst case, I default and the bank seizes the Treasury bills.  It's a lose-lose proposition.  And borrowing to buy Treasury bills doesn't "shore up the balance sheet" like Suskind says-- it weakens it even further by adding higher-yielding liabilities (the loans to buy Treasuries) while buying lower-yielding assets (Treasury bills).  What Geithner's statement actually means is that lenders wouldn't even make loans to Countrywide that were secured by Treasuries already held on Countrywide's books.  What this shows is that creditors had so little faith in Countrywide's credit that they wouldn't even lend when the collateral was the safest securities on the planet (Treasuries).  This shows exactly what Geithner says it shows-- that the market had essentially no faith in Countrywide's creditworthiness, and didn't want to go through the hassle of fighting Countrywide to seize its collateral if the firm went belly-up the next day.  The simple story here is that, if Suskind can't understand the practice Geithner is talking about, he has no grounds on which he can criticize Geithner's actions.

Even worse is Suskind's bungling of the difference between equity holders and debtors.  Here's the relevant text:
The key to the equation was that, as in all bankruptcies, creditors would take a haircut [...] Geither, on this point, would not budge.  Debt was sacrosanct.  No creditor would suffer.  [FDIC head Sheila] Bair was equally intransigent.  Secured creditors, such as equity holders, of course, wouldn't be wiped out, but they had to face consequences for lending money to an institution whose recklessness had led to its demise.

This is stunningly bad.  The underlined part (the underlines are mine) is where he strikes out.  Secured creditors and equity holders are NOT the same thing.  They're not even close to the same thing.  In fact, they're not even related.  Equity holders are those who own a portion of the company.  They're stockholders. An equity is a stock.  Secured creditors are lenders who lend against collateral that the company owns.  So if I buy, say, GM bonds, I DON'T have an equity.  I am an unsecured.  If I give GM a line of credit that is secured by its factory (meaning that, if GM doesn't pay, I can seize the factory as collateral and sell it to get my principal back), then I am a secured creditor.  Suskind conflates someone who lends against collateral with a stockholder.  They're not even remotely close to being the same thing.  What the discussion is about is whether unsecured creditors should have been paid in full.  Geithner argued that they should be.  Sheila Bair argued that the bank ought to be resolved in a procedure that looks like bankruptcy, where claimants are paid in order of their priority (secured creditors can seize collateral, then unsecured creditors are paid off to the extent possible, THEN equity holders might get some of the leftovers, though that's unlikely).  Without taking a position on whether Bair or Geithner is right, Suskind simply doesn't understand the debate.
And, at heart, that's what makes the book and its conclusion so hard to take seriously.  Geithner wants to cast heroes and villains.  And in a narrative, that's all well and good.  But if you're doing that, you sure as heck better make sure you've got firm ground to stand on intellectually.  And Suskind just doesn't have it.  So, even if reading the book is entertaining (and it mostly is; Suskind's a fine storyteller), one who does so should ignore any explanations and conclusions at the risk of becoming seriously misinformed.

Hold EVERYONE at Penn State Accountable

I'll probably post something about the Euro later tonight, just because it looks like it's on the brink of collapse in the next week or so, but, on a personal level, I think this story is more pressing.

The Washington Post has two columns today on the unfolding pedophilia scandal involving former Penn State defensive coordinator Jerry Sandusly.  Jason Reid basically has it right when he says that Joe Paterno needs to resign now.  But I want to focus on Sally Jenkins's column, which is so off base it would be laughable if it wasn't so disturbing.

Ms. Jenkins argues that Joe Paterno shouldn't be assigned blame for allowing the Sandusky child rape go on for so long.  The arguments she makes are... bizarre and nonsensical.  She says that, because Paterno worked with Sandusky for so long and you can't recognize a pedophile just by looking at him (or her, I guess, but in this case, him), he wasn't in a position to be able to look objectively at Sandusky's behavior.  That's absurd.  Sure, if Sandusky was looming in the shadows, and somehow, implausibly, did this for decades without getting caught, that would be one thing.  And, had this all just come to light, no one would be throwing Paterno under the bus.  But the reality is that in 2002, Paterno got a specific report: that Sandusky was naked in the shower with a boy who looked to be about 10 years old.  Whether he was told that Sandusky was having anal sex with the boy is unclear, but also completely irrelevant.  If you get a report that your trusted assistant is naked with a pre-teen boy, your responsibility is NOT just to kick it up the chain of command-- it's to take IMMEDIATE action.  That means confronting the assistant, reporting it to the police, and, in the interim, barring the assistant from your facilities.  "I can't believe he would do that, he's my friend" is not an excuse when the reality is that, if you're wrong, no matter how low the odds, you're going to ruin the lives of innocent kids. If it turns out to be true... he'll be exonerated by the authorities.  But if you turn out to be wrong, you've irrevocably ruined innocent lives.

Yes, the athletic director, the administration, and everyone else should also be punished for their failures in this case.  Many of them are probably more guilty than Paterno.  But, last I checked, someone else being more responsible doesn't alleviate one person's responsibility.  Morally, this incident makes Paterno scum.  The only course of action is for him to resign right now, and take real responsibility for his failure.

How much longer for the Euro?

Looks like Greece's prime minister has to resign in order for them to accept the latest package.  I still don't think it's going to make a difference.  Sure, it includes some debt write-downs (definitely a good thing), but it also includes a bunch of immediate austerity (short-term, definitely not a good thing).  For me, the key would be a commitment on the ECB's part to support the Euro-periphery's funding needs until their economies recover (an indefinite bond-buying program, for example).  But, while Mario Draghi is infinitely more competent than Jean-Claude Trichet, he still doesn't seem to be willing to give the peripheral countries the kind of commitment they need to get them through the crisis.

While it's kind of hard to see the Europeans letting the Euro go, they are also committed to not doing enough to keep the Euro-zone together.  Eventually, this will come to a head-- Greeks will get tired of counterproductive austerity, and the Euro will reach a point of crisis.  Either the ECB will have to provide open-ended financing and delay austerity until the economy can recover, or Greece will have to shut down its banking sector, default on its debts, and exit the Euro-zone.  That will inevitably cause massive bank runs-- assets on Greek banks' books are Euro-denominated, while the drachma would inevitably be worth substantially less than the Euro.  Depending on the global financial system's exposure to Greek (and other peripheral European) debt, it could also have knock-on effects whose scale could range anywhere from seriously disruptive to catastrophic.

I tend to think that a Greek default would cause a cascading effect, at the least to Spain, Italy, and Portugal, but potentially even further.  In that case, I think we'd be facing a global Lehman moment.  Lehman's disorderly collapse in 2008 shook global financial markets so much that the Congress was immediately scared into passing TARP and bailing out the rest of the big American banks, while the Fed flooded the US financial system with trillions of dollars of emergency liquidity to prevent an imminent failure.  A failure of any one of Greece, Spain, Italy or Portugal, never mind all four, would be a few orders of magnitude worse.  And the US alone probably wouldn't be equipped to rescue them.  I think at that point we'd need a concentrated global effort to avert global economic collapse, with not just Germany and France, but also China and the US pitching in funds to stabilize the global financial system.  Now, the ECB could choke off that kind of disaster by taking aggressive steps to create higher inflation in the Euro-zone and buy up peripheral Euro-zone debt, but it's looking more and more like the ECB is a useless institution, which in turn could well mean that the global economy would have to be on the verge of collapse before it was induced to act.

Are they really printing this?

I opened CNN's website today to see what might be the worst political column ever from Ruben Navarette.  Admittedly, I don't know much about the Herman Cain sexual harassment allegations-- but what this story suggests is that it's "time to stop accusing black conservatives of sexual harassment" and that Cain and Clarence Thomas (in the context of the Anita Hill allegations during his confirmation to the Supreme Court) came under attack for was... daring to "think outside the box" and "be black conservatives."  I think these two paragraphs sum it up.


Many Americans look back at Thomas' confirmation hearings and think they were mainly about accusations that Thomas directed sexually blunt language at Hill. But for me, what they were really about wasn't dirty talk as much as dirty politics. Black conservatives ask us to think outside the box, and so -- as some people see it -- they're asking for trouble.


The hearings were also about freedom -- the freedom to indulge in independent thought, even if it means biting the hands of liberal benefactors. You heard that criticism leveled at Thomas, who opposes affirmative action even though -- according to his critics -- he benefited from it. And the public humiliation that Thomas suffered remains a prime example of the liberal establishment trying to put someone in his place.


Really...? The reason Anita Hill accused Clarence Thomas of sexual harassment was his race and his political party...? Shouldn't the first question be, you know, whether Clarence Thomas and Herman Cain actually sexually abused anyone?? Is that a radical idea? Now, if both of these men were demonstrably falsely accused, we might be on to something.  But that's hardly the case.  In Cain's case, he paid a settlement, and in Thomas's case, while the truth hasn't necessarily been discovered, Hill passed a polygraph test while Thomas refused to take one.

And sexual harassment allegations, just in case they forgot, are hardly unique to black conservatives.  Anyone remember Bill Clinton? He spent years publicly fighting Paula Jones's sexual harassment allegation (one which had no more basis than it appears the one against Cain, and less than the one against Thomas), and was ultimately, you know, impeached (though not for that).  No one's suggesting that Bill Clinton was a great husband, or a model of good behavior.  It's well known that he was (and probably still is) a notorious skirt chaser who regularly cheated on his wife.  But, at the end of the day, the only thing he probably did that was illegal was lie to a grand jury about a consensual sexual relationship... and he almost got booted from office for that one.

The first thing we need to be looking at isn't whether people are accusing black conservatives like Herman Cain and Clarence Thomas of sexual harassment because they're black conservatives... we need to be looking at whether those accusations are, you know, true or false.  If they're false, that's one thing.  If they're true, well, the author seems to suggest that it's somehow OK because, um, the accused are black and conservative?

William Cohan is Stealing My Thunder

Yesterday, I posted this.  Then I picked up today's New York Times, and Andrew Ross Sorkin quoted William Cohan saying... pretty much the same thing I posted.  Guess everyone thinks the same thing at the same time...