Sunday, October 31, 2010

You Can't Sell Your Soul If the Devil Ain't Buying

cross-posted at Dagblog

The election is the day after tomorrow, and I'm basically done looking at predictions of the results. Foreknowledge is the beginning of folly, and no matter how the day goes I'm going to do the same thing on Tuesday and after Tuesday. Win or lose, you keep your eyes on the prize.

But there's one thing just about every prognosticator agrees on: Senator Blanche Lincoln (D-Ark) is toast.

Lincoln, of course, is a "moderate" Blue Dog. She has clearly felt that the Obama Administration's agenda would hurt her back home in Arkansas, so she's gone out of her way to water down key bills, especially financial reform, and essentially run against her own party:

She takes strenuous pains to distance herself from the White House, trumpet her centrist credentials and assert her independence from her Democratic colleagues.

Her reward for watering down those votes that she was afraid would cost her re-election? She's an incumbent who can't even get to 40 percent in the most recent polls.

And that brings me to the political lesson of the day, this October 31: You can't sell your soul if the Devil ain't buying. Every voter that Blanche Lincoln was trying to appease is voting against her anyway. Why shouldn't they? She signaled over and over again that their political philosophy was right, and that she herself was uncomfortable with Democatic policies. Maybe the votes that Lincoln would pick up by making a strong case for Democratic principles and the good that Democratic policies did for the average Arkansas voter wouldn't have been enough to re-elect her. But clearly she couldn't win without those votes.

Sometimes the Devil won't pay for your soul. He'll just take it for free. You might as well do the right thing instead.

The post-election pressure to be more compromising and more moderate and more "Clintonian" already started ramping up last week. The next six hundred times you hear that talking point, remember Blanche Lincoln: a classic Clinton Democrat, with Bill Clinton himself stumping for her personally, getting stomped 2-1 in Arkansas. If that's what winning looks like, let's look at some losing strategies, please.

And before you say it's impossible for a Democrat to win in a state like Arkansas, let me point out that Lincoln's seat has been Democratic since Reconstruction and that the state's other Democratic Senator, Mark Pryor, was re-elected two years ago by an 80-20 margin. Lincoln hasn't lost a tough hold. She's given away a stronghold.

Moving to the "middle" by meeting the hardest right-wing candidates in living memory halfway isn't going to help Democrats survive. Conceding the basic principles of the "conservative" argument simply means conceding to them. You can't say, "Big government is a problem, but we need to do some practical things out of necessity," anymore. And you can't make so many concessions to your policies that the policies don't work, because the opposition will just hang the failed policies around your neck. If the Republicans decide next week to oppose all childhood vaccinations and claim that they cause autism, you don't try to appease them by weakening the MMR vaccine until it stops protecting kids against measles, mumps and rubella. Doing that would destroy the case for vaccinating kids in the first place, and look like an admission that the crazy fact-free case against vaccinations was true.

Plenty of Democrats are going to take that "centrist" advice. Lots of them already believe it in their souls. And most of those centrists, frankly, are going to end their own careers. Do you seriously think that Ben Nelson is going to be re-elected in 2012 for being the least Democratic of the Democrats? He's going to be run out of Omaha on a red-state rail, and a real Republican will replace him. If your political purpose is to pull Obama to the right, a Republican is always, always going to do it better. The question is whether more progressive Democrats are going to follow Ben Nelson on the same cliff.

I'm all for pragmatism. But pragmatism isn't pragmatism if it doesn't get results. And I understand why any working politician is going to think about his or her own political safety. That's the nature of the beast. But at a certain point, cowardice won't keep you safe. If you want to survive, you have to push forward and fight for every step. There's no guarantee of winning that way. But you're guaranteed to lose doing anything else.

Wednesday, October 27, 2010

Harassing the Professor

cross-posted at Dagblog

The University of Venus blog at Inside Higher Ed recently posted a personal reflection by a non-white female professor who has felt sexually harassed by one of her male undergraduates. This is at once shocking and entirely unsurprising. Even a white straight guy like me can't work in higher education and not notice the inappropriate behaviors that many female colleagues have to put up with from male students: students sexually propositioning them, giving them flowers, attempting to contact them off-campus, writing graphic sexual comments in teaching evaluations. It may not have happened to every single woman who professes, but it happens to plenty, and to far, far more than it should. In this case, the student turned a writing assignment into something graphically sexual that had nothing to do with course content. (And yes, of course sex is not off limits for academic discussion. But it has to be academic discussion. "That Georgia O'Keefe painting looks pretty symbolic to me," is a normal part of art history class. "Let me tell you more about my penis," is not.)

The original post had led to a intense online discussions both at the University of Venus and at Historiann. Some insights have been great, and others derailed by the question of parity: does this happen to male faculty too? Shouldn't we treat men and women faculty equally? I find this line of argument unsettling for three reasons: 1) this is very obviously not a case of parity, 2) that the situations are radically unequal does not mean that men are never, ever, ever harassed, or that we need not consider how such a situation should be treated, and 3) the focus on student harassment as an exchange between only two people leaves out all the other people in the classroom, and those people's education is very definitely affected by such misbehavior.

Here's a key quote from the original poster:

Right after my confrontation with this student about his first paper, I shot my usual line to my husband, who is also an academic: “this would never happen to you!” And then I realized there were other things that were happening that I doubt happen to him or other male faculty. Based on the content of the student’s paper, and his behavior towards me, it was very clear that he saw me not as a professor but as a sexualized, “exotic” woman. I became acutely aware of my body language and my clothes. I found myself often quickly checking the buttons on my shirt during class to make sure they were all buttoned. I felt awkward turning around to write something at length on the board. I found myself limiting my physicality in other ways, like not sitting on top of the desk as I often do during discussion sessions. I started scheduling students back to back during office hours, if he wanted to meet with me, just so there would be a crowd of students outside my door when he was inside my office. And I made sure that I wasn’t the last person to leave the classroom. I understand that male professors are sometimes viewed sexually by their students. But I think the consequences of that are very different. I wonder if male professors have to worry about being the last person to leave the classroom, if they wonder what kind of predicament the next bad grade they give out is going to land them in.

The focus, again, has been on "This would never happen to you!" Of course it does happen to men, occasionally. But the real point isn't whether anything like this happens to male teachers or not. The point is that this situation is much easier for men to defend themselves against than it is for women.

If you're a straight male teacher, a straight female student is much less likely to cross the boundaries that you set in your teacher-student interactions, and in the rare cases when one does, a male teacher is going to protect himself, and count on his institution to protect him, pretty easily.

The male teacher's advantage begins with our culture's standard heteronormative scripts for courtship and dating. Should a female student express interest in a male professor, that expression will in almost every case involve the student signaling availability, rather than making any overt gesture. The script is that the woman signals interest and the man pursues. That's by no means a feminist script but face it: a female undergraduate interested in having an actual romantic relationship (as opposed to a crush or occasional daydream) involving a major power differential with an older man is typically also invested in old-fashioned gender roles and in the man as pursuer.

Basically, all a male college professor has to do to repel such invitations is ignore them. A student has a fantasy, no matter how durable or ephemeral, of being pursued by an older man; if the older man doesn't pursue, that's pretty much the ballgame. If a male professor doesn't know how to ignore or deflect comments professionally, he can just fall back on playing dumb. Actually being dumb also works quite nicely. Does the student just have a garden-variety crush, or is she actually hoping to act out her fantasies? Doesn't matter; there's not much she can do without the male faculty member's cooperation. Male privilege is not only powerful, but it's convenient.

A woman professor, unfortunately, doesn't have to distinguish the male students with harmless crushes from the ones who are prone to act out, either, because the young men who want to act out do. If the script is "man pursues," a young man with a sexual interest in his professor is apt to make unequivocal gestures. A dozen roses; an e-mail describing erotic dreams; a surprise phone call at home. Bad times. And then the onus is put on the faculty member to actively refuse the student, and of course to manage his hurt feelings. (She not only gets to be inappropriately sexualized; she gets to be inappropriately sexualized and then become a focus of anger.) And while a female student hitting on a male professor often experiences his authority as "sexy," many male students who proposition female professors experience a woman's authority as an anomaly that needs to be reversed or resolved. There are plenty of horror stories, although none are mine to tell. This situation is much, much harder than it is for the male teacher, right from the start. And when a male student refuses to hear the refusal, and responds with larger and less appropriate gestures in order to make sure that he has communicated his desires to their object, it gets ugly.

Are there occasionally students who refuse to accept that a male professor has refused them? Sure. It's much rarer than it is for female professors, but it happens. Harassers, of whatever gender, can be defined by their inability to hear the word no or to recognize boundaries, and when one inappropriate gesture doesn't get what they want they follow with an even less appropriate one. When inappropriate e-mail doesn't work, make an inappropriate phone call. If that doesn't work, just show up. To take one of the original poster's implicit questions, "I wonder if male professors have to worry about being the last person to leave the classroom," literally, the answer is "Once in a great while, yes." It's happened to me only once in nineteen combined years as a high school teacher, grad school teaching fellow, and professor, and it lasted rather less than a semester, and it was a hell of a lot easier on me than it is on almost any woman in the same position. That experience in no way makes me less privileged, or "equally a victim." In fact, my experience illustrates how much easier men have it.

On semester, I got some alarming e-mail sent to my personal account; it was anonymous, but various details indicated a student in a night course I was teaching. (Even though the student didn't respect my boundaries or my privacy, I was still supposed to come looking for her; she had apparently created an e-mail profile just for the purpose of sending me her amorous spam, and her profile picture was a jpeg of Lady Godiva. Even the unsettling inappropriate behavior was a variant on come-and-get-me.) I reported it to my department chair immediately, gave the students no indication that anything had happened, and spent a few weeks working out which of my students had done it. Did I give thought to how and when I left that classroom at nine PM? You bet. I took great care not to make any move that might encourage the initially-unidentified culprit, who might construe almost anything as encouragement. For several weeks I made sure not to leave the building with any female students.

But was I afraid of physical danger, as the original poster was? Decidedly not; my experience was much, much less alarming than hers. When the (eventually identified) culprit chose to glower at me in the classroom, I felt the opposite of fear. Her displeasure was an admission of her powerlessness, and I was confident that she would not resort to any physical intimidation. Neither did I worry about my appearance, or become uncomfortable about my body; I did not believe that the incident had much to do with my body or my looks. Neither did I worry about my work clothing, since I had already availed myself of perfectly "safe" and "professional" male clothing which could not be second-guessed. It wasn't just that what I was wearing could not be construed as sexy by the student; I was also safe from any charge from administrators that I had "brought it on myself" with what I wore. Professional women, alas, don't get such easy and uncontroversial dress standards.

But the most important difference was that I knew the school authorities would back me. And that would have been true for me virtually anywhere. I trust that my particular chair and my particular dean would do the same for any of my female colleagues in the same situation, but that is not true of every chair or every dean. Again, there are horror stories which aren't mine to tell, but I can think of instances where a male student made wildly inappropriate overtures toward female faculty, where there was no dispute either of the inappropriateness of the student behavior or the identity of the student, and the student was allowed to remain in the professor's classroom. That is the difference between being a man and a woman in this profession. If a man asks to be protected in his workplace, he always gets protected. Some women do, and some women don't. That's an abuse of the faculty member who's forced to be in a classroom where she doesn't feel safe, and it's an abuse of every one of her students, whose education is compromised by keeping the harassing student in the classroom.

A teacher who's having students trespass her (or his) boundaries will almost certainly begin to second-guess those boundaries and feel tempted to make them much more rigid. There's an instinctive response to make oneself as distant and unapproachable as possible. That doesn't help anybody's learning. Nor does feeling wary and defensive help you run a classroom better. A teacher's professionalism may compensate for her or his discomfort in that situation, and the students may never see it overtly expressed, but it will still be a compensation and it will take that teacher's energy and attention away from other things.

Read that original post again. The professor in question was feeling so cautious about her boundaries that she gave up her habit of sitting on the desk. Now, sitting on the desk is not itself the key to teaching effectiveness, but it was clearly something she used to signal a relaxed and open atmosphere for discussion. It seems overwhelmingly likely that discussion in that classroom stopped feeling quite so relaxed and welcoming, because the teacher couldn't afford it to be. That's hard on the teacher and bad for the students. She also writes about scheduling student conferences very tightly in order to avoid being alone with the culprit, which means that everybody's individual conference got kept short and hurried. The faculty member was put in a situation where the goal of her safety and comfort was put in conflict with the goals of effective teaching, all for the dubious benefit of keeping the problem student in the classroom.

And before anyone takes up a Gender Wars 1.0 position, siding with the male student against the prudish female authority figure, remember this: when a professor who's feeling the instinct to pull back from students because she's been (or being) harassed by a male student is going to pull back furthest from other male students. Allowing one boy the inalienable male privilege of handing in porn for course credit has a cost. It gets paid by other male students who get a teacher who is less available, less generous, less likely to become a mentor. How could it not? (It also, of course, exacts a toll on the professor's well-being and her soul.)

When put in a less-intense parallel situation, even knowing that I would be supported by my superiors, I went through a few months when I was instinctively much more distant from female students and had to work, consciously and hard, to remain equally accessible to all my students. During the night course with the problem student, I was very careful to leave the building every night with at least one male student. That felt like a very reasonable step. But it did mean that the male student, often the same one, got an extra five or six minutes of conversation about the writers and books we were studying, a little extra attention from the professor. Is that gender inequality? You bet. And there was an enormous temptation to shut myself off from female students for the next few months, becoming less likely to stop for a brief chat if I passed them on campus, more reluctant to take on independent study projects, quicker to end conversations in my office. That would obviously be unjust, and that is not the teacher I have ever wanted to be. But absolutely no one would have called me on it. I could also have been "fair" by pulling back from all my students, but that is not teaching either. And it took a hard, conscious effort not to become that person. That's doing it the easy way, cushioned by institutional support and male privilege and a sense of physical safety. It's a lot harder for women. That penalizes women and their students as well.

Female faculty need to be allowed to solve classroom problems as they see fit, but they also need to know that they have all the tools that their solutions require, including backing from administrators. A faculty member who's feeling harassed by a student might decide that the student does not need to be removed from her classroom, but she does need the confidence of knowing that she could have the student removed if that were necessary. The real scandal isn't that students treat male and female faculty differently; that is just an ugly reflection of our wider society's values. But when the people overseeing a university and upholding its values allow female faculty to be treated in a way that male faculty would never be asked to tolerate, it's a scandal and a shame.

Monday, October 25, 2010

History Never Repeats Itself

cross-posted at Dagblog

Election day is next Tuesday. Papers like the New York Times and Washington Post began publishing their post-mortem analyses of the election results last week. What should Obama do now that next Tuesday's results are in? Highly paid opinion writers have opinions.

The current conventional wisdom has two basic pillars:

1) It is currently 1994.

2) Since it's 1994, Bill Clinton should be President.

I'm going to leave the actual electoral predictions to my colleague Articleman and to folks like Nate Silver. But even if Tuesday night were to turn into an exact replay of 1994, district by district, the political situation on Wednesday morning would still be something completely new. History echoes itself, but it never repeats exactly. If this really were 1994, of course, being more like Bill Clinton would be a stupid idea, like telling someone fighting Muhammad Ali to be more like Sonny Liston. As Ezra Klein and Josh Marshall both remind us, the Big Dog was soundly beaten in 1994. And his post-1994 playbook, no matter how successful it was fifteen years ago, is just not going to work in 2011. Things have changed.

The point of all the "1994 all over again" spin is that it allows reporters and "expert" sources to come off like experts and make confident pronouncements about how things are going to go. "It's tough to make predictions," as Yogi Berra said, "especially about the future." That's why most pundits and sources try to predict the past instead. The point is not to be useful or even to be right, but to sound knowledgeable, and if pundits just predict a replay of what happened last time they can stick to repeating what they know instead of thinking about the unknowns. And if things play out differently, well, the pundits bet with the smart money and that's what really matters, if you're a pundit.

Planning a strategy on the assumption that things will go exactly the way they went last time is inviting one's own defeat, especially in adversarial contests. If something worked on your adversary last time, and they're coming back, do you really think they're going to make precisely the same mistakes this time? France in 1940 is not France in 1918, and you can't expect the Germans to cooperate by sticking to the strategies that lost them World War I. It's still very important not to repeat major strategic mistakes, like allowing unemployment to hit 10% in an election year, trying to march an army from Western Europe all the way to Moscow, or attempting to reduce the deficit during a massive recession. Those will always lose. But you can't count on winning the way you did last time, because the circumstances change and the opposition adapts. When Very Serious People talk about how Obama can win by using Clinton's playbook, they might as well be talking about defending France with the Maginot Line. Marshal Joffre was a Very Serious Person, too.

There are a bunch of reasons why the political situation in Washington, even if Tuesday night looks like deja vu, will actually be terra incognita, requiring a brand new map.

1) We're in much worse shape. In 1994, we were going through a moderate cyclical recession. We were also at peace, with a secure feeling of military near-omnipotence. We are now mired in a much deeper and longer recession, with troops in two ongoing wars. The economy has been seriously, structurally damaged, and there's the potential for plenty more bad news around the corner. The moderate and centrist small-bore fixes that worked well enough in the 1990s will not fix the problems we have now. Neither will just waiting for things to get better. And inaction, let alone wrong-headed action, could make things even worse.

The Republicans have been campaigning for two solid years on a hot-potato strategy, trying to keep the Democrats from fixing things, on the principle that if things were still a mess in 2010 they would get power back. They have no lucid proposals for fixing the economy; they want a mix of useless but expensive tax breaks for folks who are already hoarding their capital and foolishly pro-cyclical spending cuts that will make the depression even worse. If, as they and the media establishment expect, they get the hot potato back next week, they have to figure out what to do about it. And they have no plans that will work. The only predictable result is a lot of trouble.

2. The Republicans are counting on winning this time.
1994 was a big surprise. People weren't predicting it. The Republicans themselves weren't seriously predicting it. They've been predicting big wins in 2010 for well over a year. They have promised their base a victory, and more to the point they have promised that base the spoils of victory. Anything but a major rightward policy shift is going to disappoint and antagonize that base. Indeed, as Daniel Larison points out, disappointment and anger from the right wing is almost certain. There's going to be rage if (as Larison believes), the GOP comes up a few House seats short of a majority, but there's also going to be rage if the majority is smaller than the months of what Larison calls "overhyping" have led conservatives to expect and, most of all there will be rage when the GOP can't give their base everything their base has been counting on. Any new Republicans elected next week will have been elected to run Obama out of town, not to compromise with him. The voters who will carry any such Republicans to victory are hellbent against compromise.

3. Obama has passed more legislation in his first two years than Clinton did.
For all the disappointment and anger among the left-wing base, Obama has gotten more done than Clinton did in the first two years. He didn't pass the health care bill I would have designed, but he passed a health care bill. He didn't make financial reform as strict or thorough as I think we need, but he passed a financial reform bill. And if he blew the size of the stimulus, he passed a much larger stimulus than the other side of the aisle wanted. In the same period, Clinton passed the Family Medical Leave Act and the Brady Bill (which requires background checks for gun purchases except when it doesn't), created Don't Ask Don't Tell (which was treated as progressive at the time), and got stuffed on health care. I don't mean any disrespect to the Big Dog; those are just the facts. And while the Family Medical Leave Act is a great thing, it isn't a thing that the Republicans were hell-bent against or wanted to repeal. Obama, on the other hand, has passed major legislation that the Republicans hate, have campaigned against, and will claim they have a mandate to repeal. Compromising with the other party is much easier when you're talking about what to do next. "Compromising," for Obama, would mean giving some of his major legislative accomplishments back. And that is neither a recipe for success nor compromise.

It isn't so much Barack Obama isn't Bill Clinton as that he can't be Bill Clinton. And he'll pay badly if he tries.

Thursday, October 21, 2010

The Mortgage Crisis in the Tranches

cross-posted at Dagblog

I've posted about the housing and mortgage crisis, and the impending dangers, here and here, but there's one additional problem that I hadn't got my head around when I wrote those posts. That's the tranche problem, which is likely to lead to all kinds of perverse incentives and unforeseen difficulties.

Most of the bad mortgages, by which I mean both the loans which should never have been made and the mortgages that have that have become part of the banks' routine fraud, were bundled into so-called pools that supported the infamous mortgage backed securities. Those securities then split up the revenues from each mortgage pool a bunch of different ways. So instead of your mortgage having one owner, it's part of a big lot of mortgages with let's say ten different owners, the holders of the various bonds issued on the pool of mortgages your home loan is in. So far, so good.

Here's where it gets tricky: not all of those owners are equal, even if they own equally large percentages of your house, because the bonds are organized into "senior" and "junior" tranches, which get paid off in order of seniority. So, to oversimplify a little, let's say the pool of mortgages your house is in got securitized and divided up ten ways, with each bondholder getting ten percent. Those ten bondholders get paid off in order: one bought the first and safest ten percent, then another bought the second ten percent, all the way down to bondholder number ten, who gets the last ten percent of the money from you paying your loan (or rather, from all of the loans in your pool). All of this was done, in part, by clever financial engineers who figured that this would remove the risk from financing mortgages. (Cue hollow laughter here.)

In the old days, if you ran into trouble paying your mortgage and had to renegotiate, the mortgage had one owner, the bank holding the note, and if you only ended up paying two-thirds of what you owed, that bank took the whole hit. If the mortgage-backed securities were divided equally and you only paid two-thirds of what you owed, then all then bond-holders would get 66.6% of what they'd planned. But under the current system, if you only pay two-thirds of your mortgage, six of your bondholders get paid in full, one gets a two-thirds return, and three get nothing at all. (It's more complicated, actually, because the bonds are actually tied to all of the mortgages in a pool, but the concept remains: if half of the mortgages pay in full, and the other half get written down either through negotiations or through foreclosure and resale a a lower price, at least half of the bondholders are fine but others lose the whole investment.)

Why does this matter to people who are neither Goldman nor Sachs? Because it changes the incentives for dealing with troubled mortgages. In the old days, if your mortgage went south and the bank holding it was going to take a haircut, you could rely on them, at least, to do the economically rational thing. They had an interest in getting back as much of the loan value as they could. That might lead them to refinance. In a housing market that had collapsed since the original home purchase, it might make the bank less eager to seize and resell the home (at a big loss), when they could potentially work something out. Their interests were clearly aligned to maximizing the value of the home.

Under the mortgage-backed-securities system, the incentives get scrambled. Some of the bondholders are getting paid, no matter how much the mortgage declines in value. As long as 20% or 30% of the expected return comes in, they're sitting pretty. At least one or two of the bondholders are holding worthless paper no matter what, because they were only getting paid if the loans returned the full amount of interest on top of the principal, and they are basically out of the decision making loop. A few in the middle could either gain or lose, depending on how specific mortgages are resolved. But there's not a single party with decision-making power whose profit and loss are tied to maximizing the actual value of the asset. Maybe it makes more sense to keep a homeowner in the house rather than sell the house at a fifty percent markdown, but it makes more short-term sense for the "senior" bondholders to take what they can get up front ... sure, the house lost half its value, but their investment was in the "top" half of its value anyway.

The same thing goes for the problem of mortgage backed securities that turn out to be based on fraudulent paperwork. As I've blogged before, there are legal remedies that allow bond-holders to make the issuing banks eat that bad paper, buying back the bonds at the original price. But here, again, the holders of different tranches have different interests. If you bought tranche #8 of 10 in a mortgage backed by a pool that's cratered in value, you want to stick that bad investment back to the bank who put it together, and if it turns out that they didn't perform due diligence, you'd be negligent not to sue them. However, even the crappiest mortgage pool in the world has at least one or two traches of bondholders who are actually turning a profit, and they clearly don't want the deal undone. Why would they? They get the first ten percent, even if only ten percent of the expected returns come in. So we can expect a litigation bloodbath over this.

I have no idea how all this plays out. But I'm afraid that no one else does, either.

Friday, October 15, 2010

Realism About the Housing Mess

cross-posted at Dagblog

Most public debates over the mortgage and housing mess have been running aground on the false-dilemma problem, framing a problem with several possible solutions as a choice between only two options. At least one of the options in false dilemmas is always completely moonbat crazy, and frequently they both are. The false dilemma I've been hearing these days goes like this:

"We either have to give mortgage lenders a free hand, and forget about the legal details, or just let borrowers keep their houses for free without paying anything!"

Obviously, this is not the actual set of choices. It's the two most extreme choices within that set. The point of this either/or formulation is to make one unreasonable course of action seem sane and necessary by pairing it with an even crazier course of action. Letting banks foreclose on people's homes with forged documents is so clearly insane (and such an attack on basic property rights) that it can only be justified by pretending that there are no other options except giving away six-bedroom homes as gifts to deadbeats.

Of course there are other options. How could there not be?

I tend not to trust people who tell me there are only two ways to, especially when both ways are extreme. The world really is not a set of choices between Galt Gulch and Soviet Communism, between repealing the Fourth Amendment and accepting Sharia law, between life in a religious commune and life in a Vegas brothel. And generally when somebody tells me that I have to make a choice like that, I presume that person is trying to hustle me. The choice between "never foreclose on any home for any reason" and "foreclose on people whether you actually have title to their home or not" is obviously a hustler's presentation of the choice. And of course, you can't take a time out to think, because we have to foreclose now! Right away! There's no time to think over the actual rights and wrongs! (This is why it's called hustling.)

Ezra Klein has a characteristically excellent post running down four practical solutions to help homeowners in realistic ways that help homeowners without simply ripping off the lenders. The whole piece is worth a read, and the options are basically sensible. They include simple things like requiring mediation before a foreclosure and changing HAMP so that banks have to opt out instead of opting in, bigger things like allowing bankruptcy judges to modify the principal on mortgages for primary residences, and practical fixes like the "right to rent," in which borrowers lose the house and their equity but can remain as tenants paying market rents for a set period.

All of those sound reasonable to me. I'm personally a big fan of cramdown, the modification of principal by bankruptcy judges. That could allow banks and borrowers to split the difference between the inflated house prices on which the original loan was based and the current market price, so that both the lender and the borrower take a haircut on their mutual bad investment. That would also help separate the borrowers who can actually pay from the ones who never could, and the borrowers who genuinely bought much more than they could afford from the homebuyers who, because of the bubble, had to spend a million dollars for what would usually be four hundred thousand dollars of house.

In other news, here's Digby recommending serious jail time for the people who actually turned fraud into something routine. I have to admit that sounds pretty reasonable, too.

Wednesday, October 13, 2010

Bailout II: The Sequel

cross-posted at dagblog

So, the story about bad mortgages, by which I mean not simply ill-conceived loans on houses that have hemorrhaged value but loan transfers with forged or non-existent paperwork, is beginning to make it into the daily news. We're going to hear much more about it, I'm afraid. As of today, all 50 state attorney generals are beginning to investigate fraudulent foreclosures and mortgage filings by the banks.

One obvious and huge problem is that people are losing their homes without due process. That is obviously unjust, and bad for the economy while we're at it. A second problem is that an outright moratorium on all foreclosures will, in fact, do destructive things to the economy. That is a sobering problem.

But there's a third problem, just beginning to creep into view: most of those mortgages have been sliced, diced and pureed into the infamous mortgage-backed securities we all remember so fondly from 2008. That securitization, the process of turning individual mortgages into the various bonds, CDOs, and other derivatives that they were turned into, means that the titles to the underlying mortgages were transferred several times between various financial entities. But if the transfers of the mortgages themselves were never legal, and it's becoming clear that illegal transfers were routine, then there it becomes unclear if these mortgages were ever legally sold, or who owns them. And most of these securities have clauses that force the original sellers to buy back the loans if too many of the underlying mortgages turn out to be bad.

Now, if this sounds like a recipe for everybody in the financial world to sue everybody else, it is. But it's worse, because it becomes quite unclear who owns any of those mortgages at all.

Are you excited yet?

Remember all those big financial firms who almost went under during the financial crisis two years back? Remember how they were in danger of going bankrupt because they were holding all of these complicated securities backed by crappy mortgages, and when those became, ahem, "distressed assets" by losing most of their alleged face value the banks were no longer actually solvent? How could we forget, right? Well, imagine that all of those terrible securities have now officially become hot potatoes that the banks can legally attempt to foist back on one another. The new game is about to become You never legally sold us this, so here. It's still yours.

And before you say that this is all about technicalities, ask this: what lawyer is going to let a client lose tens of millions of dollars when a "mere legal technicality" would prevent that loss? Which megabank is going to go under by voluntarily overlooking such technicalities while all of the other megabanks use them to wriggle toward survival? I think we all know the answers to those questions.

Back when those crappy securities were merely "distressed assets," the Federal government bailed out the owners of those companies so they could stay in business pretending to be solvent. Now those assets are likely ownerless, meaning more huge write-offs on balance sheets, and various huge firms are going to be trying to stick one another with massive losses. Meanwhile, no one is going to be ready to trust any of those firms, because no one knows who is going to come out a winner and who is suddenly going to end up eating a $2 billion loss. Basically, there's a real danger of repeating 2008: massive financial firms in danger of collapsing, and taking large chunks of the real economy down with them when they go, and a general financial panic in which uncertainty about who is about to go down makes everybody unwilling to do business and thus leads to even more firms actually going down.

Oh, and by the way, the TARP money that the Administration could use to bail out huge firms in a jam? Just expired. Isn't it ironic?

And here's the thing: we can't repeat the bailout process from two years ago. We also shouldn't, but more importantly we can't. It was massively unpopular then, and it's only grown more unpopular. The Republicans are currently building their entire program around their alleged loathing of the first bailout and trying to stick the Democrats with the blame for it. And no voter in the world could stomach the same firms coming back with their hats in their hands again, not so soon.

So our national leaders may face a stark choice sometime over the next year. TARP II will be out of the question. Letting big companies fail, which the Tea Party Republicans will insist on, will likely make TARP I look sensible by decimating our economy for the next thirty years, but if we make that mistake it won't be reversible. The only way to intervene to save the financial sector will have to be punitive: Obama would need to nationalize large financial firms, cut executive pay, send a couple of people Wall Street reveres to prison. The Republican opposition will of course try to prevent anything even remotely like that, and most of what will need doing will require Congressional approval. But if Obama tries anything else, he's done for. The only way to build popular support for a second intervention in the financial sector is to go in as the sheriff cleaning up town.

I have no idea what will happen if push comes to shove again. But what Obama does will be about the choices he perceives himself as having. He would never do anything resembling this except to avoid disaster. But disaster may be coming.

Tuesday, October 12, 2010

Women Against Christine O'Donnell

cross-posted at dagblog

Monmouth University has a new poll on the Delaware Senate and Congressional races, and it's painful for the Republicans, especially for Senate nominee Christine O'Donnell. The top line: Chris Coons is leading O'Donnell 57% to 38%. O'Donnell has a grisly 58% disapproval rating with only 31% favorable, and Delaware voters consider her unqualified for the Senate by a margin of 57% to 35%. That's pretty painful.

Meanwhile, Coons is considered qualified (64% to 25%)and has a 50% approval rating with 33% disapproving. Those numbers aren't eye-poppingly good, and suggest that Coons may still be a relatively unknown commodity with voters, but O'Donnell's higher visibility is obviously not helping her.

What's most surprising though is the cross-tabs. Because for all the talk about the new wave of conservative Republican women, O'Donnell's numbers with female voters are abominably weak. She's not just losing women; she's losing because of women.

Only 22% of women polled view O'Donnell favorably. A landslide 68% view her unfavorably. Only 25% of women voters in Delaware consider O'Donnell qualified, and 67% do not. (Among men, O'Donnell has a -10% approval rating, and men come closer to an even split on her qualifications, with 44% calling her qualified and 48% not. Bad numbers, but not the horror show that the rest of O'Donnell's polling is.)

In fact, if only men held the franchise, this poll would give Christine O'Donnell a tiny, statistically meaningless lead: she's winning men 48% to 46%. It's women, splitting 68% for Coons and only 27% for O'Donnell, who turn the race into a 19-point blowout.

Some of this, of course, is about the fact that women skew Democratic and men Republican. But it also raises the question, again, of which voters the new crop of Palinite female characters candidates are designed to appeal to.

The Palin model, of which O'Donnell is only this year's most prominent update, is young, conservative, and attractive, but also typically weak on credentials and experience, openly anti-intellectual, and conspicuously reliant on faith and emotion in decision making. What's amazing about such candidates is that they so clearly fit misogynist stereotypes: strong hearts and weak heads, poor in book learning and logic but apt to be overwhelmed by the strong tides of their feminine feelings. I find the attempt to turn such a negative stereotype into a positive qualification for high office absolutely bizarre.

What's even more bizarre, but perhaps illuminating, is that men, or at least a plurality of men registered to vote, tend to view such female candidates as qualified, while other women do not. But it makes sense. If you take women seriously, it's obvious that most of these specific women are not serious in the least. Everybody knows dozens of women, just in their own zip code, who would make better senators than Christine O'Donnell would. It's only if you expect nothing of women that such women could meet your expectations.

If think of women as adult members of the human race, these candidacies are not simply jokes, but insults. But if you prefer to imagine women as passionate, feisty, emotional, and not terribly smart, Sarah Palin and Christine O'Donnell are just the gals for you.

Friday, October 08, 2010

Petition SUNY Albany

I've been blogging angrily about SUNY ALbany's foolish attempt to "globalize" by cutting French, Italian, and Russian from the curriculum.

If you, like me, consider this decision foolish and bad for the education of SUNY Albany's students, please consider signing this petition to restore those crucial languages to SUNY Albany. Thanks.

Merci. Grazie. Et cetera.

Cross-posted at Dagblog

Wednesday, October 06, 2010

21st Century Education: SUNY Albany Edition

cross-posted at Dagblog

Earlier this week, I blogged about SUNY ALbany's plan to fulfill its "world-wide" mission by cutting almost all of its European language programs and declaring its intention to fire the full-time tenured faculty who teach French, Russian, Italian, and the classics. At the same time, Albany cut its theater major.

I'd like to walk through the logic behind these particular cuts, because they're a striking example of how American universities are changing, and an illustration of the changes most critics of "hidebound" and "old-fashioned" universities would like to enact. Why did the President of SUNY Albany pick these programs for cutting?

The kneejerk response is that all of those programs were somehow "impractical." We all know how impractical the humanities are, right? But a few moments' thought suggests that this is wrong. There are a number of majors, in the humanities or out, that are probably less practical as employment training than the programs that have been cut. I won't single out any for disrespect, but SUNY is retaining some humanities programs that are less obvious preparation for a specific career than a BA in French is. It also has a number of social-sciences and natural-sciences majors which, to put it delicately, are perhaps more specialized than a sound undergraduate degree would be, and which certainly don't constitute a professional credential in their fields. (If you need a graduate degree in a field to get a job, and graduate students in that field have typically majored in biology or chemistry or economics first, the existence of the undergrad major strikes me more as marketing than education.) After all, foreign-language majors can easily take their skills to other industries, but at the very least they're preparing for a possible career as high-school teachers. Cutting the BA and MA in French isn't about getting rid of frivolous or impractical majors, unless New York high schools are no longer hiring French teachers.

Theater, which also sounds like a flaky liberal-arts major, is also a clearly pre-professional program, which trains directors and theatrical designers as well as actors. There are actual jobs for lighting designers, set designers, and costume designers, about 150 miles from Albany, and having solid professional training in those fields is a serious help. SUNY Albany, which is three or four hours away from both Broadway and Montreal, just cut its theater major and its French major. Real-world value was not the issue.

The reason that these programs were cut is not because they were flaky or worthless. It is because they were expensive. Every one of those fields demands labor-intensive instruction by highly trained specialists. There is no way to put any of these fields on a mass-instruction basis.

You learn Russian, if you're actually going to learn Russian, by taking a number of small, labor-intensive classes over a few years. There's no way to turn Russian class into a large lecture, where three hundred kids sit and look at Power Points about how to decline nouns. No one can even propose that with a straight face. (In fact, secondary-school language teaching is already badly hampered by trying to fit the usual high-school class size. Classes of twenty-five or thirty teenagers, forty-five minutes a day, will achieve basic language proficiency in an average of seven thousand years.)

Nor can you turn the instruction over to technology ... Rosetta Stone isn't exactly filling America with linguists. You can send undergraduates to the language lab for extra drill instruction, but you can't have just the language lab and not the classes. What you're stuck with, as a university, is a set of courses that require a low and therefore expensive student-to-teacher ratio, one faculty member in a room with ten or twelve sophomores. And the teacher's expertise obviously determines how much the students can learn; if you put someone who's not entirely fluent in the target language or someone who has a funky accent into the classroom, the students don't learn properly. So you need teachers with specialized skills, but you can only charge a limited number of student-credit-hours for each one of those teachers.

(All of this also goes for most theater classes. You can't teach acting, directing, or costume design to large lecture groups. You need small hands-on courses where a teacher with serious professional expertise observes and guides the students' efforts.)

The only way to economize on language teaching at all is to turn it over to poorly-paid "part-time" faculty, lowering the overhead for each course. French 101 and 102 get taught by people without actual salaries or benefits, for a per-course fee. But you can't run a major or offer most serious advanced courses that way. You can hire people on the cheap to teach basic grammar and vocabulary, but students won't become fluent unless you're paying for an actual department. C'est la vie. Same thing goes for theater; you can pay someone a scandal wage to teach the introductory classes, and that will go fine. But you can't teach the advanced stuff without faculty who are further along in their careers. If you want to produce graduates who can get jobs in lighting design off-Broadway or off-off-Broadway, you need faculty who have already succeeded as lighting designers off- or on Broadway themselves.

So, let's be very clear about what SUNY Albany is doing. They are going to keep introductory-level language courses, taught by ill-paid and overworked adjunct instructors. But they will cut the advanced courses in French, Russian, Italian, and the classics and cut the faculty whose responsibility it was to make sure that instruction in those languages stayed up to standard. Few or no students will actually learn enough of those languages to be useful, but they will manage to fulfill language requirements. It's cheaper to give people credit for filling requirements than it is to teach them things. In theater, I suppose, there will be no more advanced classes, but likely they will retain some introductory courses as "fun" electives, which students can treat as a diversion instead of work, and which will not lead to any more demanding or instructive studies. This will all be inexpensive; it will probably actually show a bottom-line profit which can be used to underwrite other programs. The only cost will be that the students will realize that the courses don't actually teach them anything, and decide that a university education is about checking off boxes instead of learning. That attitude will carry over into their other classrooms.

But have no fear: SUNY Albany will keep its "spectacular" Performing Arts Center, even if they're not educating performing artists anymore. And they will continue to boast of their "nearly 500 study abroad programs," including programs in France, Italy, and Russia. How is that possible? For many of those programs, there is "NO previous study required" (caps in the original), as SUNY Albany would like you to know. Study-abroad programs, unlike teaching languages, are a cash cow for universities, with a high profit margin.

So, when you hear people talking about how the American university needs to be "transformed" and how outdated models need to be swept away, or how universities should be run "more like a business," remember that this is what is being proposed: a shift to the lowest-cost instruction available, and an emphasis on "productivity" in terms of easily measurable units, such as credit hours and credentials, rather than on difficult-to-quantify questions like student learning. Teaching students to speak another language is expensive. Certifying that they sat through a language class can be very cheap indeed.

The operation of the free market, which will supposedly make universities innovative and forward-thinking, actually produces more old fashioned big lectures, in which a single faculty member can be paid to teach several hundred students at once. That format is enormously inefficient in terms of student learning; big lectures are clearly less effective than small-group teaching in every field, but when the lecturer is teaching history or economics schools can call the results good enough. This is about economics, rather than teaching economics.

A freer, more economically "rational" market does not produce higher-quality goods in this example, or lower prices. Rather, it leads to lower-quality instruction for increasing prices, with a few flashy deluxe items, such a spring semester in Milano for monolinguists, which exact a hefty price premium for the shopping experience. Welcome to the 21st century.

Palin vs. the Tea Party

cross-posted at Dagblog

Mudflats has obtained e-mails revealing Todd Palin's anger at Joe Miller, the Republican Tea Partier nominee for Senate from Alaska. They also have e-mails detailing Miller's inside-the-campaign response:

I just found this in my inbox. This is what we're dealing with. Note the date and the complete misconstruction of what I said.

Holy cow.

Yes, Joe. That is what you were dealing with. The rest of us kinda suspected.

Here's the deal: Sarah Palin did in fact put serious backing behind Miller to knock off incumbent Senator Lisa Murkowski, a long-time political enemy of Palin's. Then, as a nominee running for Senate, Miller got asked on Fox if Palin were qualified for President. Miller, trying to win his own election this year instead of someone else's two years down the road, said that there were a lot of great Republican candidates. Not an endorsement, but also pretty standard campaign-season non-commitment. And that's where his Palin troubles began.

Todd Palin, at least, was enraged that Miller didn't volunteer a full-throated endorsement of Sarah for President, before Palin has even admitted that she is running:

Sarah put her ass on the line for Joe and yet he can't answer a simple question " is Sarah Palin Qualified to be President." I DON'T KNOW IF SHE IS.

That's Todd Palin, master of the aggrieved and inaccurate paraphrase. Give him a hand, folks.

The e-mail indicates that a fund-raising letter and a Facebook post backing Miller will be held back in retaliation. And he urged Miller to feel more compassion for the sufferings of the martyred St. Sarah:

Put yourself in her shoe's Joe for one day.

What's brilliant about this is that Palin now has no horse to back in her homestate Senate race. She's feuding with her own protege, Miller, before he's won. (And if you punish a protege before they get into office, they will always know that they won despite you.) Murkowski is a long-standing nemesis whose career Palin just tried to end. And the Democrat's a Democrat. No matter who wins, Palin doesn't.

And this is Reason #467 why Palin will never be President. She attacks her own allies. Because she and her inner circle see enemies everywhere, they eventually have enemies everywhere.

She has an outrageous sense of entitlement that has nothing to do with sound strategy. This fight is about an endorsement that no politician would expect and which wasn't even worth anything. Palin didn't need Miller's backing at this point. She and Todd simply believe that she was owed it. If Miller wins, he could surely have been counted on to endorse Palin later on, when it actually mattered and when his endorsement was worth a damn. But he won't be making any endorsement like that now. And no one else will, either. No matter who wins the Senate seat from Alaska, they are going to work against Palin. In fact, it's the Republicans who distrust and dislike her the most.

Even worse for a politician, the "put yourself in her shoe's" remark suggests that the people closest to Palin genuinely view her to be suffering like Joan of Arc. That's not a sound or sane view of the world. Palin has attained enormous wealth and fame at whiplash speed, on the basis of very very few qualifications of any kind. She is one of the most fortunate human beings ever to have walked the Earth. If she views that career as a source of grievance and resentment, she will never have a happy day in her life, and she will never cease lashing out at people who have helped her and might continue doing so. That's no way to win anything.

Monday, October 04, 2010

Can You Repeat That in English? We're Global.

cross-posted @ dagblog

University administrators in the United States currently have two diametrically opposed habits.

First, they love to proclaim that their university is becoming more "global." You hear this all the time.

Second, they tend to cut foreign languages from the curriculum.

So, for example:

Strategically located in the state capital of New York, the University at Albany is an internationally recognized public research institution that brings "The World Within Reach" to nearly 18,000 students at the graduate and undergraduate levels.

But this week the President of SUNY Albany has decided to fix the school's budget programs by cutting French, Italian, Russian, and classics. (Theater, too.) And he told the French department they can't admit any more majors and all of them should look for other jobs.

The world will still be in reach, but SUNY's students won't be able to read it.

Eight months back it was the University of Iowa getting rid of German.

University administrators want to think globally. In English.