Recommended Reading & Viewing

Cheryl Rofer:

October 24th, 2011 at 11:46 am

Hi Mark –
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I’ve been looking around at writing on R2P, of which there is quite a bit. I’m beginning to get the sense that Anne-Marie Slaughter’s take on it is fairly idiosyncratic, and that a lot of people are looking at it in a number of different ways.
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I note that the paper you link contains a lot of references to her work. It’s worth refuting, but I am beginning to wonder how representative it is of the R2P discussion generally.

J.ScottShipman:

October 24th, 2011 at 2:44 pm

The Taleb video is spot-on! Thanks for sharing!

Curtis Gale Weeks:

October 24th, 2011 at 3:14 pm

The Taleb video is interesting.  Odd though that the OWS protesters are being considered a potential Marxism 2.0—but that government ownership of the banking industry, or at least of those banks who receive or will receive bailouts, is not being labeled Communism 2.0.
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There are times (and I’m hefting my shield above my head in anticipation of arrows) that I think China’s system of centralized controls, 5-year plans (or plans of longer duration), will win out in the end.
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I believe there is some current problem w/ the fundamental structure of the banking system in America, problems w/ the idea of usury altogether—although I don’t need to go back hundreds of years to highlight the problems of usury.  OTOH, taking Taleb’s consideration of risk-reward analysis, we might go back to Ham.’s code.  One of the essential strategies of a capitalist system, at least one used by the very successful, is to limit risk as much as possible while increasing earnings.  Naturally, such a strategy can be used by tyrants and the welfare class as equally as by the top tier of bankers and other industry leaders; the largest difference between all groups is the degree to which each group (or any individual) comes to an accurate assessment of risks.  Guaranteed government bailouts, for the banks OR for the welfare class, present an easy out:  easier assessment of risk.  At least until the whole system collapses or some new, viral (or at least virile) political movement forms.

Curtis Gale Weeks:

October 24th, 2011 at 3:23 pm

As a side note, on usury:  The ability to "create wealth" from nothing, or not tied to production, may be another way to "limit risk"….?  Is this not so?  That imaginary surplus of capital becomes a buffer…..But this might be too granular.  Granted, the key to limiting the formation of destructive bubbles (which may be created by the creation of imaginary capital) might be competition—as a risk factor, on top of other risk factors.  And yet, it’s competition that might lead some to create bigger buffers, buffers in the form of bubbles.
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There really ought to be some fiduciary-relevant laws, or stronger laws, regarding the top-level skimmers/schemers who may well drive a business into the ground, may well help drive a nation into the ground, but who, themselves, get to leave the mess w/ a nice golden parachute etc….

MikeF:

October 24th, 2011 at 3:28 pm

This may be a silly suggestion, but it’s one that I’ve carried ever since my first finance class.  Why is the home loan amortized? If we really want to push wealth back to the people, then why don’t we just switch mortgages to a normal rate where 90% of the payment would go towards principle instead of interest?  The banks still make a fair profit, and the consumer actually pays off his debt.

Lynn Wheeler:

October 24th, 2011 at 3:32 pm

Besides centralized planning and open market, another metaphor is that wallstreet is a very dark market.

Having done work on what is now called “electronic commerce” and some open financial transaction standards … in the late 90s, I was asked in to NSCC … this was before it merged with DTC
http://en.wikipedia.org/wiki/Depository_Trust_&_Clearing_Corporation

to do some work on improving integrity of trading transactions. After putting in some work on the effort … I was told that it was suspended because a side-effect of the integrity work would have vastly improved the transparency and visibility … which appears to be antithetical to wallstreet culture

In the congressional Madoff hearings, the person that had tried unsuccessfully for a decade to get the SEC to do something about Madoff, was asked if new regulations were required. His reply was that while new regulations might be required, much more important was (changing to) transparency and visibility.

past reference to dark market activity is widespread and traders have no worry that SEC will do anything about it
http://www.nypost.com/seven/03202007/business/cramer_reveals_a_bit_too_much_business_roddy_boyd.htm

the DTCC wiki article also references DTCC not releasing trading details that might show the underbelly of dark market activity

There is recent report out of germany that looked at institutionalized psycopaths and wallstreet traders and concluded that wallstreet traders are worse than the institutionalized psycopaths. Earlier there were studies classifying large percentage of wallstreet traders and investment bankers as sociopaths. a couple past posts mentioning sociopath
http://www.garlic.com/~lynn/2010e.html#77 Madoff Whistleblower Book
http://www.garlic.com/~lynn/2011b.html#59 Productivity And Bubbles

zen:

October 25th, 2011 at 2:37 am

Hi Cheryl,
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I think you are correct that AMS may be putting her own twist on R2P that may be out of sync with some other R2P advocates. However, I suspect she is more influential with this administration than all the rest combined, which means her spin has a good chance of carrying the day, particularly when supported by Rice and Powers.
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Hi Curtis,
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"5 year plans" is probably not a good way to describe the role of central authorities in China’s economy – provincial party apparatchiks and entrepreneurial bigwigs with Party patrons carry a lot of weight, and sometimes defy Beijing on noncritical issues. There seems to be a lot of latitude for wheedling/negotiating/passive-aggressive posturing in the system so long as Beijing’s ultimate supremacy is not directly challenged and local leaders (party and private) are delivering economic growth. That said, I am not a Sinologist and an willing to defer to the serious China-watchers