Nouriel Roubini is always dressed in black-and-white.
I have known him for nearly two years, and have seen him in a variety of situations -- en route to class at New York University's Stern Business School, where he's a professor; over a glass of wine in his boyish loft in Manhattan's Tribeca; at an academic conference, seated sagely on the dais; at a bohemian party in Greenwich Village, at . . . oh . . . 3 a.m. -- and he always, always wears a black suit with a white linen shirt.
And so, in black-and-white he was, earlier this week, when he rushed into the office of Roubini Global Economics, his consulting firm in downtown Manhattan, and offered a breathless apology to this correspondent, who'd been waiting for half an hour. "Really sorry I'm late! Charlie Rose taped for way longer than he said he would."
Mr. Roubini -- a month short of 50 -- is in huge media demand, the nearest thing to a rock-star among the economists who hold our fate in their hands these days. The peculiar thing, of course, is that he's in demand because he specializes in predictions of gloom. (He has earned himself the sobriquet of "Doctor Doom.") In person, though, he's anything but a downer.
The man has instant impact on public debate. An idea he floated only last week -- that our "zombie banks" be temporarily nationalized -- aired first on Forbes.com, where he writes a weekly column. It has evolved, in the space of just a few days, from radical solution to almost received wisdom.
Last Sunday on ABC, George Stephanopoulos asked Lindsey Graham, the conservative Republican senator, what he thought about all this talk of bank nationalization. Mr. Graham said that he wouldn't take the idea off the table. And on Wednesday, Alan Greenspan told the Financial Times that "it may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring."
Mr. Roubini tells me that bank nationalization "is something the partisans would have regarded as anathema a few weeks ago. But when I and others put it in the context of the Swedish approach [of the 1990s] -- i.e. you take banks over, you clean them up, and you sell them in rapid order to the private sector -- it's clear that it's temporary. No one's in favor of a permanent government takeover of the financial system."
There's another reason why the concept should appeal to (fiscal) conservatives, he explains. "The idea that government will fork out trillions of dollars to try to rescue financial institutions, and throw more money after bad dollars, is not appealing because then the fiscal cost is much larger. So rather than being seen as something Bolshevik, nationalization is seen as pragmatic. Paradoxically, the proposal is more market-friendly than the alternative of zombie banks."
In any case, Republicans must now temper their reactions, he says. "The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."
So, will the highest level of government be receptive to the bank-nationalization idea? "I think it will," Mr. Roubini says, unhesitatingly. "People like Graham and Greenspan have already given their explicit blessing. This gives Obama cover." And how long will it be before the administration goes in formally for nationalization? "I think that we're going to see the policy adopted in the next few months . . . in six months or so."
That long? I ask. "Six months from now," he replies, "even firms that today look solvent are going to look insolvent. Most of the major banks -- almost all of them -- are going to look insolvent. In which case, if you take them all over all at once, you cause less damage than if you would if you took over a couple now, and created so much confusion and panic and nervousness.
"Between guarantees, liquidity support, and capitalization, the government has provided between $7 trillion to $9 trillion of help to the financial system. De facto, the government is already controlling a good chunk of the banking system. The question is: Do you want to move to the de jure step."
Yet another reason why bank nationalization is a good idea, Mr. Roubini continues, is that "we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.
"So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they're stronger! Nationalization -- or 'temporary receivership,' if you like, if the N-word is a political liability -- is an occasion to undo the sort of consolidation that has created an even bigger systemic problem. And the only way to do it is by essentially taking them over and breaking them up."
Here, I ask Mr. Roubini whether he has been more right -- more prescient -- in his reading of the economic downturn than all the other famous bears in America. After all, judging by the attention paid to him in the press, it is hard not to conclude that he is the leading guru of the current recession, or "near-depression," as he often calls it. My question, remarkably, induces in him some diffidence. "I don't want to personalize the analysis, you know . . . because, first of all, there were many people who got many of the elements right.
"People like [Robert] Shiller were very worried about the housing bubble. People like Steve Roach were worried about an economy based on asset bubbles leading to consumption bubbles that were unsustainable. People like Ken Rogoff talked about global imbalances in the current account deficit not being sustainable. Nassim Taleb has been worrying for a while about 'fat tail' events . . . . So lots of people signaled concern about things. I was one of those who put the dots together and thus gave a more fleshed-out picture."
To Mr. Roubini, the most interesting question isn't the one of who got it right. Instead, he asks why we "over and over again, get into these periods of irrational exuberance, when not only is there an asset bubble and a credit bubble, but people believe these are sustainable over a long time -- Wall Street, policy makers, rating agencies, academics, journalists . . . ."
What exactly is Nouriel Roubini's economic philosophy? "I believe in market economics," he says, with some emphasis. "But to paraphrase Churchill -- who said this about democracy and political regimes -- a market economy might be the worst economic regime available, apart from the alternatives.
"I believe that people react to incentives, that incentives matter, and that prices reflect the way things should be allocated. But I also believe that market economies sometimes have market failures, and when these occur, there's a role for prudential -- not excessive -- regulation of the financial system. The two things that Greenspan got totally wrong were his beliefs that, one, markets self-regulate, and two, that there's no market failure."
How could Mr. Greenspan have been so naïve, I ask, hoping to get a rise. "Well," says Mr. Roubini, "at some level it's good to have a framework to think about the world, in which you emphasize the role of incentives and market economics . . . fair enough! But I think it led to an excessive ideological belief that there are no market failures, and no issues of distortions on incentives. Also, central banks were created to provide financial stability. Greenspan forgot this, and that was a mistake. I think there were ideological blinders, taking Ayn Rand's view of the world to an extreme.
"Again, I don't want to personalize things, but the last decade was one of self-regulation. But in the financial markets, without proper institutional rules, there's the law of the jungle -- because there's greed! There's nothing wrong with greed, per se. It's not that people are more greedy now than they were 20 years ago. But greed has to be tempered, first, by fear of losses. So if you bail people out, there's less fear. And second, by prudential regulation and supervision to avoid certain excesses."
How does Mr. Roubini think the media has covered the financial crisis? "The problem," he says -- after first stating to me that he intends "no offense!" -- "is that in the bubble years, everyone becomes a cheerleader, including the media. This is the time when journalists should be asking tough questions, and I think there was a failure there. The Masters of the Universe were always on the cover, or the front page -- the hedge-fund guys, the imperial CEO, private equity. I wish there had been more financial and business journalists, in the good years, who'd said, 'Wait a moment, if this man, or this firm, is making a 100% return a year, how do they do it? Is it because they're smarter than everybody else . . . or because they're taking so much risk they'll be bankrupt two years down the line?'
"And I think, in the bubble years, no one asked the hard questions. A good journalist has to be one who, in good times, challenges the conventional wisdom. If you don't do that, you fail in one of your duties."
http://online.wsj.com/article/SB123517380343437079.html
High court to hear immigrant ID theft case
WASHINGTON (AP) — Ignacio Carlos Flores-Figueroa, an undocumented worker from Mexico, made a curious and undeniably bad decision. After working under an assumed name for six years, he decided to use his real name and exchanged one set of phony identification numbers for another.The change made his employer suspicious and the authorities were called in. The old numbers were made up, but the new ones he bought happened to belong to real people. Federal prosecutors said that was enough to label Flores-Figueroa an identity thief.The Supreme Court will hear arguments Wednesday on prosecutors' aggressive use of a new law that was intended to strengthen efforts to combat identity theft. In at least hundreds of cases last year, workers accused of immigration violations found themselves facing the more serious identity theft charge as well, without any indication they knew their counterfeit Social Security and other identification numbers belonged to actual people and were not made up.The government has used the charge, which carries a mandatory two-year minimum prison term, to persuade people to plead guilty to the lesser immigration charges and accept prompt deportation. Many of those undocumented workers had been arrested in immigration raids.The case hinges on how the justices resolve this question: Does it matter whether someone using a phony ID knows that it belongs to someone else?
The government, backed by victims' rights groups, says no. The "havoc wrecked on the victim's life is the same either way," said Stephen Masterson, a Los Angeles-based lawyer, in his brief for the victims' rights groups.
On the other side, Flores-Figueroa and more than 20 immigrants' rights groups, defense lawyers and privacy experts say that the law Congress passed in 2004 was aimed at the identity thief who gains access to people's private information to drain their accounts and run up bills in their name. Surveys estimate that more than 8 million people in the United States are victims of identity theft each year.
Flores-Figueroa acknowledges he used fraudulent documents to get and keep his job at a steel plant in East Moline, Illinois. But he "had no intention of stealing anyone's identity," his lawyers said in their brief to the court. He traveled to Chicago and bought numbers from someone who trades in counterfeit IDs.
The government, backed by victims' rights groups, says no. The "havoc wrecked on the victim's life is the same either way," said Stephen Masterson, a Los Angeles-based lawyer, in his brief for the victims' rights groups.
On the other side, Flores-Figueroa and more than 20 immigrants' rights groups, defense lawyers and privacy experts say that the law Congress passed in 2004 was aimed at the identity thief who gains access to people's private information to drain their accounts and run up bills in their name. Surveys estimate that more than 8 million people in the United States are victims of identity theft each year.
Flores-Figueroa acknowledges he used fraudulent documents to get and keep his job at a steel plant in East Moline, Illinois. But he "had no intention of stealing anyone's identity," his lawyers said in their brief to the court. He traveled to Chicago and bought numbers from someone who trades in counterfeit IDs.
Had he been caught while using the fictitious name and numbers that went with it, he could not have been charged with the more serious offense.
Federal appeals courts in St. Louis, which ruled against Flores-Figueroa, Atlanta and Richmond, Virginia, have come down on the government's side. Appeals courts based in Boston, San Francisco and Washington, D.C., have ruled for defendants.
The government's use of identity theft charges in immigration cases was on full display in last year's raid on a kosher slaughterhouse in Postville, Iowa. Authorities charged 270 undocumented workers with identity theft, including its threat of two years in prison.
Chuck Roth, litigation director for the National Immigrant Justice Center in Chicago, called the charge "a bludgeon" that was intended to elicit guilty pleas to lesser charges. Roth's group joined one of the briefs supporting Flores-Figueroa.
All 270 workers accepted plea deals in which they also agreed not to contest deportation.
An additional 100 workers arrested in the same raid were using unassigned numbers and faced charges with little prospect of prison time. http://www.usatoday.com/news/washington/judicial/2009-02-22-scotus-immigrant-id_Nhtm
Mayor Daley has argued that security and terrorism won’t be an issue if his Olympic dreams come true because, by 2016, there will be a surveillance camera on every street corner in Chicago.
But even before that blanket coverage begins, the “Big Brother’’ network is being put to better use.
Call takers and dispatchers now see real-time video if there is a surveillance cameras within 150 feet of a 911 call, thanks to a $6 million upgrade to the city’s “computer-aided dispatch” system.
When live video appears, call takers can pan, tilt and zoom those cameras to get the best possible view of a crime or disaster scene.
“As a first responder, I can’t tell you how important it is to have a set of eyes on an emergency scene prior to your arrival. The valuable information they provide from the camera network can ultimately mean the difference between life and death,” said Ray Orozco, executive director of the city’s Office of Emergency Management and Communications.
“Whether you send one ambulance or three, two squad cars or four, it all depends upon the information we are able to gather from the 911 caller,” said Orozco, a former fire commissioner.
During a December test, live video was used to catch a petty thief in the act of sticking his hand in a Salvation Army kettle outside Macy’s on State Street.
But, the crime-fighting potential is “limitless,” said Police Superintendent Jody Weis.
“You know what the suspect’s vehicle might be. It can give us instant leads. . . . We may get some information from that where we may not even respond to that location. We could actually get ahead of it and go to a place where that vehicle maybe was last seen or the individual might be running to,” Weis said.
And, “If we can warn our officers of any dangers they’re facing ahead of time, it’s a tremendous advantage.”
Although the city’s vast surveillance network includes cameras installed at private businesses, universities and homes, Orozco said civil libertarians have nothing to fear.
“We do not and we will not take access to any camera inside of a building,’’ he said. When the city accesses private cameras, workers only see “what you would see if you were sitting on a park bench in front of that building,” he said.
In 2004, City Hall used a $5.1 million federal homeland security grant to install 250 cameras at locations thought to be at high risk of a terrorist attack and link them and 2,000 existing city cameras to the 911 center.
Chicago then launched “Operation Virtual Shield,’’ by linking 1,000 miles of fiber cable to a unified “homeland security grid’’ — complete with hundreds of additional cameras and sensors to monitor the city’s water supply and detect chemical and biological weapons.
On Thursday, Orozco refused to say how many cameras are currently linked to the 911 center. But, he reiterated Daley’s earlier promise.
“We’re going to grow the system until we eventually cover one end of the city to the other,” he said.
http://www.suntimes.com/news/politics/1440402,mayor-daley-emergency-surveillance-cameras.article">http://www.suntimes.com/news/politics/1440402,mayor-daley-emergency-surveillance-cameras.
Buying some wine? Spy cameras will be watching
Big Brother CCTV cameras are to be fitted inside shops and supermarkets on the orders of the state to keep track on anybody buying alcohol.
A law is being quietly pushed through Parliament giving councils the power to order licensed premises to fit the surveillance cameras. Pubs will also be covered.
The footage of people innocently buying a bottle of wine in a shop or a pint of beer in a bar must be stored for at least 60 days, and be handed over to the police on demand.
Anyone buying alcohol - in pubs, shops and supermarkets - will be monitored by CCTV cameras
Critics say it will mean that citizens will now be tracked everywhere they go. The UK already has more than four million closed-circuit TV cameras covering the streets – the largest number in the world.
Cars are also automatically monitored using cameras that check registration plates. Now shops and pubs will also be covered.
The measures form part of the Policing and Crime Bill, but have not been highlighted by Ministers.
Under a code of conduct, which will be enforced by the Bill, any business that intends to sell alcohol will have to agree to install the cameras.
Phil Booth, of the NO2ID privacy campaign, said: ‘We are already a country with more CCTV cameras than anywhere else in the civilised world, but this law is systemising the surveillance of a nation. People will be treated like suspects wherever they go.’
James Brokenshire, a Tory home affairs spokesman, said: ‘The risk is that these provisions could be used as a way to impose blanket CCTV requirements where they just aren’t necessary. This mustn’t be another way of extending the surveillance society by the back door.’
Earlier this week, the Mail revealed how police were warning pubs they would not support their licensing applications unless they agreed to train the intrusive cameras on their customers.
The first blanket policy has been introduced in the London borough of Islington, where all applicants wanting a licence to sell alcohol are being told they must fit CCTV.
Other forces are adopting similar tactics. But the planned new law goes much further, as it will allow councils – which ultimately hand out all licences – to insist on the CCTV cameras.
Ministers have also been restricting the public’s right to ‘watch the watchers’.
Earlier this week, a law came into force which carries a maximum ten-year jail term for anybody taking a picture of a police officer if it is ‘likely to be useful to a person committing or preparing an act of terrorism’.
Home Office Minister Alan Campbell, who is piloting the CCTV measure through the Commons, recently admitted that he couldn’t remember the last time he was in a pub.
Mark Hastings, spokesman for the British Beer and Pub Association, said: ‘It’s an extraordinary admission from someone who is proposing measures that, on the Government’s own admission, will cost the pub sector hundreds of millions of pounds a year.
‘It shows how disconnected he is from the realities of what it’s like trying to stay in business in the current environment.’
The Home Office said the clause in the Bill was intended to allow police and councils to target premises where problems were occurring, such as underage sales.
It was not meant to penalise businesses that act responsibly. It will be up to councils to decide which premises must have cameras, and they will be trained on the areas where alcohol is sold.
http://www.dailymail.co.uk/news/article-1151505/Buying-wine-Spy-cameras-watching.html
Satanist inmate sues county
BY GREG TUTTLEOf The Gazette StaffA Billings man in prison for drug possession has filed a $10 million federal lawsuit against Yellowstone County for alleged civil-rights violations, including interference with his satanic religious practices.Jason Paul Indreland claims in the U.S. District Court lawsuit that county jail staff took from him a religious medallion, denied him access to religious material and ridiculed and punished him for his religious beliefs.The lawsuit also alleges that Indreland was denied medical care for his drug addiction, that he was placed in situations where violence was expected and that he suffered harassment and retaliation while incarcerated.Indreland said he has been a practicing Satanist for the past decade and the confiscated medallion was a "protective symbol" in his religion. The lawsuit claims jail staff refused to return the medallion or allow Indreland access to a "Satanic Bible or Book of Satanic Rituals."
Indreland, 35, is incarcerated at Montana State Prison for a term of five years, with two years suspended, for felony drug possession. Indreland was convicted of the crime after Billings police found him with 15 grams of methamphetamine in March 2007.Indreland has previous felony convictions in Yellowstone and Stillwater counties for bad checks and theft.Indreland is not represented by an attorney in his suit. An attorney for the county, Kevin Gillen, said the county has not been served with the claim and could not comment.Indreland initially filed the handwritten federal lawsuit last March while he was still held at the county jail. The lawsuit names as defendants the Yellowstone County Board of Commissioners, Sheriff Chuck Maxwell, Undersheriff Jay Bell and Sheriff's Capt. Dennis McCave, who oversees county jail operations.U.S. Magistrate Judge Carolyn Ostby reviewed the complaint and in October issued an order permitting Indreland to file an amended complaint. Ostby said in the order that there were several legal flaws in the original claim and it would be dismissed if not amended to comply with her order.Indreland filed the amended complaint Nov. 12. In that document, Indreland named numerous members of the jail staff he alleges participated in violating his civil rights. Among the claims, Indreland alleges jail staff placed "Christian natured greeting cards under (his) cell door describing how he was going to undertake a huge change in his life and how Jesus was ready to save and accept him."The lawsuit seeks $3 million for alleged civil-rights violations, $2 million for "the deprivation of his rights and injuries both mental and physical," and $5 million in punitive damages.
http://www.billingsgazette.net/articles/2009/02/20/news/local/45-fruitsofthedevil.txt
Posts
No comments:
Post a Comment