Featured Find: Lake Vostok!

Russian scientists have acheived what's being called the moon landing of our generation:

MOSCOW — In the coldest spot on the earth’s coldest continent, Russian scientists have reached a freshwater lake the size of Lake Ontario after spending a decade drilling through more than two miles of solid ice, the scientists said Wednesday.

A statement by the chief of the Vostok Research Station, A. M. Yelagin, released by the director of the Russian Antarctic Expedition, Valery Lukin, said the drill made contact with the lake water at a depth of 12,366 feet. As planned, lake water under pressure rushed up the bore hole 100 to 130 feet pushing drilling fluid up and away from the pristine water, Mr. Yelagin said, and forming a frozen plug that will prevent contamination. Next Antarctic season, the scientists will return to take samples of the water.

The first hint of contact with the lake was on Saturday, but it was not until Sunday that pressure sensors showed that the drill had fully entered the lake. Lake Vostok, named after the Russian research station above it, is the largest of more than 280 lakes under the miles-thick ice that covers most of the Antarctic continent, and the first one to have a drill bit break through to liquid water from the ice that has kept it sealed off from light and air for somewhere between 15 million and 34 million years.

Featured Find: Jason Kuznicki's The Machinery of... whatever

From start to finish, this is probably the best piece I've read on the tenth anniversary of the 9/11 attacks:

September 11 was the day “Orwellian” stopped being an argument against anything. It became a checklist. My country started collecting various-sized bits of Nineteen Eighty-Four like so many grim commemorative postage stamps. Constant surveillance. Constant warfare. Constant suspicion. Last week’s enemy is this week’s friend, is next week’s enemy, and woe is you if you can’t keep up—Gadhafi, Putin, Arafat, Chirac. Censorship? Making steady progress. We didn’t get Victory Gin, but we did get Freedom Fries; close enough for government work. Oh yes, and torture. Because we are the greatest hegemonic power, and because we can do no wrong, and in the end, just because we fucking can, okay?

Who though is this “we”? It is the deepest, most festering wound of 9/11.

Someone does something shameful, somewhere, maybe just once, usually in secret. Someone’s data mining. Someone’s spying on citizens. Someone imprisons, with neither an indictment nor any other cover of law. Someone puts people on a secret plane, to a place where electrodes and power drills are the standard interrogation protocol. Someone cuts out the middleman and just tortures in place. Someone orders American citizens assassinated. Someone starts an illegal war.

In a braver time, these acts would have kindled a revolution.

Someone, however, is an agent of the state. Therefore someone wasn’t the real actor. No, we did it—that’s the core of the lie, right here, that that someone is us. Sooner or later, we find out about the thing we did. We say, in the awful light of morning, that we did it because we are fighting a dirty enemy, and maybe we have to embrace the dark side just a little bit if we’re going to win.

But really we did it because we were afraid. But really, we didn’t do it. But really, the ones who did it will keep right on doing it.

That’s what’s changed, post-9/11. In the end, we didn’t have the will to fight. We fought the terrorists, sure, and plenty of others who didn’t even attack us. But we didn’t have the will to fight as they took our civil liberties away. We didn’t even have the will to punish them afterward. The word “we” is the pawl on the ratchet of state power. It’s the little catch that ensures there’s no backsliding. The we clanks ever onward. The sun shines, the rain falls; the economy is good, or it’s bad. It doesn’t matter. The abuses haven’t gone away. We’ve mostly just gotten used to them.

Featured Find: Banks, Bailouts, and Moral Hazard

Dave Schuler responds to a question from a reader. Here is an excerpt:

This post is a response to a question asked of me in comments. Here’s the meat of the comment:

"My main point is its the incentives. Bailouts create a bad incentive structure and trying to stop that is going to be costly. The longer it goes on the costlier it gets. Since we’ve already done this round of bailouts we have to wait for the next, and my claim/prediction/forecast/whatever is that the next round will be even bigger. And the fallout from not bailing out will be even larger than if we hadn’t done it now."

and, if I understand it properly, the question is what do I think?

I disagreed with the way the major banks were dealt with in 2008 and 2009. I thought it was costly, created moral hazard, and, worst of all, didn’t address the underlying problems of the banks. My preference was to do something analogous to what the Swedes did with their banks in the early 1990s and to what we did with S&Ls following the S&L crisis here in the late 1980s.

To refresh your memories as a result of misfeasance, malfeasance, and nonfeasance nearly 750 S&Ls and roughly 1,600 banks failed between roughly 1985 and 1991. Volumes have been written about the crisis, its aftermath, and its implications and I’m going to explore it much farther here. I only want to make two points about it:

• The facts of it should dispel any claims of our having any particular aversion to nationalizing banks.
• The scale of it should call into doubt any ideas that dealing with one very, very large bank or even several very, very large banks is impractical. If dissolving Citibank is more complex than dissolving 750 S&Ls, I cannot take arguments about increased returns to scale seriously.

I also think there are two distinct issues both of which are sometimes bundled together under the heading “moral hazard” but which are actually quite different. Moral hazard is properly considered the actions a particular course of actions incentivizes going forward. When you reward banks by giving them the largest payday loans in history to tide them over until their next binge, pay interest on reserves, and allow them to earn interest on Treasuries, you convince the managers of those banks that they have a property interest in the U. S. Treasury which will indemnify them against loss, come what may. When you bestow these gifts only on the largest banks while closing the smaller banks so their business can be gobbled up by larger ones, the ensuing consolidation increases the necessity of preserving future institutions whose failure would present systemic risk down the road. If a bank is too big to fail it is too big to exist.

The piece is short and offers what is probably the most cogent and concise description of the present moral hazard with regard to bailouts I've come across.

Featured Find: Stabilizing into a Crisis

Joe reads Ezra Klein regularly. I read him sometimes. I find him unusually penetrating and accurate but rather boring and irrelevant most of the time (just my opinion); so while I don't hate reading him, I simply consider reading other writers to be better investments of my time. This time is different. This Ezra Klein piece is passionate, it resonates, and I think, it's accurate - it's perhaps one of the best descriptions of our (economic) time I've come across:

But the Dow Jones industrial average isn’t diving because spending has risen, deficits have grown or stimulus policy has changed. It’s diving because of forces Washington can’t control, and in many cases, doesn’t understand very well. How many members of Congress do you think could give a coherent account of what has happened to oil or steel prices over the past three years? Or what’s happening in the euro zone? Or to the yuan?

A dramatic gap has opened between the economy as Washington sees it — and wants to intervene in it — and the economy that exists. Whatever weak recovery we might have hoped for is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia and much more. Globally, it’s been an almost uninterrupted run of crises and bad luck. Meanwhile, Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis. 

The whole article can be read in three minutes. I highly recommend it.

Featured Find: My Life as an Undocumented Immigrant

Pulitzer Prize winner Jose Antonio Vargas drops a bomb in the New York Times: he's an undocumented immigrant.  Immigration reform is near and dear to me: there is no reason why people like Vargas shouldn't be entitled to U.S. citizenship.  Immigrants are the engine of American progress.  Here is an excerpt from the Vargas article:

It’s been almost 18 years since I’ve seen my mother. Early on, I was mad at her for putting me in this position, and then mad at myself for being angry and ungrateful. By the time I got to college, we rarely spoke by phone. It became too painful; after a while it was easier to just send money to help support her and my two half-siblings. My sister, almost 2 years old when I left, is almost 20 now. I’ve never met my 14-year-old brother. I would love to see them.

Vargas writes:

I’ve decided to come forward, own up to what I’ve done, and tell my story to the best of my recollection. I’ve reached out to former bosses­ and employers and apologized for misleading them — a mix of humiliation and liberation coming with each disclosure. All the people mentioned in this article gave me permission to use their names. I’ve also talked to family and friends about my situation and am working with legal counsel to review my options. I don’t know what the consequences will be of telling my story.

Indeed, if the law is upheld, ten or fifteen prominent journalists could face criminal charges, and one of America's best reporters could be sent back to the Phillipines.  For what?

UPDATE: Chris Suellentrop has the story behind the story.

Featured Find: Osama bin Laden's American Legacy

Tom Engelhardt discusses Osama bin Laden's real significance:

As is now obvious, bin Laden’s greatest wizardry was performed on us, not on the Arab world, where the movements he spawned from Yemen to North Africa have proven remarkably peripheral and unimportant.  He helped open us up to all the nightmares we could visit upon ourselves (and others) -- from torture and the creation of an offshore archipelago of injustice to the locking downof our own American world, where we were to cower in terror, while lashing out militarily.

In many ways, he broke us not on 9/11 but in the months and years after.  As a result, if we don’t have the sense to follow Senator Aiken’s advice, the wars we continue to fight with disastrous results will prove to be his monument, and our imperial graveyard (as Afghanistan has been for more than one empire in the past).

At a moment when the media and celebratory American crowds are suddenly bullish on U.S. military operations, we still have almost 100,000 American troops, 50,000 allied troops, startling numbers of armed mercenaries, and at least 400 military bases in Afghanistan almost 10 years on.  All of this as part of an endless war against one man and his organization which, according to the CIA director, is supposed to have only 50 to 100 operatives in that country.