After two years, Neil Irwin looks back on the Standard & Poor (S&P) downgrade of the United States government from AAA to AA+. And he finds no evidence for it having affected the borrowing costs of the United States. But I’m afraid that Irwin is taking the whole thing too seriously. Even at the time, I don’t remember anyone thinking anything other than that it would not mean a thing. The only prediction I remember hearing was that S&P would embarrass itself. It turns out that S&P did not embarrass itself. It seems that everyone already knew that the ratings agencies are a joke.

There is a problem with articles like Irwin’s: they imply that the ratings agencies are held to some standards. But we know this isn’t true. Even before this ridiculous downgrading of American debt, we got the spectacle of the ratings agencies testifying in front of Congress after the financial crisis. All three of the ratings agencies had given investment grade ratings to subprime packages that shouldn’t have been rated above junk. But it wasn’t their fault. They were just exercising their first amendment rights to talk out their asses. It was just opinion and nothing more.

As far as that goes, I’m right with them. They have a right to charge people money for their useless opinions. The problem is not with them. I wish I were like them: I wish people would pay me billions of dollars for my opinion about investments. I have strong opinions about what’s happening in the tech sector. Anyone want one of my opinions for a few thousand dollars? In fact, I’ll offer a special to all you Frankly Curious readers: $999 and I will tell you what I think will happen in the tech sector or anything else. No takers? Well, you know how to get in touch me.

The problem we have more broadly is that those who run our investment industry are just a bunch of charlatans. I doubt that the people at Goldman Sachs think that the ratings agencies know what they’re talking about. But they use nice offices, drive nice cars, wear nice clothes. They can sell the ratings agencies as a sweetener to investors, “You don’t have to worry because these guys with nice offices, cars, and clothes say it’s safe.” And everyone on the inside feels good about this. Investment bankers say everyone knows the whole thing is corrupt. The ratings agencies know they are providing all the nice offices, cars, and clothes that the investment banks want. And the investors don’t find out about the scam until it’s too late.

After something like the financial crisis, you would think someone would step in and stop it. You know: someone like an umpire whose job it is to make the system fair for everyone. Someone who punishes the grifters and thieves. You know, some kind of governing body. If we had such a thing, I would think, after the crisis, they would have thrown some people in jail. They would have reorganized the whole system. They would have been clear that the farcical and inbred investment system had to change. It sure would be nice if we had such an institution.

I’m afraid that as well intentioned as Neil Irwin’s article is, it only feeds the beast that is our broken investment banking system. Because it may call out S&P in this one instant, but implies that the ratings agencies are something we can normally count on. And they aren’t. They are just a rotting core of pretend expertise that can never be held accountable.

See also: S&P and Anti-Meritocracy

So what is this stuff about Benghazi I wrote about earlier? Last Thursday, CNN broke a story suggesting that the CIA was running guns from Libya to Syria out of the Benghazi proto-embassy. This, supposedly explains the administration’s “cover up” of the attack. The big problem I see here is that the story is an answer to a question no reasonable person is asking. But okay, I’ll bite.

CNN claims that they’ve learned that “dozens” of CIA operatives were “on the ground” in Benghazi the night of the attack. I want to start with the vague number “dozens.” It literally means at least 24. Yet the article later claims that there were only 35 people total at the compound and that there were 21 at the annex, which is claimed to have been run by the CIA. Still, 21 is a lot of people. But why would this make us believe that it had (1) anything to do with gun running and (2) anything to do with the attack? CNN doesn’t even have a source for the first connection. All it says is this, “Speculation on Capitol Hill has included the possibility the U.S. agencies operating in Benghazi were secretly helping to move surface-to-air missiles out of Libya, through Turkey, and into the hands of Syrian rebels.” Note all the weasel words here: speculation, included, possibility. As for the second connection there is nothing at all.

The article also gives major time to Frank Wolf. He believes that we need to have public hearings with everyone who was in Benghazi the night of the attack. I’m all for that, but I don’t think that Wolf is an honest broker here. This is a man, after all, who thinks that Edward Snowden is a traitor. He’s said some nice things against the surveillance state, but I suspect if a Republican where in the White House, he wouldn’t even go that far. It seems to me just another Republican witch hunt with the vaguest of targets. After all, even the CNN article provides no reason to believe that anything the CIA was doing had anything to do with the attack. So what would Wolf’s hearings be but an open ended opportunity for the Republicans to snipe at the Democratic administration?

The strangest part of the CNN report is its discussion of CIA agents being given lie detector tests. According to three unnamed sources, people who were in Benghazi have been tested much more than usual regarding leaks to the press. There’s a fundamental question here, though: wouldn’t these unnamed sources be afraid they will be caught by all of this internal surveillance? Over the weekend, Max Ehrenfreund discussed this part of the story in more detail:

I am open to there being something to this story. In particular, I think we should know if the CIA is running guns into Syria. But the whole Benghazi attack line is a bridge too far. How long is the press going to jump every time Republicans make another unsubstantiated claim? There is a law of information accumulation that goes along with the idea of entropy. If you gather enough information, eventually you will end up with contradictions. If you look for scandals long enough, you will eventually find something that looks kind of like a scandal—whether it is or not. At this point, CNN and the Republicans are going to have to come up with a bit more than, “There were CIA agents in Benghazi and they might have been running guns.”

I’ve always wanted to be one of those people who could just take whatever food is on hand and make it into something wonderful. Today, I sort of did that.

I had about a pound of mushrooms that were getting close to that slimy state. The next door neighbor gave me a bunch of tomatoes and one was already half rotten. And our peach tree dumped a load of fruit that managed to sit on the ground for a few days, and that did not do a lot to improve them. So I spent the afternoon cooking.

Tomatoes

I started with the tomatoes. I’ve been looking forward to this season so that I could continue what has been a longtime obsession with me: the perfect cream of tomato soup. As anyone who has tried to do it knows: tomatoes and cream do not like each other. And in truth, I’ve never been fully happy with any of my many attempts. Today was no different, but I think it turned out pretty well.

Most recipes call for canned tomatoes, and this does make it a lot easier. You really need to cook the hell out of fresh tomatoes. On the other hand, fresh tomatoes provide a much better flavor. After all, if all you want is vaguely tomatoey soup, you can just make Campbell’s with milk. At this point, I don’t use any particular recipe. The basics are that you create a roux: butter and flour; then you add milk. Cook is on the lowest possible setting until it thickens. Meanwhile, chop the tomatoes up and cook them with onions. Season with salt and pepper. Normally, I use rosemary, but I didn’t feel like it today. It is often a pain to work with and I don’t have a mortar and pestle right now. Finally, you use the food processor on the tomato mixture and slowly blend it with the soup base.

I wasn’t too happy with the taste when I was all done. So I added a bit more salt and pepper. And then I added half a teaspoon of garlic. That did the trick. It was very tasty.

Mushrooms

Next up was the mushrooms. This one was easy. I always make the recipe in The Moosewood Cookbook. I have been doing that for more than 20 years. But just now, I checked online and this recipe (without referencing) was on All Recipes. Interestingly, it makes the exact two substitutions that I do. Moosewood calls for Hungarian Paprika and I just use regular. And Moosewood calls for tamari and I just use soy sauce. But as you will see if you click on those last two links, maybe I should go back to the original recipe.

Regardless, it was (As usual!) fantastic. It is one of my very favorite foods!

Peaches

The peaches were a mess. I ended up throwing out roughly half of them surgically. But because they were so ripe, I knew the pie would likely turn out well. First, however, I had to make the bottom pie crust. I recently discovered a great and extremely easy pie crust recipe. (I’ve been making chicken pies recently.) This is an “in pie pan” recipe. Dump in 1.5 cups of flour, 1 tablespoon of sugar, 1 teaspoon of salt, a half cup of vegetable oil, and an eighth cup of milk. Blend it together with a fork. Then just press it out to fill out the pie pan. I always cook my bottom crusts for about 10 minutes at 400 degrees so they don’t get soggy.

The filling is similarly easy. I used 5 cups of half inch square pieces of peach. Add to that 1.5 cups of sugar (because I have a major sweet tooth, you can get away with a lot less), half cup of flour, half teaspoon of cinnamon. Mix it all up and dump into your pie pan.

After that, you make a top crust the same way, but press it onto wax paper. Then put it on top of the pie, peal the wax paper away, and seal the edges of the pie. Poke holes in the top. Sugar it is you please. Cook at 425 for about 40 minutes and it should be delicious.

Of course, in the middle of all that, I also managed to write two articles for this blog. Such is the commitment I have to all of you!

On this day in 1792, one of the greatest English language poets Percy Bysshe Shelley was born. And he did right by the Romantic ideal by dying young. I rather like his poetry, but it exhibits a worldview that is now little more than a joke we associate with adolescent angst. All that really means is that Shelley and the other Romantic poets were too successful at their task. Regardless, like most people today, I would rather have his wife’s one great creation than all of his.

The great Irish mathematician William Rowan Hamilton was born in 1805. He’s the guy who reformulated Newtonian mechanics into the much more beautiful (and powerful, not that it matters) Hamiltonian mechanics. Fashion designer Louis Vuitton was born in 1821. I don’t have any thoughts about him one way or another. But it amazes me that the company he started sells some of the ugliest bags for the cost of my rent. What’s with that? Essayist Walter Pater was born in 1839. I never knew this was her whole name, but Queen Elizabeth The Queen Mother was born in 1900. She lived to be 101, so I figure her daughter will be kicking around for a while longer.

Another great mathematician, American this time, Saunders Mac Lane was born in 1909. He co-founded category theory, something that is very interesting, sounds powerful, and makes very little sense to me. Modern classical composer William Schuman was born in 1910. I very much like him. But his most admired piece—Violin Concerto—is still quite challenging. Give it a try, but if you don’t like it, check out one of his symphonies, which are more accessible:

One of the founding members of Abstract Expressionism, Hedda Sterne was born in 1910 (and only died two years ago). I’m not terribly fond of that art movement, but it is not all equal and Sterne produced some nice work. The painting at the left is a self-portrait (click on it for a larger image or check out this other great self-portrait), and is not Abstract Expressionism, of course. But I wish she had done more stuff like it. It is still quite modern but pulls together a lot of different styles—especially (to my eye) neoclassical and surreal.

And journalist Helen Thomas was born in 1920 and died only just the other day. I always felt she got a bad wrap about her comments about Israelis getting out of the occupied land. I believe what she was getting at (and had she not already been in her 90s, she might have been able to phrase it better) was that the Israeli government actively pushes these illegal settlements. What’s more, my understanding is that it is especially recent refugees who are so encouraged. That isn’t an anti-Israeli (much less anti-Jewish) thought. To me, the mess in Palestine is made ever so much worse because of these illegal settlements and makes a final resolution much harder. And that ultimately makes things worse for the Israelis. Anyway, I think that was what Thomas was getting at. Regardless, we should remember her for all the good work she did when the Washington press corps was something other than a bunch of sycophants.

Comedian Richard Belzer is 69 today. Actor Billy Bob Thornton is 58. And what’s his name is 52.

The day, however, belongs to one of the icons of Jazz, Louis Armstrong was was born on this day in 1901. Today, he is most remembered as a singer, especially of the song “What a Wonderful World.” Too often lost is what an exceptional trumpet player he was. And he was quite an innovator in terms of improvisation. It is not generally understood just how little improvisation went on in that early New Orleans jazz. Armstrong really showed the way forward. Here he is in Europe in 1933. He sings at the beginning, but you get to hear some great playing in the second half:

Happy birthday Louis Armstrong!

There is a fundamental problem in the United States. I think it comes from the fact that we have been such a rich country for so long. When you are rich, you are afford to be delusional. But the poor have to face facts. And as the vast majority of Americans get poorer and poorer, we are forced to see that our leaders (the power elite) aren’t making much sense and are thus making our lives worse.

I have a friend who is currently facing a drunk driving charge (although he wasn’t driving, nor had been driving—not that it much matters in modern day America). His lawyer recommended that he start going to Alcoholics Anonymous (AA) meetings everyday and collecting signatures. It is said that this will impress the judge. And doubtless it is true. All over the country, judges sentence drug addicts to attend various kinds of twelve-step programs like AA. This is sad and strange. Rather than being illegal, such sentences are now de rigueur. They are, after all, “spiritual” programs, based on 19th century evangelical programs of spiritual redemption. But such programs might be acceptable if they worked. But, of course, they don’t. The little study that has been done on such programs has found that they are no better at keeping people sober than no program at all. What’s more, when people in AA relapse, the length of those relapses are much longer. (See, for example, Alcoholics Anonymous: Cult or Cure?)

This isn’t intended as a criticism of the twelve-step community. If the program works for any given person, it works for that person and that’s great. But public policy should be based on what works in general and so these programs should not be forced on unlucky people who find themselves in the criminal justice system. I’m sure future generations will look back on this practice with much confusion. It will be viewed the way we now view doctors of old who bleed patients to death in attempts to cure them. The point is that our society still practices a lot of hocus pocus even as we pat ourselves on the back for our enlightened attitudes. (That’s especially true with drugs where it isn’t at all clear that “treatment” is better than jail.)

The problem is much bigger than the criminal justice system. And another big example made news this week: healthcare. I’ve had many conversations with conservatives where they say that we ought to fix our broken healthcare insurance system with a single payer. This seems to be more common now that one of the big talking points against Obamacare is that it is complicated. I don’t mean to suggest that these conservatives would not pivot immediately if a single payer system were on offer. (Not at first, perhaps, but as soon as Fox News was done with them.)

On Wednesday, Physicians for a National Health Program issued a press release, ‘Medicare for All’ Would Cover Everyone, Save Billions in First Year: New Study. The new study is by University of Massachusetts, Amherst economics professor Gerald Friedman. And his results are so shocking that I’m skeptical. He claims that we would save $476 billion per year from getting rid of the inefficient private insurance system that spends roughly 20% of its income per year trying to refuse care. And it would save another $116 billion per year by driving down the costs of drugs. That’s over a half trillion dollars per year!

One thing that there is no doubt about: a single payer health insurance system would save the country lots of money. Yet when it came time in 1993 and 2009 for the liberals to discuss healthcare reform, a single payer system was effectively off the table. It was largely an issue with the mainstream press: everyone just knew that single payer was not a serious plan, even if it worked great in a number of other advanced countries. (Hell, even the United Kingdom’s government-run health system works better than ours!) And why is it that we can’t talk about single payer? It certainly has nothing to do with the merits. It is just that we here in America don’t do things that way.

And that brings us to forcing drug addicts into useless (Or even harmful!) programs. We don’t care about results. Here’s another example: after 9/11 the government made all kinds of changes to airline traffic. I don’t believe one made us any safer, but they did make travel much more difficult. We could have made changes that would have been helpful, but we chose to make changes that were ostentatious and useless. Because that’s what America is all about: we want to look like we are doing something. It’s all about optics. It’s like the Billy Crystal character Fernando would say, “It is better to look good than to feel good.” Except in the United States, it is the power elite who look “good” and the uninsured who don’t feel good. We don’t look mahvelous.

H/T: Crooks & Liars

Update (5 August 2013 7:51 am)

I asked Dean Baker if the savings Gerald Friedman calculated were about right. He said, “If you got costs down near Canada’s, it would actually be more.”

Janelle Jones and John Schmitt of the Center for Economic and Policy Research have written a number of papers recently on how African Americans are doing in the modern American economy. I was expecting bad news, but it is even worse than I had thought. The main report (in PDF form) is Has Education Paid Off for Black Workers? I recommend at least reading the executive summary, but I’ll give you an idea of what we’re talking about here.

As a group, African Americans have improved themselves in a big way. Between 1979 and 2011, the number of black men with a high school degree or less fell dramatically from 72% to 43%. (In 1979, the high school dropout rate was 1-3; now it is 1-20.) Similarly, the number of black men with a college degree soared from 8% to over 23%. So much for the Bill O’Reilly line about the disintegration of African American subculture. (It seems what has disintegrated is the ability of conservative commentators to keep up to date with the facts.) But what do these black men have to show for all their hard work? Less than nothing.

No group of black college educated men was more likely to have good jobs in 2011 than it was in 1979. A “good job” is one that pays at least $19 per hour and offers medical and retirement plans. College educated black men younger than 35 have seen their chances of a good job reduced from 19.7% to 13.4%. Similarly, those between the ages of 35 and 54 have seen their chances reduced from 33.3% to 27.2%. And those over 55 have gone from 29.9% to 27.1%. The same dynamic is at work for black women, but their educational achievement has been greater and their job advancement less bad. However, black women are still far less likely to have a good job than than black men.

As Janelle Jones puts it, “The lack of growth in good jobs answers the main question of the report, has education paid off for black workers as a group? Short Answer: it has not.” In an interview on Bloomberg TV she noted that in this same time, GDP per person has increased 70%. And that gets to the heart of what is going on here.

During this period—basically from the Reagan Revolution onward—economic growth has not been shared with the workforce. There are various historical and sociological forces[1] that placed African Americans behind at the start. So they end up seeing even fewer fruits of productivity gains than whites, who themselves are being left behind.

As surprising as the results of this work were, I was stunned by one thing: according to Jones & Schmitt’s model, unionization is more important than education in providing better jobs for African American workers. Although looking at it now, it seems obvious. As more and more people become better educated, their individual value in the labor market goes down. So the David Brookses and George Willses of the world are just spouting happy talk that favors the rich. The only way to make improvements for workers is for them to have something approaching equal power to the capital owners. And the only way I know to do that is to organize.

Here is Janelle Jones on Bloomberg TV:

[1] By “sociological forces” I am not pitching the tired canard of black cultural dysfunction. What I mean is the status of blacks as outsiders in American culture.

[One of the primary examples used in this article (quoted in our usual box) has been updated. One of the winners, Wallace Coulter, declined the award because the Foundation could not document that the work was done with government money. Having worked on numerous government contracts, I don’t think this matters in the least. Wallace Coulter’s career was subsidized by government contracts. The Foundation is claiming that they can’t say if he was working on that particular bit of research under a government contract. See the Update below if you want to look into this issue more. -FM]

Ben Florsheim wrote a really good article over at Washington Monthly last week, Against the “Golden Fleece” Award. For those of you who are not familiar with this award, it was created by Wisconsin Democratic Senator William Proxmire. He was something of a star among liberals. Not only did he have the right positions on pretty much all policy questions, he did not take money from Political Action Committees. Of course, it was the case that he was dearly loved in Wisconsin and didn’t need that money. But still: Proxmire was a good guy.

The one bad thing about him—and it is really bad—is his starting of the Golden Fleece Awards. And now, they are about the only thing people remember about him. Fully half of the Wikipedia page section on his legislative career is dedicated to the awards. And that is in a page that makes no mention of his refusal to take PAC money. The Golden Fleece Awards were given out for wasteful government spending. Unfortunately, the awards often came down to simply not understanding the need for basic scientific research. Everyone can have a good snicker about funding research on Monarch butterfly sex. But when species decline starts to affect agricultural yields, it stops being so funny.

In a sense, the award was the beginning of the modern wave of anti-intellectualism in American politics. Now it is common for (almost always) conservatives to claim that this or that research is a joke based only on its title. As Florsheim noted about the beginning of the award, “The NSF had spent $84,000 in taxpayer dollars to fund a study on the origins of love. Proxmire didn’t think that was a good use of $84,000. And thus, a new generation of headline-grabbing anti-intellectualism was ushered into an institution where such posturing had a storied legacy on which to build: Congress.”

As you can see in that example, there are big problems. First, $84,000 isn’t a lot of money. It is one thing to point out a useless weapons system that the military doesn’t even want. And Proxmire certainly did that. But more often, the target was small research contracts that, even if they were of dubious value (and that was rarely the case), didn’t save any real money. But even more important, it just added fuel to the widely held belief that the government wastes all kinds of money when that just isn’t the case.

Last year, a group of like minded people decided to push back on this nonsense by creating the Golden Goose Award. It is meant “to celebrate scientists whose federally funded research seemed odd or obscure but turned out to have a significant, positive impact on society.” Florsheim explains this years winners:

There is nothing more annoying to me (and probably most people) than people showing total ignorance while feeling superior. The very idea of the Golden Fleece Award is bad because it flatters people’s prejudices. There is certainly government waste, but the approach to it should be argument, not shame. All shame does is lower confidence in the government. The Golden Goose Award is a needed palliative, but I suspect it won’t be that effective. “Outrage: Government Funds Gila Monster Venom Study” sells newspapers. “Scientist Finds Treatment for Diabetes” doesn’t. But we’ve got to try.

Update (2 December 2013 5:56 pm)

A commenter noted that the Wallace Coulter Foundation declined the Golden Goose Award. He seemed to think this undercut the entire article, but to me it matters not at all. The Foundation declined the award, “While there can be no doubt as to the extraordinary achievements of Mr. Coulter, who discovered the Coulter Principle and invented the Coulter Counter, the Foundation determined that it could not be certain that federal funding was involved in the discovery of the Coulter Principle, which was the basis for the award.” Does this change the article. I will leave that to you to decide.