This post is a follow up of my previous post on the subject, with some additional thoughts and information.

·         On December 14,2009, the Wall Street Journal published a report  titled "Fixing Global Finance". The report is the result of a gathering of 80 top financiers. This report seems to me another attempt to study the problem, find the root causes, and recommend fixes as appropriate. I highly recommend this report.

·         The President, as usual, blamed the "greedy bankers" for the problems in the financial system.  You may be in agreement with him, and to some extent you may be partially correct. However, let me direct you to some findings that I just briefly pointed out in my last post;  I will include the appropriate text here for your connivance from the journal Critical Review.

Was It the Bankers’ Greed, Then, After All?

It might seem that we have now laid the financial crisis at the feet of

government, not “capitalism”: Without the Basel rules, commercial

banks would not have loaded up on subprime securities. And had they

not done so, the dawning realization that these securities might be

“toxic,” despite their ratings, would not have caused lending among

the banks to freeze. No Basel rules, no overinvestment in toxic securities

by the banks; no overinvestment in toxic securities by the banks, no

financial crisis.

But if we look at the same process from a different angle, the bankers

concentrated risk in their own portfolios so that they could make more

money. So it might seem that, after all, the most popular explanation of

the crisis is true, although for a reason most people have never heard of:

“Greedy bankers” were indeed at fault, because they took advantage of

the Basel rules to “leverage up.” They bought (risky) subprime securities

to reduce the amount of capital they were required to hold against the

risk (ironically) of lending—so that they could make more (risky) loans,

hence more profits. Nobody forced them to do that. It was the bankers’

avarice, then, that caused the crisis. And is not avarice, a k a “self-interest,”

the engine that is supposed to make capitalism produce wonders?

The short answer is no. Avarice did not cause the crisis. And avarice

is not what makes capitalism work. The latter point, and thus a resolution

of the relationship between “capitalism” and the crisis, requires its own

exposition (Part III). For now, let us consider whether the story of the

Basel rules is a tale of “greed.”

The Basel rules were indeed designed to be buffers against excessive

risk-taking by commercial banks. The 8-percent Basel capital minimum,

multiplied by the 50-percent risk weight assigned to mortgage loans,

amounts to a leverage ceiling of 96 percent on those loans. By exchanging

mortgages for mortgage-backed securities, a bank could increase its leverage

even higher. This may seem like excessive risk-taking. But truly

“excessive” risk-taking causes a bank to lose money. A greedy banker

may want to make more money, but he also doesn’t want to lose it. The

miser who hoards his pennies is as greedy as someone who borrows as

much as possible in order to gamble with it: With leverage comes not

only the promise of large gains, but the risk of great losses. Avarice, therefore,

can lead to leveraging down as much as it leads to leveraging up: If

greed is a banker’s motive, raising his capital ratio (to reduce his leverage)

makes as much sense as lowering it.

Thus, when we see bankers leveraging up, avarice is not the issue.

Confidence is.

A bank that leverages up is relatively confident in the accuracy of its

judgments about how to make money—and relatively confident in

its judgments about how to avoid losing it. If its judgments are right, its

confidence will be rewarded with profits. If they are wrong, then—in

hindsight—its confidence will have been imprudent. So the question, in

hindsight, is not why so many banks acted so greedily, but why they

acted so imprudently.

Still, even if the problem with financial capitalism is better described

as imprudence than greed, it would be quite a problem. So the question

is whether taking advantage of the Basel rules by leveraging up indicates

that bankers were imprudent. That, in turn, depends on how one defines

imprudence.

If imprudence merely means miscalculating risk—i.e., making a

mistake—then the answer is yes, almost by tautology. With the clarity of

hindsight (and assuming, as we have been doing, that the ratings of the

double- and triple-A tranches were inaccurate), then the bankers’ actions

were manifestly imprudent.

On the other hand, if imprudence means a reckless disregard for risk,

the bankers’ actions indicate quite the opposite.

If the only thing bankers had cared about was making money, heedless

of the risks involved, then they could have exclusively bought double-A

subprime securities, which conferred exactly the same capital advantage

as triple-A securities—but which produced a higher yield. But Acharya and

Richardson’s Table 1 shows that in fact, only 19 percent of the rated

securities held by banks were rated AA or lower. Eighty-one percent of

the time, bankers chose lower-yielding triple-A securities. The bankers’

preference for AAA over AA securities demonstrates that they were not

blind to risk.12

It also demonstrates that they, like everybody else, believed in the

accuracy of the triple-A ratings, since they were trading the greater

returns on double-A tranches for the supposed safety of triple-As. As

Mark Zandi (2009, 116) writes of subprime securities,

Banks themselves were the first in line, picking up most of the senior-rated

segments. Returns on these were low, but greater than the banks were

paying to their own depositors.

This behavior is nothing if not prudent.

Moreover, most banks went the extra mile and bought additional

insurance on these securities, both from “monoline” insurers, which

provided 100-percent loss protection (Gorton 2008, 38n42) on some

portion (generally 20 percent) of the securities; and in the form of creditdefault

swaps—as Wallison explains in “Credit-Default Swaps Are Not

to Blame.”13 The evidence, then, suggests that bankers were not imprudent

in the sense of ignoring risks that they knew about. Rather, they

were ignorant of the fact that triple-A rated securities might be much

riskier than advertised.

Take the head of the two Bear Stearns subprime hedge funds,

Ralph Cioffi. It was his pitch to investors that consisted of endlessly

repeating the fact that the funds’ assets had triple- or double-A ratings.

Not only did his clients believe that these assets were safe; so did he.

Thus, he was willing to risk a jail term by lying to his clients from

December 2006 to February 2007, when news of subprime defaults was

spreading and the credit-default swap insurance price of subprime CDOs

was rising (Cohan 2009a, 311-12). To reassure his clients, Cioffi reported

that he was selling subprime CDOs during this period when he was

actually buying them. He must have been sure that there would be no

investigation, hence no jail sentence, if doubling down on subprimes

turned out well for his investors—so clearly he must have believed that

in buying them, he was not courting disaster.

Cioffi’s partner, Matthew Tannin, seems to have held the same set of

beliefs. Tannin followed Alan Greenspan (Zandi 2009, 72-73) and Ben

Bernanke (Posner 2009, 90) in thinking that there was no nationwide

housing bubble, as opposed to local bubbles in a few cities (Cohan 2009a,

305). E-mails to Cioffi unearthed by the F.B.I. show that Tannin thought

buying subprimes was a good idea as late as February 28, 2007 (ibid., 322).

Both Tannin and Cioffi had millions of dollars invested in the

subprime hedge funds they ran, and Cioffi moved $2 million of his $6

million investment out of these funds only on March 23, 2007 (Cohan

2009a, 325). As of March 28, however, Tannin was still in: “‘I simply do

not believe anyone who shits all over the ratings agencies,’ he wrote. ‘I’ve

seen it all before. Smart people being too smug’” (ibid., 326). It was not

until April 22, 2007—two months before the funds collapsed—that

Tannin began to have doubts. A new internal analysis of subprime CDOs

suggested to him that “the subprime market looks pretty damn ugly. If

we believe the [new CDO report] is ANYWHERE CLOSE to accurate, I

think we should close the funds now” (quoted, Cohan 2009a, 328). This

was toward the end of a tortured letter that Tannin routed to Cioffi

through their wives’ personal e-mail accounts (ibid., 327). The message

began by reflecting on how much Tannin loved his work with Cioffi,

and how “he had no doubt ‘I’ve done the best possible job that I could

have done. Mistakes, yep, I’ve made them,’” he admitted, but “‘all one

can do is their best—and I have done this.’”

These are not the words, nor were Tannin and Cioffi’s actions the

behavior, of people who had deliberately taken what they knew to be

excessive risks. If Tannin and Cioffi were guilty of anything, it was the

mistake of believing the triple-A ratings.

The Executive-Compensation Theory

Eminent economists have been joined by the president of the United

States, however, in claiming that the problem was precisely that bankers

knowingly took excessive risks. The reason they have offered is that the

compensation structure of the banks gave bankers an incentive to disregard

risk. Executives and, in many cases, lower-level employees were

rewarded with bonuses for profits; but if profits turned to losses and the

executives were fired, they often had “golden parachutes” to protect

them from financial damage. Meanwhile, lower-level employees suffered

no diminution in base pay even if they failed to get a bonus because of

losses (Posner 2009, 93–100).

This theory has the advantage of relying on the basic tool of contemporary

economics: incentives. But it has the drawback of economists’

insensitivity to other factors—such as ignorance—which is so trenchantly

pointed out in Colander et al.’s critique of contemporary economics.

There is no question that incentives have real effects—when

economic agents are knowledgeable about how to make more money, for

example, or how to avoid losing it. But while compensation may skew

economic actors’ incentives, the question is whether particular economic

actors—real bankers at actual banks—were knowledgeable about the risk

of losing money on triple-A rated securities, and thus were imprudent in

buying them. That is an empirical question that can be answered only

with evidence; it cannot be decided a priori. And thus far, it seems that

the theory has no evidence behind it, and a great deal against it.

We do not have any reason to think, for example, that banks whose

employees got bigger bonuses for taking more risks actually invested

more in subprime securities—or more in double-A than in triple-A

subprime securities. Nor has anyone named an actual executive (apart

from Countrywide’s Angelo Mozillo) who is supposed to have known

that his bank was taking on undue risk. On the other hand, we do know

that the bankers in question often took tremendous amounts of compensation

in the form of their banks’ stock, which became virtually worthless

as a result of their subprime investments. This was true of Bear Stearns,

whose executives collectively lost billions of dollars; of Lehman Brothers,

where the CEO, Richard Fuld, single-handedly lost $1 billion; and of

Citigroup, where Sanford Weill lost half that amount (Cohen 2009).

The available evidence, then, suggests that the alleged miscreants were

not setting aside knowledge of risk in pursuit of higher paychecks. “We

were just told by our risk people that these instruments are triple-A, like

Treasury bonds,” said Peter Kurer, the former chairman of the huge

Swiss bank UBS (quoted, Tett 2009a, 139). The UBS report to its shareholders

and the Swiss government on its performance in the crisis bears

Kurer out.14 The risk-management process may (in retrospect) have been

flawed, but the results it produced were reassuring, and there is no reason

to think that Kurer was less than reassured. Nor is there evidence that the

risk managers who generated these reports deliberately underplayed the

risks.

Even more telling is what we know about Cioffi and Tannin of Bear

Stearns, who were just about the two best-placed bank executives in the

world to know that there was excessive risk in triple-A tranches of

subprime securities—if any bank executives knew that. Bear Stearns led

all the investment banks in securitizing subprime loans, and Tannin had

spent seven years intimately involved in the securitization process itself

before he joined Cioffi in buying mortgage-backed securities for the Bear

Stearns hedge funds (Cohan 2009a, 283). By contrast, the commercial-bank

employees who bought these securities typically would not have been in

a position to know anything about them except that they were rated

AAA. If Cioffi and Tannin were ignorant of the “true” risks, as the

evidence suggests, then we have every reason to think that commercial

bankers were just as ignorant of them.

This applies doubly to the executives at the top of the corporate hierarchies.

When the market for the securities that Cioffi and Tannin were

selling (and buying) dried up and Bear Stearns had to close the two hedge

funds, Paul Friedman, the CEO of the firm’s fixed-income division,

reports how bewildered everyone was: “At that point we still believed that

an AAA rating meant an AAA rating, and we all believed that these things

were reasonably well structured” (quoted, Cohan 2009a, 365)15—just as

did the infuriated executives at BlackRock, Fortis, Vanguard, and Pimco.

The papers by Bhidé and Colander et al. suggest that economists are

poorly equipped to recognize ignorance when it is staring them in the

face—because most economic models assume that economic actors

(“rational representative agents”) are, in effect, omniscient.16 Notably,

this is the default theory in popular politics and in much of political

science, too: In the populist theory, major problems aren’t caused by

human error; instead, some evil person or cabal must be at fault—“special

interests,” lobbyists, or, indeed, greedy bankers. Mistakes simply don’t fit

into standard economic and political models, because standard economic

and political models take ignorance out of the human equation.

Instead of mistakes—caused by ignorance—the standard models focus

on motives, i.e., “incentives.” The effect is to model economic and political

agents as if they automatically get what they want (unless they are

blocked by agents with contrary desires, as in game theory), which sidesteps

the question that actual human beings constantly confront: How do

I get what I want? Desires are not self-actualizing, and to assume that they

are might be called magical thinking to emphasize how unscientific it is.

But let us instead call the assumption that an agent accomplishes whatever

he or she intends (unless blocked by another agent) “the intentions

heuristic.” This nomenclature should remind us of how fundamentally

destructive of good social science the heuristic can be, since good social

science should, above all, identify unintended consequences.

If, as I have been assuming (along with all of our authors), Cioffi and

Tannin were taking bigger risks than they thought—a question that will

be settled only if triple-A tranches end up paying out significantly less

than promised to their investors (which may not be the case)17—then,

ex post facto, we can pass the judgment that their confidence in the value

of mortgage-backed securities was “overconfidence.” However, this is

not evidence that they were imprudent in a meaningful (non-tautological)

sense. They were not being particularly greedy or hubristic. They,

like the other investors, and the rating agencies, were simply

mistaken—or so it seems, with the luxury of hindsight. And the reason,

apparently, is that they were ignorant of the true risk of the securities

they bought.

·         Has the congress or administration taken into account the issues and problems raised by either of these studies? I would hope so, but have serious doubts because of all of the scapegoating and finger pointing.  I have e-mailed Senator Joe Lieberman on two occasions, and he has responded both times to my specific concerns. I will e-mail him again concerning these two studies, and will let you know how he responds. By the way, I have also sent the same e-mails to Senators Dodd, Feinstein and Boxer, with no responses.

My conclusion is that we have a multifaceted problem that can't be solved in a political manner, but will take the honest efforts of bankers, financiers, politicos, news media and others. Our job  as voting citizens  is to press for the honesty we all deserve.

Regards,

don

In the President's speech on his "Jobs Program", he takes the now usual swipe at the GOP, and by implication, the  Bush administration. The Administration, by way of the "Jobs program", more than a year after  the big financial collapse of 2008, is just now getting around to figuring out how to help the small business community by way of tax incentives. But my  intent here is not to take him to task for that short coming,  but rather, the "Blame Bush" tirades (as well as blaming the greedy bankers, insurance companies, auto makers, Fed, and on and on and on).  

http://www.foxnews.com/politics/2009/12/08/obama-takes-joblessness/

When the housing and financial crisis hit last year, my initial reaction was that we should treat this as a breakdown of a complex system, and approach it from somewhat of an engineering troubleshooting (my background) perspective. We should not cast about for the usual cast of characters (scapegoats), but rather seek the root causes of the crisis, and then go about fixing them.

I think I may have found such an analysis, in the journal "Critical Review". The current issue of this  journal has the title "Causes of the Crisis", and contains 12 essays on the subject. It's hard for me to put a label on this organization, left/right, but the Board of Advisors is populated by a large number of academic types from universities in the US and the UK. The contributors to the issue also seem to be of the same  background, but two of them are from Poland.  You can link to the Introductory essay INTRODUCTION: A CRISIS OF POLITICS, NOT ECONOMICS: COMPLEXITY, IGNORANCE, AND POLICY FAILURE below; thus far it is the only one I have read.

http://www.criticalreview.com/crf/current_issue.html

I'll try to summarize what I think I have learned from this as follows, but suggest you read for yourself.:

The causes of the crisis are many, and for the most part regulatory problems.

·         The Community Reinvestment Act  (CRA), passed by Congress in 1977 (Note: not during the Bush years you may notice, nor during the tenure of Allen Greenspan). The intent of CRA was to allow low income families to own houses, even though the attendant risk was high in these cases. One of the things CRA did in the mid to late 90s, was to legislate that mortgage lending institutions (banks) allocate 30% of their lending to  the poor; this was bumped to 50% in 2000.

·         Fannie Mae and Freddie Mac, created by Congress is 1968 (see note above).

·         Quasi -Governmental rating  Agencies: Moody's, Standard and Poors, and Fitch. In 1975, the S.E.C. ensured that these three companies were the only ones legally permitted to rate securities such as the Mortgage Backed Securities (MBS) created during the housing bubble.   Further, in 1936, regulation re these "agencies" effectively guaranteed income from their ratings. Their ratings were considered to be somewhat of a gold standard, and the fact is (as was exposed by the 2008 melt down) that the MBSs were grossly flawed. (again, see Note above).

·         The Fed. The very low interest rates for such a long time during the housing bubble contributed with all of the other factors (perhaps now, Bush and Greenspan have some culpability).

·         The Basel Accord. The Basel Accord set the requirements of banks to have a certain amount of Capital in order to protect against defaulted loans. You'll have to read the essay yourself to get an appreciation of what happened with the accord and the Mortgage Crisis.

·         Ignorance. Because of the complexity and interrelationship of the maze of regulations, many of the key players (bankers included) were ignorant of what was actually building, in particular, the securities ratings.

·         Others I may have missed in the essay.  

·         Greedy bankers? The analysis may surprise you, so be sure to read that portion.

Now let me get back to the finger pointing.

Now that it appears that someone is tackling the problem, and finding the root causes, the next question I have, is "What the hell is the Administration and Congress doing to correct these problems?". The answer should be obvious; Blame the other guy, spend lots of money and dig the debt hole deeper, create a stimulus package or two or three, spend most of the congressional session on a "Health Care Reform?" package that will contribute to the bankruptcy of this nation, and leave the mess to future generations. Have you noticed anyone in Congress or the Administration talking about or holding hearings on the issues that have been uncovered by the essays referred to above? I haven't.   

Again I say; get informed, get active in your local tea parties and town hall meetings, and do some serious voting next time around.

Regards,

Don

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He spent hour after hour pitching quarters at the saucers in hopes of winning the grand prize, but all he managed to do was make a lot of noise and spend a lot of quarters.

Who knows why, but the proprietors of the carnival decided that his good intentions (and the quarters) were the finest and most noble thing seen in many months and years of carnival barking.

The young man went home happy, and placed the Noisy, Clattering, Quarter Toss Carnival Prize proudly (but humbly) in the most prominent place in the village, and continued on with his quest to "slow the rise of the oceans, and heal the planet".

I often enjoy reading of the accomplishments of great scientists and researchers. The recognition they get via the Nobel Prize is a good thing, because so often the accomplishments are truly worthy of praise.  But the "Nobel Peace Prize"? Surly this latest folly of the Norwegian committee is completely absurd and laughable.  If you remember back a few years, this is the committee that awarded the prize to Yasser Arafat.  Arafat's core defining characteristic was his absolute hatred for Jews, and his core defining accomplishments were to continue his uncle's plans and actions to murder the Jews, all of the Jews. In case you don't know what I am talking about, Arafat's uncle was the Grand Mufti of Jerusalem, and spent a considerable amount of time in Berlin during the late 30's and early 40's collaborating with the Nazi and planning the extermination of the Jews. Benjamin Netanyahu's "have you no shame?" speech before the UN certainly applies to the Nobel Peace Prize  committee in picking characters such as Arafat. I know I am getting dangerously close to a line I don't want to cross, and I am in no way associating President Obama with the Nazi's. Rather, I am trying to point out the mindset of the Nobel committee.

Looking at the committee from a different perspective, look at who they could have selected in the past, but declined to pick; President Ronald  Reagan, Prime Minister Margaret Thatcher or Pope John Paul II for their role in the defeat of the Soviet Union, the end of the Cold War, and the liberation of many millions. Or, President George H.W. Bush for his liberation of Kuwait in 1991. Or President George W. Bush for his liberation of millions  in Iraq and Afghanistan with the dismantling of Al-Qaida, and the establishment of the only democratically elected republic in the middle east.

One could hope that President Obama would refuse the prize on the grounds of accomplishment. The Nobel should be based on the basis of solid past tense accomplishments furthering the cause of a more peaceful world. Mr. Obama does not yet have that record. Secondly, one would hope he would refuse the prize because the prize itself is not worthy to sit on the mantle of the leader of the free world.

Richard Morris (Catastrophe) at the Yale Barnes & Nobel Bookstore. Mr. Morris is a political commentator and author who served as a key advisor to President Clinton. Since then, Mr. Morris has been very active in conservative circles, has authored bestselling books on political issues, and is a frequent contributor to the Fox News Network. Mr. Morris is one of those folks whose commentary and insight I value. You may not agree with him, and he is not always right, but to ignore his knowledge and insight is to your own detriment, because so often he is on the mark. At Yale, Mr. Morris addressed the Yale student body (actually there were only about 20 of us) and took questions and comments from the audience. I had the opportunity to meet him personally, and talked briefly to him. I was especially impressed by a small group of Yale students who invited Mr. Morris to moderate an on campus debate, and also do the book signing event.

Marc Wortman (The Bonfire; The Millionaire's Unit: The Aristocratic Flyboys who Fought the Great War and Invented American Airpower) and Carol Berkin (Civil War Wives: The Lives and Times of Angelina Grimke Weld, Varina Howell Davis, and Julia Dent Grant). at R.J. Julia bookstore in Madison CT. These two authors shared the stage, and their passion for their topics in a most interesting fashion. I have a personal interest in Mr. Wortman, as he is a neighbor and friend here in New Haven. I am currently reading the “Unit”, and find it incredibly fascinating. Mr. Wortman unveils Yale campus life in the pre World War I days in a very detailed and yet intimate fashion. The Yale football juggernaut of those early years was incredible, a three year winning streak of 37 games with 35 shutouts; and a scoring spread of 1,640 to 6. The Yale stadium is a short 10 minute walk from where we live, and holds 62,000+. At the time it was built in 1914, it was the largest outdoor sports stadium in the world since the Roman Empire. Saturday I attended my first game there. It cost me $4.00, but we lost to Lafayette.

Glen Beck (Arguing with Idiots: How to Stop Small Minds and Big Government) at the North Haven Barnes & Noble. This was an amazing event, with Mr. Beck himself being himself a minor part of my experience at the event (he was 90 minutes late at the end of an all day tour to 5 New England stores). The event was very well attended by at least 1,000 people. The signing line snaked though the store, out the door, and down the sidewalk for quite a ways. The store itself was crowded with folks like me who didn’t want to wait all night for a signed copy (we left our copies with the store and picked up signed copies the next day anyway). The crowd was much like myself, mid sixties or thereabouts, well behaved, and I think it would be fair to characterize them as “Tea Party” kinds of folks. I talked to many of them, and like myself, they expressed concern about the direction and future of the nation under the Obama administration. No one seemed to know when the scheduled riots started though; I guess since it was well past nap time for most of us, they must have been postponed.

Old folks weren’t the only ones in attendance however. There were several groups of young people that I talked to as well. One group of about 6 high school students was there with protest signs and received the award for unusual bravery. You see, they were protesting the event, and in particular Mr. Beck. They were civil and respectful in their protest, and the crowd largely ignored them. I talked with them for quite some time, to get a sense of where they were politically. One of the young boys carried a sign that read “Young people for Socialism”, and the general feeling among them was that Mr. Beck was spewing hatred and intolerance. They were also of the mind that the Constitution was outdated, and not of any value in dealing with the problems of the modern world. I didn’t attempt to argue with them, or try to change their minds, but rather encouraged them to study the founding of the nation, and the development of the Constitution, in particular the Federalist Papers by Hamilton, Madison and Jay. I also gave them a copy of Beck’s book “Common Sense”, which contains a copy of Thomas Paine’s Common Sense”. They thanked my, said they would keep an open mind, and read the book.

The other group of young folks was two young high school boys. They had just purchased “Idiots”, and so I asked them why they were attending such an event with such a controversial person such as Beck. They told me that they were basically of a conservative mind set, and had been following Beck since his days at CNN. They felt a resonance with what Beck has to say, and the questions he is asking of the powers to be. One of the boys has plans to enter politics in the future.

All in all, quite an exciting night. I am encouraged to see so many concerned citizens come out to such an event, especially on a rainy night in a part of the country that is known to be very liberal in its politics. Yes, they are “tea party” kinks of folks, just ordinary folks concerned about their nation and its future. They’re my kind of folks, and I’m proud to be part of them.

Best regards,

Don

In praise of the angry man

Don Johnson

September 18, 2009

Garison Keeler is a unique and talented American treasure, and it is a treat to listen to his Prairie Home Companion. He was on PBS recently, and I spent a delightful hour or two listening to his descriptions of American life. Much of what he said and did resonated with my own soul and life experience.

Using this as a springboard, I would like to take issue with Mr. Keeler on his assessment of what makes America great. This is not a huge left/right or theological issue, but rather one that I think Mr. Keeler could easily agree with.  At one point in his show he said something like the following (I’m paraphrasing here, so my apologies to Mr. Keeler). “… America is great because of good and kind people, … I do not believe angry people contribute to the greatness of my America…”. Now who could possible take issue with such a sentiment?

Again, let me point out that my issue with Mr. Keeler is not huge, but rather one of nuance. Rather than making it a “this or that”, or a “this and not that” assessment, my assement is “a lot of this, and, a lot of that”. Life is much more complicated than a series of “this or that”, as much as we would fool ourselves into believing (myself included). What makes America great is many good and kind people, and, many angry people as well.

Can a nation, any nation, be great only because of good and kind people? I think not. While good and kind people are indeed necessary, it is unlikely that a nation can even come into existence with only the good and kind. And if it does, the lifespan of such a nation would indeed be short.

Angry people are necessary for the creation and sustainment of a nation. But the kind of angry people I am talking about are of the righteously angry sort, they see a wrong and direct their anger to correcting that wrong.

America was founded by angry men, in particular the 56 men who signed the Declaration of Independence, and who stated in writing, “…we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.”. These angry men confronted a wrong, and did something about it; they created a new nation “conceived in liberty, and dedicated to the proposition that all men are created equal”.  Yes, you may recognize these as the words of another angry man, Abraham Lincoln. Because of his righteous anger, Lincoln saved the Union, and abolished the blight of slavery from the American fabric.

Further along in the American story, angry men confronted and defeated the tyrannies of Nazi Germany, imperial Japan, and the expanding and enslaving empire of the Soviet Union.  

Even though our Civil War abolished slavery from the American story, another angry American by the name of Dr. Martin Luther King confronted the evil of racial bigotry and brought this nation much closer to fulfilling his dream of an America “…where people are judged by the content of their character, and not the color of their skin…”.

Following September 11, 2001 yet another evil was confronted by another group of angry folks, and we are hopefully far along in the quest to throw that evil into the dustpan of history.

There are many other examples of righteous anger contributing to make America a great nation, and I believe, the greatest civilization that has ever existed on this earth.  Not the least of these examples has been the continued existence of a free press and the many angry journalists who have confront the evils and corruption they see in our nation, may they ever be free to do so.

Let me close with another angry man, a man not an American citizen, but one who has been greatly influenced by the greatness of America. On July 4, 2004, this man was honored at a ceremony in Philadelphia for being a true follower of Thomas Jefferson and a model for future Jeffersonian democrats. The man who that day was awarded the Philadelphia Liberty Medal is President Hamid Karzi of Afghanistan. You may be as shocked as I was when I first read this, but check it out for yourself, and read the words of this man.

"Where Liberty dies, evil grows. We Afghans have learned from our historical experiences that liberty does not come easily. We profoundly appreciate the value of liberty…for we have paid for it with our lives. And we will defend liberty with our lives."

The influence of righteously angry men spans centuries, cultures and religions to the good of all mankind, let us never forget that.

Coming to terms with "torture".

Like many Americans, I have been closely following the "torture" debate. There has been much angst and debate, and I have indeed been concerned. Has my government been engaging in the evil of torture? If so, then we have indeed slipped far down a slope that is filthy indeed.

I've heard a lot of the discussions and accusations, and have decided it's time for me to weigh in. I'll do this from several different angles, because for one thing, I don't think the debate is being framed correctly in any way shape or form. The left has pronounced President Bush as a torturer, no black and white here, the verdict is in, and he is guilty. The conservative has yet to mount a defense, except to claim somewhat meekly "we don't torture".

What is torture?

I wish first to come to a working definition of torture. I believe that certain things are black and white, "case closed". Such things as the laws of nature; you jump off a roof, and you fall to the ground, likely breaking a bone or two. Laws of economics; you spend more than you make, and you wind up broke. I believe the ten commandments are black and white, and you break them willfully at your own risk and peril.

I also believe some things have a degree of relativity about them, that certain things are comprised of a spectrum, not so easily qualified or quantified as black or white. The concept and definition of "torture", as it is being bantered around today is in this sort of spectral category.

Growing up in America, I learned about the torture regimes of history. The rack, impaling on stakes, quartering, breaking bones, disfiguring, pulling of fingernails and toenails, burial alive in ant hills, crucifixion, burning at the stake; typically resulting in extreme and prolonged pain followed by an agonizing death. We've all read about them, as well as the horrors of the Nazi and Soviet camps. These kinds of activities are easy to define as "torture", because indeed they are.

Then we come to such things as water-boarding and sleep deprivation, the so called "enhanced interrogation" methods. These actions don't rise to the same level as the others I've described, even though they are rough. There is no prolonged pain, disfigurement or death involved.

Thus, I have come to terms with the Bush "enhanced methods", and do not believe them to rise to a reasonable definition of torture. Further, I object to the perversion of words such as torture. When we give all manner of latitude in defining a word or action, the word itself looses meaning as a useful tool, and it can mean whatever we wish it to be. Words should have meaning.

Motivations.

Motivation is also important when trying to determining what is, and what isn't torture, and here I see several areas.

There is the basest of all motivations for torture; the perverted desire to inflict pain and suffering for the mere pleasure of doing so.

Another motive is control. Those seeking control of others often use torture as a means of keeping them in line with the agenda of the torturing regime. I place torture as punishment in this category.