FRONTLINE:

This is the story of the most important change in the relationship between government and private business in a generation.

In Breaking the Bank, FRONTLINE producer Michael Kirk draws on a rare combination of high-profile interviews with key players Ken Lewis and former Merrill Lynch CEO John Thain to reveal the story of two banks at the heart of the financial crisis, the rocky merger, and the government's new role in taking over -- some call it "nationalizing" -- the American banking system.

Breaking the Bank

Roger Ebert:

Bill O'Reilly insists he is dealing only with the truth. When his guests disagree with him, he shouts at them, calls them liars, talks over them, and behaves like a schoolyard bully.

He has been an influence on the most worrying trend in the field of news: The polarization of opinion, the elevation of emotional temperature, the predictability of two of the leading cable news channels.

O'Reilly represents a worrisome attention shift in the minds of Americans. More and more of us are not interested in substance.

People aren't in the habit of searching the dial.

P.J. O'Rourke:

I wonder, when was the last time a talk show changed a mind?

Have you read Infinite Jest?

The O'Reilly Procedure

Ed Felten et al:

If the next Presidential administration really wants to embrace the potential of Internet-enabled government transparency, it should follow a counter-intuitive but ultimately compelling strategy: reduce the federal role in presenting important government information to citizens. Today, government bodies consider their own websites to be a higher priority than technical infrastructures that open up their data for others to use. We argue that this understanding is a mistake. It would be preferable for government to understand providing reusable data, rather than providing websites, as the core of its online publishing responsibility.

Rather than struggling, as it currently does, to design sites that meet each end-user need, we argue that the executive branch should focus on creating a simple, reliable and publicly accessible infrastructure that exposes the underlying data. Private actors, either nonprofit or commercial, are better suited to deliver government information to citizens and can constantly create and reshape the tools individuals use to find and leverage public data. The best way to ensure that the government allows private parties to compete on equal terms in the provision of government data is to require that federal websites themselves use the same open systems for accessing the underlying data as they make available to the public at large.

Aaron Swartz:

I've spent the past year and change working on a site that publishes government information online. In doing that, I've learned a lot. But I've also become increasingly skeptical of the transparency project in general.

In short, the generous impulses behind transparency sites end up doing more harm than good.

Government Data and the Invisible Hand

Yaroslav Trofimov for WSJ:

Egypt's Muslim Brotherhood is on the defensive, its struggles reverberating throughout Islamist movements that the secretive organization has spawned world-wide.

The Brotherhood engaged in assassinations and bombings in the past, and one of its ideologues, Sayyid Qutb, developed a radical theology that still motivates jihadi groups such as al Qaeda. Since the 1970s, however, the Egyptian Brotherhood renounced violence and rejected Mr. Qutb's more fiery theories. It has focused instead on building an Islamic society from the bottom up, through proselytizing, social work and political activism.

In such an environment, the Brotherhood's strategy has long been to run heavily publicized parallel social services. But the Brotherhood's social-services pitch doesn't always match reality, in part because of the campaign against its financing. On a recent evening visit to the two Brotherhood clinics, no doctor or patients could be seen. The clinics themselves turned out to be tiny rooms tucked into corners of Brotherhood offices. Behind the flimsy curtains, they contained little more than a cupboard full of pills, rickety furniture and a blood-pressure gauge.

"In the beginning, the Brotherhood had a lot of popularity -- people thought they'd achieve something. But once they got into parliament, they've become just like everyone else."

Decius:

When you put God and the king in the same chair the result must be despotism.

Economist on Obama:

He has to start deciding whom to disappoint.

Muslim Brotherhood Falters as Egypt Outflanks Islamists

Cass Sunstein has a new book.

Why do people become extremists? What makes people become so dismissive of opposing views? Why is political and cultural polarization so pervasive in America? Why do groups of teenagers, investors, and corporations take unnecessary risks? What leads groups to engage in such destructive acts as terrorism and ethic cleansing?

In Going to Extremes, renowned legal scholar and best-selling author Cass Sunstein offers startling insights into why and when people gravitate toward extremism.

From the archive:

I wonder, when was the last time a talk show changed a mind?

Going to Extremes: How Like Minds Unite and Divide

David Ignatius:

President Obama promised CIA officers that they won't be prosecuted for carrying out lawful orders, but the people on the firing line don't believe him. They think the memos have opened a new season of investigation and retribution.

The lesson for younger officers is obvious: Keep your head down. Duck the assignments that carry political risk. Stay away from a counterterrorism program that has become a career hazard.

Would you care for a little hogwash with that?

The job of the interrogator is to safely help the terrorist do his duty to Allah, so he then feels liberated to speak freely.

This is the secret to the program's success.

Apparently waterboarding is about catharsis for the captive.

You may also be interested in George Friedman's perspective:

While Sept. 11 was frightening enough, there were ample fears that al Qaeda had secured a “suitcase bomb” and that a nuclear attack on a major U.S. city could come at any moment. For individuals, such an attack was simply another possibility. For the government, however, the problem was having scraps of intelligence indicating that al Qaeda might have a nuclear weapon, but not having any way of telling whether those scraps had any value.

This lack of intelligence led directly to the most extreme fears, which in turn led to extreme measures. A lack of knowledge forces people to think of worst-case scenarios.

Collecting intelligence rapidly became the highest national priority. Given the genuine and reasonable fears, no action in pursuit of intelligence was out of the question, so long as it promised quick answers. This led to the authorization of torture, among other things. Torture offered a rapid means to accumulate intelligence, or at least — given the time lag on other means — it was something that had to be tried.

See also, from 2006, also in WaPo:

It should surprise no one that Human Rights Watch can write a persuasive anti-torture op-ed. However, as is often the case, there is more news in what's not in the papers than in what does appear. And what I don't see right now are op-eds from DNI Negroponte and DCI Hayden and the DDO telling us in no uncertain terms how essential these abusive practices are to their operational success.

Slow Roll Time at Langley

Offered for your consideration ...

See also, from a few days ago:

What is new is that Harman is said to have been picked up on a court-approved NSA tap directed at alleged Israel covert action operations in Washington.

From the archive:

How does our government eavesdrop? Whom do they eavesdrop on? And is the interception of communication an effective means of predicting and preventing future attacks?

Noam Cohen's friend:

Privacy is serious. It is serious the moment the data gets collected, not the moment it is released.

Irony

In an April 21, 2008, New Yorker story, "Vengeance Is Ours," Pulitzer Prize-winning geography scholar Jared Diamond describes blood feuds that rage for decades among tribes in the Highlands of New Guinea. Diamond tells the story using a central protagonist: Daniel Wemp, member of the Handa clan, a blood-thirsty warrior bent on avenging his uncle's death. That quest, writes Diamond, touched off six years of warfare leading to the slaughter of 47 people and the theft of 300 pigs.

Now Diamond's protagonist is fighting Diamond. A two-page complaint filed in New York State Supreme Court on April 20 seeks $10 million from the New Yorker's publisher, Advance Publications, claiming Diamond's story falsely accused Wemp and fellow tribesman Isum Mandigo of "serious criminal activity" and "murder."

From the archive:

In the Highlands of New Guinea, rival clans have often fought wars lasting decades, in which each killing provokes another.

New Guinea Tribe Sues The 'New Yorker' For $10 Million

Richard Posner:

It is tempting, indeed irresistible under conditions of uncertainty, to base policy to a degree on theoretical preconceptions, on a worldview, an ideology. But shaped as they are by past experiences, preconceptions can impede reactions to novel challenges.

One can't expect to receive praise, or even to avoid criticism, for preventing a bad thing from happening unless people are sure the bad thing would have occurred had it not been for the preventive effort. If something unlikely to happen doesn't happen (and, by definition of "unlikely," it usually will not happen), no one is impressed. But people are impressed — unfavorably — by the costs incurred in having prevented the thing that probably wouldn't have happened anyway.

Most people, even most experts, were especially unlikely to be persuaded by prophets of doom in the absence of a machinery for aggregating and analyzing information bearing on large-scale economic risk. There was no financial counterpart to the CIA to assemble an intelligible mosaic from the scattered pieces.

A focus of reform, therefore, should be the creation of a centralized, unitary financial-intelligence apparatus in government that would have complete and continuous access to the books of all financial institutions.

He is talking his book, which comes out in a month.

Richard Posner presents a concise and non-technical examination of this mother of all financial disasters and of the, as yet, stumbling efforts to cope with it.

David Kilcullen:

People don’t get pushed into rebellion by their ideology. They get pulled in by their social networks.

Why the Economic Crisis Was Not Anticipated

Phillip Swagel:

This paper reviews the events associated with the credit market disruption that began in August 2007 and developed into a full-blown crisis in the fall of 2008. This is necessarily an incomplete history: the paper is being written in the months immediately after I left Treasury, where I served as Assistant Secretary for Economic Policy from December 2006 to the end of the Bush administration on January 20, 2009.

The focus here is on key decisions made at Treasury with respect to housing and financial markets policies, and on the constraints faced by decision makers at Treasury and other agencies over this period. I will focus on broad policy matters and economic decisions and not go into the financial details of transactions such as with the GSEs and AIG. A key point of emphasis is to explain constraints on the policy process -- legal, political, and otherwise -- that were perhaps not readily apparent to outsiders such as academic economists or financial market participants.

Some steps that are attractive in principle turn out to be impractical in reality -- with two key examples being the notion of forcing debt-for-equity swaps to address debt overhangs and forcing banks to accept government capital. These both run hard afoul of the constraint that there is no legal mechanism to make them happen. A lesson for academics is that any time the word "force" is used as a verb ("the policy should be to force banks to do X or Y"), the next sentence should set forth the section of the U.S. legal code that allows such a course of action -- otherwise, the policy suggestion is of theoretical but not practical interest.

From the archive, Niall Ferguson:

This hunt for scapegoats is futile. To understand the downfall of Planet Finance, you need to take several steps back and locate this crisis in the long run of financial history. Only then will you see that we have all played a part.

From Decius, last November:

If we have a bunch of people waltzing into the whitehouse who do not appreciate the full implications of the use of the word "require" by a policy maker, we are in very serious trouble.

The Financial Crisis: An Inside View