Politeía Digest

Quis custodiet ipsos custodes?

Sunday’s New Yorker (VI)

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The Financial Page

The Regulation Crisis

A few weeks after B.P.’s Deepwater Horizon oil rig blew up and crude started spewing into the Gulf, Ken Salazar, the Secretary of the Interior, ordered the breakup of the Minerals Management Service—the agency that was supposedly in charge of offshore drilling. It was a well-deserved death: during the past decade, M.M.S. officials had let oil companies shortchange the government on oil-lease payments, accepted gifts from industry representatives, and, in some cases, literally slept with the people they were regulating. When the industry protested against proposed new regulations (including rules that might have prevented the B.P. blowout), M.M.S. backed down. Franklin Delano Roosevelt, when he hired the famed stock manipulator Joseph P. Kennedy as the first head of the S.E.C., said, “Set a thief to catch a thief.” M.M.S.’s modus operandi was more like setting a thief to help other thieves get away with the loot.

M.M.S.’s bad behavior was unusually egregious, but it’s hard to think of a recent disaster in the business world that wasn’t abetted by inept regulation. Mining regulators allowed operators like Massey Energy to flout safety rules. Financial regulators let A.I.G. write more than half a trillion dollars of credit-default protection without making a noise. The S.E.C. failed to spot the frauds at Enron and WorldCom, gave Bernie Madoff a clean bill of health, and decided to let Wall Street investment banks take on obscene amounts of leverage, while other regulators ignored myriad signs of fraud and recklessness in the subprime-mortgage market.

These failures weren’t accidents. They were the all too predictable result of the deregulationary fervor that has gripped Washington in recent years, pushing the message that most regulation is unnecessary at best and downright harmful at worst. The result is that agencies have often been led by people skeptical of their own duties. This gave us the worst of both worlds: too little supervision encouraged corporate recklessness, while the existence of these agencies encouraged public complacency.

The obvious problems of graft and the revolving door between government and industry, in other words, were really symptoms of a more fundamental pathology: regulation itself became delegitimatized, seen as little more than the tool of Washington busybodies. This view was exacerbated by the way regulation works in the U.S. Too many regulators, for instance, are political appointees, instead of civil servants. This erodes the kind of institutional identity that helps create esprit de corps, and often leads to politics trumping policy. Congress, meanwhile, often takes a famine-or-feast attitude toward funding, allocating less money when times are good and reinflating regulatory budgets after the inevitable disaster occurs. (In 2006 and 2007, for instance, Congress effectively cut the S.E.C.’s budget, even as the housing bubble was bursting.) This makes it hard for agencies to do consistent work. It also contributes to the sense that regulation is something it’s O.K. to skimp on. Read more in The New Yorker.

Books

Globish For Beginners
If the whole world speaks English, will it still be English?

In 1834, Thomas Babington Macaulay, the British historian and statesman, arrived in Madras. He travelled north to Calcutta, then India’s capital, to assume the role of Law Member of the Governor-General’s Council. “We know that India cannot have a free Government,” Macaulay had written to the Scottish philosopher James Mill the year before. “But she can have the next best thing: a firm and impartial despotism.” A few months later, Macaulay wrote a memo on Indian education, which stated, “It is impossible for us, with our limited means, to attempt to educate the body of the people. We must at present do our best to form a class who may be interpreters between us and the millions whom we govern; a class of persons, Indian in blood and colour, but English in taste, in opinions, in morals, and in intellect.” The implication was obvious: Indians must learn the language of their occupiers.

With Macaulay’s backing, schools instructed Indian students in English, a language that offered “ready access to all the vast intellectual wealth, which all the wisest nations of the earth have created and hoarded in the course of ninety generations,” whereas Sanskrit and Arabic offered only “false taste and false philosophy.” By 1840, according to Macaulay’s biographer Robert E. Sullivan, “English was the dominant language in Calcutta.” In 1857, English-speaking universities opened in Madras, Bombay, and Calcutta. Macaulay’s vision of an independent class of Anglophone Indians was being realized.

But this development was not without irony: 1857 was also the year that Indian soldiers rebelled against the East India Company’s century-long rule. The uprising was ruthlessly put down, but the shock it provoked in London brought about the dissolution of the East India Company and the establishment of the British Raj. The rebellion is now regarded by many Indians as the first war of independence. What’s more, the generations of independence leaders who emerged in the wake of the rebellion tended to be educated English speakers—from precisely the “class” that Macaulay had sought to create. In 1950, the Indian constitution was ratified; it was written in English. Read more in The New Yorker.

Earthmoving Dept.

Rising

A very morning at four-thirty, sixty concrete trucks—from Brooklyn, from Queens, from New Jersey—race in the dark over bridges and through tunnels and converge at the intersection of West and Vesey Streets, where One World Trade Center is going up. Concrete is perishable. A load will spoil in ninety minutes once it has left the batching plant. The trucks pull up to the construction site. They dump their loads into big baskets with hydraulic pumping systems. Eleven thousand three hundred tons of superstructure steel are waiting. The other day, Chris Ward, the executive director of the Port Authority, which is supervising the project, stood three hundred feet in the air, on what will be the twentieth of One World Trade Center’s hundred and four floors, and said, “This site will be understood by the public on how well this tower rises, but the real metric is how quickly the concrete gets poured.” Toward the building’s core, where office workers (including, perhaps, employees of this publication, whose parent company has considered relocating to the tower) will one day ride elevators, members of Local 46 of the Metallic Lathers and Reinforcing Ironworkers union were torch-cutting rebar. Sparks flew. Below, tiny fluorescent-vested figures trundled dollies and hoisted planks in what looked like a scene from “Fraggle Rock.”

Ward, who is fifty-five, took the Port Authority job in May of 2008. He inherited a huge, politically impossible mess: nineteen public agencies, two developers, a hundred and one contractors, and thirty-three architects have stakes in the World Trade Center redevelopment project. Ward’s first act was to order a reëvaluation of the plans for the site. Thanks to him, a memorial will be completed in time for the tenth anniversary of September 11th—sooner than it might have been, but, for a lot of people, not soon enough. Ward wears a blue suit and speaks like a technocrat (“We’ve got some really creative ideas about wayfinding and signage”), but his handshake is a crusher and he knows his girders (“These super-columns right here? They’re sixty feet long and they weigh seventy tons”). He didn’t like the name Freedom Tower—as One World Trade Center was originally called—any more than anyone else did. He said, “That sense that New York needs a new downtown, that we need to defeat the terrorists—was it inevitable, that language? I don’t know, but I can understand why it happened.”

He is concerned that large-scale, sentimental thinking—“monumentalism,” he calls it—has paralyzed the rebuilding process. “The political rhetoric, the sense that New York had to do everything huge at one time, obscured the construction reality,” he said. He pointed out some steel bundles, dangling from a crane, and explained how the speeded-up schedule for the memorial affected the sequencing of PATH service, which affected the building of the “1 box”—the pod that encases the tracks of the No. 1 train, which runs directly through the site—which, in turn, affected the building of Larry Silverstein’s Three World Trade Center. To Ward, the site is a delicate, mutating mesh of counterweighted considerations—a high-stakes game of pickup sticks. Read more in The New Yorker.

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Written by Theophyle

June 20, 2010 at 1:05 pm

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