I would say I'm genuinely torn...

... but I don't think I am.

Chris LeBarton jumped at the chance to get in on Facebook’s initial public offering. The Potomac investor and a group of friends pooled $50,000 to purchase $35 pre-offering shares through a hedge fund connection.
He said he knew it was a gamble, but he never imagined he would get cheated. After Facebook’s stock closed almost break-even its first day of trading and then fell for a few days before recovering modestly, LeBarton and his friends are looking at a paper loss of 6 percent.
“I went into this not even thinking about that possibility,” he said. “The big guys made out, and it seems the little guys got burned.”

When you are doing anything through a "hedge fund connection," you should be a little skeptical. When one has an inner track on something, it is tough to be too upset that your inner track wasn't the innermost.

The worst sort of trash...

BY ROBERT RUBIN Congress's failure to reach a fiscal "grand bargain" last summer manifested the deep economic-policy divide separating Democrats and Republicans. Fortunately, the so-called fiscal cliff will soon create an extraordinary second opportunity for a breakthrough compromise.

Oh thank heavens for that. I've always disliked the millennialism of the elite centrist class. This is their wet dream equivalent of the Marxist's "heightening the contradictions," that a worsening situation--the brink, the abyss, the fiscal cliff--will cause a fracture in the fabric of regular politics, an eruption of the stupendous energy that has been locked in gridlock. Yes, I mean the achievement of a bipartisan political settlement that will finally put politics behind us, or at least will put it behind us on the one thing they insist they care about. And this time, I promise, this time the Republicans will not turn around next time they have office and say that the largest single threat to the nation is a surplus, and that this must all be given away in upward tax cuts. This time Lucy will hold the fucking football and Charlie will kick it into fiscal heaven.

Washington's continued failure to get our fiscal house in order poses five basic risks. One, government borrowing risks crowding out private investment. Two, our unsustainable fiscal outlook undermines business confidence by creating uncertainty about future policy, economic conditions and our ability to govern, which in turn dampens investment and hiring.

Never you mind about the huge downside risks to actually living people who are already suffering and under severe economic stress. We have the risk of crowding out, of which there have been exactly zero indicators that it has arrived. Certainly if one continues to press on the accelerator, there comes a time when one goes faster than they can handle. Presumably, one starts to slow down when there are reliable indicators that they are indeed going too fast, and not just when one recognizes that one is speeding up. Crowding out is a real phenomenon. As such, it has real indicators of whether it is happening. It isn't. When investors are putting their money in government debt because of the prices it commands (currently costs them money to lend to the US government, and yet they continue to do so), and not because of the security it entails, that is the time to start worrying about crowding out.

Rubin, however, comes to a not terribly unreasonable position of a "10-to-12 year track of deficit reduction that stabilizes the ratio of debt to GDP and then begins to bring it down." That's not obviously problematic, although it was interesting to see the words "Health Care spending" mentioned not once, nor tagged with the clause (which should always follow) "... will devour private and public entities alike." By beef is with the tone, the "fortunately," and the total divorce of pearl-clutching concerns from reality.

Yes, but....

But the resulting uproar, in Washington and on Wall Street, has largely obscured a simple truth of the marketplace. Yes, Morgan lost big — but, as Mitt Romney has pointed out, someone else won. And that someone or, rather, those someones, turn out to be Boaz Weinstein and a wolf pack of like-minded hedge fund managers.

But the "resulting uproar" was not over the fact that there were winners and losers, but over the fact that (1) a systemically important institution had lost a couple billion (more? less?), and that accordingly there are consequences for the financial system and for the real economy that are are considerably magnified, (2) that the loss revealed that JP Morgan did not have control over its derivatives book, which again, is a magnified problem with the company in question is a systemically important one, and (3) that they had made these losses because they had turned their CIO, responsible for hedging investments and thereby reducing risk, into a high-stakes gambling shop.

The "simple truth of the marketplace" was not "largely obscured," but almost wholly irrelevant to the "resulting uproar." If Azam Ahmed does not realize this,[1] he should be on a different beat.

[1] The thing is, he probably does realize it. The line just sits there irritating me, a sloppy entry into his main feature: an obsequious piece of fluff on hedge fund managers.

Straw men to the left of me,

Yglesias might believe this. If he does, he has fallen into a fantasy world of straw men debates.

To an extent, the edu-left has been arguing that it's not reasonable to expect public schools to get good outcomes out of troubled kids and now Romney's arrived with a plan that will in fact give up on that aspiration.

One of the reasons I stopped reading Yglesias was not his neoliberalism, which I try generally to follow and at least keep abreast, but rather his tendency to debase the arguments of others. Left-inclined education policy thinkers tend to believe that (1) the primary determinant of education outcomes is the various non-education dimensions of the reproduction of poverty, and that (2) policies that might seem reasonable or even desirable in the abstract are in practices formulated and implemented in such a way that the public ends up distributing money upwards, to the wealthy and private interests. Which is Yglesias' point in this article.

Hence, they are reticent about charter schools, they would like state-wide funding, they are opposed to school choice not because of the choice, but because they are designed and implemented to suck money from the public coffers while not actually achieving meaningful school choice. These are the debates I hear among leftist education policy experts.

No one thinks it is unreasonable to expect schools to achieve improvements. But Yglesias postures that anyone who thinks that the possibility of gains is not linear, and that structural disadvantages make it increasingly difficult to achieve positive outcomes (the marginal effect of good education is greatest at the middle, it is smaller at the extremes... not very controversial), and who is conservative relative to on-the-table policy proposals is "arguing that it's not reasonable to expect public schools to get good outcomes out of troubled kids."

This is cheap, this is why I stopped reading Yglesias.

p.s. As good a time as any to link to Daniel Denvir's article on the battle over Philly schools.You will find lots of concern and conservatism relative to the proposed reforms, but you will find little in the way of suggestion that it is unreasonable to expect public schools to get good outcomes out of troubled kids.

For future reference, Section 4 of the VRA

Will be worth paying close attention to in coming months