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Title

Taibbi Goes for the Throat

Description

In discussions between two opposing viewpoints, people tend to choose a "winner" based on who's willing to raise the volume and lower the level of discourse. If they can identify with one side's points---or have no reason not to believe them---they tend to identify that way. Simplistic and specious reasoning, straw-man logic and outright, bold-faced lies often carry the day. Check out any Bill O'Reilly interview<fn> and you'll see a master of the form at work. Now, the right-wing version involves <i>removing</i> information from the debate, distilling the debate down to an opinion rather than building a basis of shared, accepted fact. The left-wing argument tends to get swamped in information, which is wonderful if you actually care about information and solutions---if you actually believe that the Enlightenment was a good thing. Take a look at Obama or Biden during the debates; regardless of whether you agree with their policies or not, you have to admit that they are firing a serious amount of knowledge when they speak. But they do it so damned politely. They're missing the fire in the belly, missing the instinct to go for the throat and <i>slam</i> their opponents for being ignorant and smugly so. Matt Taibbi goes for the throat. He's pretty well-informed; he overreaches sometimes too, but no one's claiming he's perfect, just intellectually better-equipped than the mental midgets with whom he enters into the ring. He recently squared off with <a href="http://nymag.com/daily/intel/2008/10/matt_taibbi_and_byron_york_but.html" source="NYMag" title="Matt Taibbi and Byron York Butt Heads Over Whether McCain Deserves Blame for the Wall Street Meltdown">Byron York</a> in a live chat and quickly noticed that Mr. York was sticking to his original thesis without regard for new information. Now, that's just par for the course in any discussion, but Taibbi noticed that York thought much of his opinion on what caused the current financial crisis, but seemed not to have any idea what a Credit Default Swap was. York was chirpily blaming poor people defaulting on bad mortgages for the crisis and dismissed the possibility that the glorified OTB of CDS trades had anything to do with it---because he'd never even heard of them. Here's York's argument: <bq>I think that Fannie Mae and Freddie Mac were also major factors [...] the Democrats' desire to give mortgages to people, particularly minorities, who could not afford them, and the Republicans' desire to achieve an "ownership society," in part by giving mortgages to people who could not afford them.</bq> In other words, poor people are---not solely, but primarily---to blame. Here's Taibbi expressing amazement: <bq>Oh, come on. Tell me you're not ashamed to put this gigantic international financial Krakatoa at the feet of a bunch of poor black people who missed their mortgage payments. The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm's Commodities Future Modernization Act, this is now a $62 trillion market [...] That's like five times the size of the holdings in the NYSE. And it's all speculation by Wall Street traders. It's a classic bubble/Ponzi scheme.</bq> A <i>Credit Default Swap</i> is basically a bet on whether or not a particular credit will fail or not. Neither the buyer nor the seller has to even own the credit in question, so there is no limit to the number of brokers that can speculate on a single credit. There is, of course, more to it than that, but it's all just window dressing meant to make it look like this $62 trillion market<fn> is somehow more sophisticated or useful to real people's lives than a craps table. York completely ignored that line of reasoning, which is when Taibbi smelled blood in the water and went after him---instead of giving him a pass, as so often happens when a dumb guy is losing an argument. <bq>Do you even know how a CDS works? Can you explain your conception of how these derivatives work? Because I get the feeling you don't understand. Or do you actually think that it was a few tiny homeowner defaults that sank gigantic companies like AIG and Lehman and Bear Stearns? Explain to me how these default swaps work, I'm interested to hear. [...] Tick tick tick. Hilarious sitting here while you frantically search the Internet to learn about the cause of the financial crisis — in the middle of a live chat interview.</bq> Of course, it's not nice to make fun of the uninformed, which is why it happens so rarely. But, when one of the uninformed poses as bearer of truth, he or she deserves whatever they get for trying to get us to convince us to join their side. Imagine if Joe Biden had had the <i>cajones</i> to go after Sarah Palin in the same way whenever she started in on one of her canned speeches instead of answering a question. Now that would have been fun. <hr> <ft><a href="http://www.youtube.com/watch?v=MUOFTPbxuWA" source="YouTube">Clip of Tim Russert - Paul Krugman vs O'reilly</a> is an excellent example. At eight minutes, it's way too long and highly irritating to watch, but it illustrates the effectiveness of O'Reilly's methods perfectly: note how Tim Russert does almost nothing to control him or refute any of the dozens of falsehoods he spews across the table.</ft> <ft>With some estimates going much higher, to $300 trillion. It's very difficult to say because the market is completely unregulated and companies are not required to open their books on it.</ft>