opiate of the markets

I recently finished reading Mara Hvistendahl’s excellent book, Unnatural Selection, in which she argues against the devastating consequences of selective abortion of girls in Asia.

A review of this book may be forthcoming but first I want to address the political storm swirling around this issue.

US Christian evangelicals have for years seized upon the problem in their crusade against abortion. So it comes as no surprise that some conservative sources, unaccustomed to seeing their points appropriated (especially in the area of reproductive rights) by a pro-choice feminist, are experiencing cognitive dissonance.

Ross Douthat wrote no less than four pieces on this topic, including three in direct response to Hvistendahl.

In his first piece he asserted that “the sense of outrage that pervades her story seems to have been inspired by the missing girls themselves, not the consequences of their absence.” Next he asserts that because pro-choice jurisprudence “has been founded on a right to privacy, autonomy and personal choice that’s defined in the most expansive terms,” Hvistendahl’s opposition to sex selective abortion amounts to an “abandonment” of the Roe v Wade framework (never mind that she was writing about Asia). In his last piece, citing passages in her book that details a grisly abortion and the facial details of ultrasound, “her book suggests certain [pro-life] conclusions nonetheless.”

Undoubtedly this is an issue that divides the pro-choice community. Many, if not most, will disagree with Hvistendahl’s call for a ban on sex selective abortion, or sex selective preimplantation genetic diagnosis (PGD).

However, Douthat is wrong to argue that Hvistendahl’s position requires an abandonment of the Roe/Doe/Casey framework. None other than Harry Blackmun himself maintained that the right to an abortion was not absolute. ” ‘Whatever they decided was going to be arbitrary, once they decided they had to balance this right to an abortion with the countervailing rights of the potential life [of the unborn fetus],’ said George Frampton, a former law clerk to Blackmun.” [Washington Post]. That is why the trimester system was put in place by Roe to begin with, and why laws like waiting periods and parental consent remain Constitutional under Casey (even if they might not be merited).

One can believe in a fundamental right yet still believe it should be regulated. Guns are one of the most cherished rights in American culture. Yet even the most extreme proponents of gun rights generally accept some regulation of firearms. The least controversial reasons to deny someone a firearm is if they are going to use it for a crime. So if someone is abusing a right to cause a level of damage society finds unacceptable, then it can be regulated while still being a sacred right.

If Hvistendahl’s prescription is a modification of the abortion rights position, it is at most one of omission, because the circumstances she describes are relatively new in scale and scope. It is not about what is a right, but what is an abuse of an already acknowledged right sufficiently consequential for society to take action. However much Douthat and other conservatives would like to believe, there is no inherent contradiction.

Douthat also cites passages from Hvistendahl’s book describing grisly abortions or the human features of fetal life as implying that the real moral outrage is that abortions are happening at all, not their negative effects through trafficking of women, lonely men, and increased risk of violence. Hvistendahl acknowledges that she is both pro-choice and uncomfortable with the mercenary and flippant attitude towards abortion sometimes found in Asia. In this she is no different from millions of pro choice Americans who see that abortion has complex moral dimensions. Douthat is mistaking the strength of Hvistendahl’s portrayal for weakness, nuance for contradiction.

Other conservative reviewers have been cruder. Wall Street Journal reviewer Jonathan Last (in an article with 24,000 “likes” on Facebook) concludes that the book is “aimed, like a heat-seeking missile, against the entire intellectual framework of ‘choice’” after rejecting Hvistendahl’s proposed solution of “banning the common practice of revealing the sex of a baby to parents during ultrasound testing” combined with rigorous enforcement as “neither feasible nor tolerable”, before following up, dismissively, with “I suspect that Ms. Hvistendahl’s counter-argument would be that China and India do not enforce their laws rigorously enough.”

This line is particularly curious, because this is precisely the argument Hvistendahl makes in her book, quite extensively! Had Jonathan Last actually read the entire book, he wouldn’t need to speculate, he would know. And he would also know that the precise solution he dismisses as “neither feasible nor tolerable” worked effectively in South Korea in the early 1990s and in trial runs in small communities in China. Does the Wall Street Journal usually hire reviewers whose articles betray a failure to read the whole book? The Wall Street Journal should be ashamed of itself.

I conclude with Hvistendahl’s own defense of her position: “Sex-selective abortion is wrong because women should account for half of the human population, and in parts of the world they now account for far less. That alone justifies moral outrage.”

Elmus Wicker’s book, Banking Panics of the Gilded Age, looks at long-forgotten financial crises that rocked the United States in the 19th century.

For his purposes, a “banking panic” is defined as: (1) a “general” loss of depositor confidence in at least one region, and (2) the suspension of cash payments. By these standards, there were three panics between the end of the Civil War and the establishment of the Federal Reserve in 1913: (a) one in 1873 with the collapse of Jay Cooke’s investment company, ending a post-war boom and Republican domination of Congress, indirectly leading to the end of Reconstruction in 1877, and ushering in an era of populism, (b) one in 1893 with the collapse of a railroad boom and became the backdrop of Coxey’s Army, the Pullman Strike, the populist campaign of William Jennings Bryan and the realignment of 1896, and (c) one in 1907 with the collapse of the Trust Companies, when JP Morgan organized the private sector bail-out of Wall Street, which convinced the government of the need for a Central Bank.

The foundational piece of legislation in this era was the National Banking Act. The law established tiers of US banks, with state banks and country banks serving rural customers feeding into regional reserve banks, which in turn fed into the central reserve banks in New York City, Chicago, and St. Louis. The country banks were lightly regulated, and the central reserve banks served as “bankers’ banks”. These central reserve banks were required to keep 25 percent reserve requirements at all times.

The big New York City banks formed the New York Clearing House (NYCH) in 1860 to clear checks with each other efficiently. The NYCH served as a sort of de facto Central Bank, issuing currency notes backed by all member banks during liquidity crises. Or pooling of all reserves by member banks. Or, when the cash reserves of its members threatened to fall below the legal limit, the NYCH could order a suspension of payments.

According to Wicker, the NYCH successfully prevented the incipient crises in 1884 and 1890 from blowing up into full blown banking crises. In the former case, after the failure of an investment company run for former U.S. President Ulysses Grant, the NYCH issued loan certificates and bailed out key banks. In the latter case, the NYCH bailed out some banks after rumors about British bank Barings Brothers resulted in a liquidity crunch and the failure of a major brokerage firm. But in 1893, the Panic was mostly driven by Western, Southern and Midwestern banks. The NYCH, with is focus in New York City, wasn’t responsive enough and allowed the Panic to spread. In 1907, the Trust Companies existed outside the NYCH, so the NYCH would not act to stop the panic, and only JP Morgan was able to stop it. Wicker argues that the NYCH was no substitute for the Federal Reserve.

In a move that will only further enrage progressives, the Obama Administration filed a brief supporting utilities in a Supreme Court case involving climate change. A group of eight states, three land trusts and New York City sued the Tennessee Valley Authority and eight other utilities in 2004 alleging that their burning of fossil fuels to generate electricity constituted a public nuisance because it contributed to climate change. The plaintiffs sought an injunction requiring the utilities to commit to a specified annual reduction in greenhouse gas emissions over at least a decade. The district court ruled against the plaintiffs but the Second Circuit Court of Appeals, based in New York City, reversed that decision in 2009.

Although the Obama Administration’s move is seen as just the latest example of it catering to business interests, its position is defensible as a theoretical matter. Climate change is a complex scientific phenomenon that needs to be addressed comprehensively at a national and ideally at a global level. A regulatory body like the Environmental Protection Agency that possesses the requisite technical expertise is best suited to promulgate rules concerning greenhouse gas emissions. Courts, in contrast, resolve only the discrete cases before them and lack the expertise of an agency like the EPA. Court-mandated solutions to climate change are likely to be piecemeal and incomplete. One court may order an already efficient and comparatively green utility to commit to further reductions in greenhouse gas emissions while a more conservative court may allow an inefficient utility with a large carbon footprint to do nothing. The result is likely to be legal confusion that does little to reduce the unacceptably high level of annual greenhouse gas emissions. If climate change were a small problem capable of being addressed at modest economic cost, a judicial solution might be tolerable. Since it, however, is the most challenging problem facing humanity and requires a fundamental restructuring of the world’s energy economy, judicial rulings are likely to produce an outcome that is both ineffective and inefficient.

The administration’s position is reasonable if it intends to enact regulations to address climate change in the near future. In other words, regulation must be an actual, as opposed to theoretical, substitute for litigation. At this point, Congress is not going to pass a meaningful climate bill. Under the Clean Air Act, however, the EPA already has the authority to regulate carbon dioxide emissions and has made an official finding that carbon dioxide is a pollutant harmful to public health. What will happen next is unclear. Those who recognize the grave threat posed by climate change hope that the EPA will require new electric generation plants and large industrial facilities to install the most advanced pollution control technology. If this happens, a new coal-fired power plant, for example, may be required to incorporate technology that captures carbon dioxide emissions for the purpose of underground sequestration. A command-and-control solution like this one is perhaps not as cost-effective as a carbon tax or cap-and-trade system on greenhouse gases but it is much preferable to doing nothing for several more years. If the EPA exercises its full statutory authority, the administration’s brief in support of utilities is a pragmatic recognition that regulators are better equipped to tackle climate change than judges. If the EPA fails to act in the coming year, however, progressives are right to treat the administration’s move as its latest capitulation to corporate interests. In fact, under this scenario, litigation against big polluters like electric utilities, imperfect as it may be, is likely the only way to compel action from the do-nothing branches of the federal government.