In Washington the usual excuses, familiar from Bosnia to Libya, were offered: the global isolation of the perpetrators (which is incorrect, since they always have Russia); the terrifying might of the Syrian army; the obscurity, or the disunity, of the opposition; the hidden hand of Islamists and terrorists; and so on.

…

Trashing Force may win you a lot of friends, but it is stupid. There is nothing “artificial” about the primacy of defense because there is nothing artificial about threats and conflicts and atrocities. The American political system’s “disinclination” to war must not be promoted into a disinclination to history. We are not the country we were in the eighteenth century, as every liberal insists about every other dimension of American policy. Anyway, this is what President Jefferson said in 1806: “Our duty is, therefore, to act upon things as they are, and to make a reasonable provision for whatever they may be.”

It’s quite a spectacle—breathtaking sleight of hand.

There is a good bit in there, though:

I would prefer that our leaders were more candid and simply said that they can live with the murder of innocents and the destruction of democratic aspirations and the regional influence of the mullah and the madman in Tehran because immediate and effective action against these circumstances would contradict their conception of American power.

I too wish this. For I imagine that if put up to some kind of discussion, a consensus would be quickly reached that American power is not in fact meant to be used in order to right injustices around the world. And our debate over Iran would likewise benefit from some cost-benefit and regional strategy thinking, shorn of all the grandstanding about democracy, opposition groups, and the like.

The simple yet appalling fact is that we have very little solid evidence that literary studies do very much to enrich or stabilize moral perception, that they humanize. We have little proof that a tradition of literary studies in fact makes a man more humane. What is worse — a certain body of evidence points the other way. When barbarism came to twentieth-century Europe, the arts faculties in more than one university offered very little moral resistance, and this is not a trivial or local accident. In a disturbing number of cases the literary imagination gave servile or ecstatic welcome to political bestiality. That bestiality was at times enforced and refined by individuals educated in the culture of traditional humanism. Knowledge of Goethe, a delight in the poetry of Rilke, seemed no bar to personal and institutionalized sadism. Literary values and the most utmost of hideous inhumanity could coexist in the same community, in the same individual sensibility…

Language and Silence ordered.

A friend wrote, “Now I really want to read an obituary for someone you don’t like.”

Consider the DeLong post from yesterday in this light. The ECB (which the Germans are preventing from acting) is the Fed, and the peripheral countries are Morgan Stanley. Using Bagehot’s rule (as paraphrased by DeLong), the ECB should be the lender of last resort, but it should only be bailing at a penalty rate. What could such a “penalty rate” mean in the European context? It only sensibly maps to some sort of loss of national sovereignty among the peripheral countries in the immediate future.

The reason I have so little faith in this working out is that I don’t see many countries agreeing to these kinds of terms. Indeed, it’s the central reason I’ve always been a Euroskeptic. Since WWII, European leaders have underestimated the importance of national feelings, always to their detriment. Until now, however, it hadn’t been an error of much consequence.

In the fall of 2008, counting the Fed and the Treasury together, a peak of 90% of Morgan Stanley’s equity—the capital of the firm genuinely at risk—was U.S. government money. That money was genuinely at risk: had Morgan Stanley’s assets taken another dive in value and blown through the private-sector’s minimal equity cushion, it would have been taxpayers whose money would have been used to pay off the firm’s more senior liabilities. “Fully collateralized” the loans may have been, but had anything impaired that collateral there was no way on God’s Green Earth Morgan Stanley—or any of the other banks—could have come up with the money to make the government whole.

When you contribute equity capital, and when things turn out well, you deserve an equity return. When you don’t take equity—when you accept the risks but give the return to somebody else—you aren’t acting as a good agent for your principals, the taxpayers.

Thus I do not understand why officials from the Fed and the Treasury keep telling me that the U.S. couldn’t or shouldn’t have profited immensely from its TARP and other loans to banks. Somebody owns that equity value right now. It’s not the government. But when the chips were down it was the government that bore the risk. That’s what a lender of last resort does.

That’s why Bagehot’s rule is to lend freely but at a penalty rate. The bankers should not profit from the fact that they were over leveraged, and compelled the government to act as a lender of last resort.

DeLong’s been super-useful of late. His vituperative arguments against the Austrian fetish for intrinsic value (goldbuggery) [1, 2, 3, 4, 5, 6] have been delightful, as was this broadside against Nozick.

I do wish his site’s permalink structure wasn’t quite so opaque and broken-seeming.

The way this reasoning is both muddled and ahistorical… you really can’t get a more textbook example of mission creep if you tried.

Two highlights. First, a personality trait worth noting:

She produces a morality play rather than a conventional history. In a sense, Power, you could argue, is addicted to hero worship, beginning with Raphael Lemkin and ending with Obama. In fact, in her acknowledgments, she observes that she offered “whatever help I could to Barack Obama, the person whose rigor and compassion bear the closest resemblance to Sergio’s that I have ever seen.”

Second: Did you know that a young Walter Lippmann drafted Wilson’s 14 Points? That explains a whole lot.