When video game metaphors go wrong

The Daily News has a decidedly unflattering piece on Eliot Spitzer. Newly released records confirm that when former governor Spitzer was being investigated for the Troopergate scandal, he wasn't at all happy about it. Towards the end he's quoted calling the Inspector General "one more little Pac-Man participating in this fishing expedition."

Now, the investigator-as-fisherman metaphor is tried and true and probably goes back millenia, because it makes sense. It suggests that what the investigator is looking for (i.e. incriminating evidence) will be difficult to find, and that even if he is able to produce any at all, it will only have been thanks to his strenuous effort and dumb luck, rather than because such evidence was abundant.

But investigator-as-Pac-Man? To me that sounds like a guilty man who knows he's been caught. Does Pac-Man have speculate as to the existence or whereabouts of white dots? Does Pac-Man have to blackmail a green dot into passing itself off as a white dot so he can get points for it? No. Pac-Man is completely surrounded by the white dots he craves. He can run free in any direction and stuff himself with dots until he runs out of real estate, then hang a left and gobble up some more. It's just a question of route optimization. He's not on some fool's errand for some "alleged" dots that he's only looking for because he wants to embarrass Eliot Spitzer.



via

What do we do when we fall off the horse?

It was almost exactly nine months between Eliot Spitzer's prostitute-related resignation and his debut column in Slate, and now just a few months later, unnamed sources are telling the Post he thinks he can be a contender for Attorney General (again).

First of all, when Post readers start in on a piece about Eliot Spitzer, they don't want to be kept waiting for the single entendres, and Murdoch's wordsmiths don't disappoint. The fourth and seventh words of the piece are "flaccid" and "re-erecting," respectively.

But what of Spitzer, the man? I still say he's a huge scumbag. As an anonymous "longtime observer" said: "The whole idea of returning to Albany is preposterous. You can't go home again. He's a pariah. It wasn't just the prostitutes -- there was also Troopergate."

Or at least, I think the idea of him returning to Albany should be preposterous. In practice, I like his odds. He may have done all he could to squander it, but as personal political brands go "Scourge of Wall Street" is just too hot right now.

Spitzer is beloved by what I think of as the Greenwald/Digby segment of the Democratic electorate. They think the whole prostitute thing was a bad rap, noting that a) nobody really cares and b) when a Republican senator was caught doing the exact same thing he didn't even have to resign. And I agree with them on both those points. I just think Troopergate was that bad, and while his first stint as AG was useful in getting him elected governor, he didn't actually achieve much in the way of convictions or reforms.

I like the idea that sex scandals are becoming like Tommy John surgery (season-ending but not career ending, with the recovery period getting ever shorter as the technique is perfected). I just wish that this particular politician weren't so likely to make it back.

h/t

I guess real estate didn't take

A little under nine months. That's how much time passed between the breaking of the Eliot Spitzer prostitute story and his first column for Slate. The title of this business column is "The Best Policy." That would of course be a reference to the old saw: "Committing adultery is the best policy." Anyway I have a few gripes with the debut column itself:

1. I don't think the fact that international buyers now trust the Chinese to manufacture aircraft (instead of, say, shoes or consumer electronics) is terrible news for America.

2. Using $7.8 trillion figure for the "cost" of the bailouts is pretty misleading. Yes, he specifies that it includes guarantees but he nonetheless talks about the money as if it's been "spent." The government hasn't spent anywhere near that much money. The difference between taking a loss and being exposed to a loss is very big.

3. Spitzer writes:

For years, we have accepted a theory of financial concentration—not only across all lines of previously differentiated sectors (insurance, commercial banking, investment banking, retail brokerage, etc.) but in terms of sheer size. The theory was that capital depth would permit the various entities, dubbed financial supermarkets, to compete and provide full service to customers while cross-marketing various products. That model has failed..."

This is nonsense. If anything the "financial supermarket" model has been vindicated. Look at the biggest of the survivors: JPMorgan Chase, Bank of America, and Citi... all of them are supermarkets, with retail branches and investment banking operations. Bear and Lehman were pure investment banks, as was Merrill (which didn't end quite as badly). And now the remaining pure investment banks are looking to get into the retail business, because deposits are the readiest source of funding these days.

The problem isn't that the banks were supermarkets, it's that their proprietary trading, and the amount of risk they took on in general, was wildly irresponsible. But that mismanagement didn't flow necessarily from the diversity of business lines, and there are better ways to address it than to try to arbitrarily cap banks at a certain size. Reserve requirements can be imposed, better underwriting standards can be enforced in the mortgage industry, the rating agencies can be blown up reformed, etc.

I don't have a problem with "true competition with winners and losers; companies that disappear; shareholders and CEOs who can lose as well as win..." But it's worth separating the practices which are intrinsically flawed and prone to causing financial catastrophe from those that aren't.

Anyway I'm not a huge fan of the piece. It's pretty interesting, though, I'll give him that. I'll continue to read him even though he's a scumbag.

File under: You've got to be kidding

In a not nearly tongue-in-cheek enough post, Steve Benen suggests Eliot Spitzer as a possible SEC chair:

Yes, he hired a call girl, but so did Sen. David Vitter (La.), and he's still a sitting Republican senator in good standing, who apparently plans to seek re-election. Yes, he committed adultery, but so did Newt Gingrich (thinking about running for president), Rudy Giuliani (thinking about running for governor), and John McCain (the most recent Republican presidential nominee). Do we have to exclude Spitzer from addressing the issues on which he has considerable expertise?

Yes. Yes, we do. Not so much because of his exploits as Client #9, although there's enough pragmatist in me to think it should at least be taken into consideration.

The better reason not to trust Eliot Spitzer with an incredibly important and (at least until this crisis subsides) high profile position is his use of the NY State Police to dig up dirt on Joe Bruno, the Republican leader in the state legislature. That was very bad. It was enough to make me not like Eliot Spitzer anymore, which made things a lot easier when he did something that was less germane to his job performance but vastly more damaging to his career. It wasn't quite like, say, Karl Rove's successful efforts to get Don Siegelman jailed on bogus charges, but it was still a flagrant abuse of power and a perversion of the criminal justice system.

Also, despite his "expertise" in financial regulation, his actual track record in terms of prosecutions is extremely poor. At the time I was annoyed by (overwhelmingly right-wing) critics who said he was just doing it for the glory of perp walks and press conferences, but none of the high-profile Wall Street cases he brought actually resulted in prosecutions, which would have made it a lot easier to defend him from those accusations.

There are plenty of qualified, reform-minded Democrats who could serve as SEC Chair, and all of them would be better choices than Eliot Spitzer.

h/t Noam at Eschaton

Cuomo sues UBS

Blargh. You would think maybe in a post-Hookergate era the New York attorney general might pass on high profile but substantively suspect cases against Wall Street evildoers. "The Next Eliot Spitzer" as a brand is not what it once was.

Anyway this thing is just stupid. On the one hand, UBS almost certainly did what they're accused of, namely exaggerating the extent to which Auction Rate Securities (ARS) are like cash. On the other hand, my impression is that they weren't peddling this stuff to little old ladies who didn't understand what they were buying. A lot of big corporations owned these things because they paid high yields, and we're supposed to believe they didn't understand the "auction" concept? I mean if they tell you they trade in auctions you don't have to be too skeptical to ask what happens if no one bids (like, on account of a massive credit crisis of the sort we're experiencing).

Incidentally, what happens if no one bids isn't that bad! Their holders aren't able to sell them and get their principal back, which obviously is a problem if they need it right away, but the interest rates they earn go to a maximum penalty rate that was set when the bond was issued.

This process is extremely painful for the bond issuer, which for a lot of ARS is a city or state, who will look to refinance the debt as soon as possible, and when that happens the poor institutional investors who have been out of pocket will get their precious principal back (again, having been paid confiscatory interest rates for their trouble).

I have no love for UBS, but this a dumb/clearly politically motivated thing for the NY AG to be spending a lot of time and resources on. Caveat emptor.

h/t DealBreaker