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As the man who oversees about $20 billion of fixed-income investments at American Century Investments, we revisited with Keegan as part of today’s The Game column on the recurring foibles of Wall Street. Deal Journal: You were right back in April. You called it all. Why does Wall Street keep messing up? Jim Keegan: It’s too profitable to stop. It’s too profitable at the individual level, so the individuals interests are not necessarily aligned with the company’s interest. Pay me now and you pay for it later. There is no clawback. Employees can walk away with hundreds and tens of millions of dollars. And someone else will hire them to do it again.

To be sure, the desire to live in a modern society and to be free of tyranny is universal, or nearly so. This is demonstrated by the efforts of millions of people each year to move from the developing to the developed world, where they hope to find the political stability, job opportunities, health care, and education that they lack at home. But this is different from saying that there is a universal desire to live in a liberal society – that is, a political order characterized by a sphere of individual rights and the rule of law. The desire to live in a liberal democracy is, indeed, something acquired over time, often as a byproduct of successful modernization.

The EU’s attempt to transcend sovereignty and traditional power politics by establishing a transnational rule of law is much more in line with a “post-historical” world than the Americans’ continuing belief in God, national sovereignty, and their military.

Outside powers like the US can often help in this process by the example they set as politically and economically successful societies. They can also provide funding, advice, technical assistance, and yes, occasionally military force to help the process along.

"Jimbo" — was a finance major at Auburn University when the Mises Institute's Mark Thornton suggested he read "The Use of Knowledge in Society," a now-famous essay written by Austro-libertarian economist and Nobel laureate Friedrich von Hayek. The essay argues that prices in the market represent a spontaneous order that results from the interaction of individuals with diverse wants, allowing them to cooperate to achieve complex goals. According to a June 2007 Reason magazine interview, this insight of Hayek's is what led Wales to found Wikipedia. The rather lofty vision that inspired Wales? "Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That's what we're doing."

As is often the case, this paradox can be resolved by recognizing that one of the assumptions is wrong. Here, it's the assumption that U.S. society routinely rejects cruelty and degradation. In fact, the United States is a nation that has no serious objection to cruelty and degradation. Think of the way we accept the use of brutal weapons in war that kill civilians, or the way we accept the death penalty, or the way we accept crushing economic inequality. There is no paradox in the steady mainstreaming of an intensely cruel pornography. This is a culture with a well-developed legal regime that generally protects individuals' rights and freedoms, and yet it also is a strikingly cruel culture in the way it accepts brutality and inequality.The pornographers are not a deviation from the norm. Their presence in the mainstream shouldn't be surprising, because they represent mainstream values:

Even if times ahead are troubled, the long run is likely to look much more settled. In the short run, a housing slump could well make private investors and central banks outside the U.S. less eager to hold dollars. A survey by the U.S. Treasury Department last year indicates that about third foreign-held U.S. corporate debt consisted by asset-backed securities and about half of that was mortgage-related. Petro-dollars held in the Middle East and Russia are particularly mobile. Once foreign money leaves the U.S., the dollar would fall. In the longer run, U.S. exports would rise, shrinking the huge U.S. trade deficit. Moreover, recession in the U.S. would lead to lower imports, further reducing the trade deficit. At the same time, China may well let the yuan rise against the dollar, leading to a rise in its domestic spending relative to its exports. Once U.S. consumers spend less and Chinese consumers spend more, the large global imbalances, which have cast a shadow on the world economy for the past decade, would begin to disappear.

In 1988, NLR Editorial Board member Anthony Barnett distracted a disappointed left into the desert of Constitutional Reform to complete the bourgeois revolution with the organisation Charter 88; in 1995 Will Hutton retailed a version of the Nairn-Anderson thesis in his book The State We’re In effectively drafting Tony Blair’s apolitical modernisation agenda.

Far from being too theoretical the Review was not theoretical enough. The tendency to manufacture deep sociological explanations for transient events certainly showed literary productivity, but it would be wrong to see that as necessarily representing theoretical work. ‘Theories’ were produced that in the end only echoed contemporary trends, without really criticising them. So between them Anderson and Tom Nairn manufactured the theory that Britain’s political revolution was, unlike its Continental counterparts, incomplete; an argument that became known as the Nairn-Anderson thesis. The idea was that the emerging capitalist class in Britain had done a deal with the old aristocracy to gain influence, leaving the old pre-democratic power structures in place; the inordinate influence of the City of London over the British economy, with its old-Etonian clubbishness, Nairn and Anderson thought, was evidence of the persistence of a ‘Gentlemanly Capitalism’.

NLR is financially buoyant because of the library subscriptions from American colleges.

"In crude terms, the Bank is basically providing additional cheap finance to the banks to meet any short term requirements they might face," he said. "An increase in the reserve requirement is in affect an increase in lending to banks at the base lending rate of 5.75%. "It represents a significant increase in the liquidity of the banking system ¿ and relieves pressure on the banks to borrow at the higher penalty rate of 6.75%."

One-third of biggest UK businesses pay no taxBy Vanessa HoulderPublished: August 27 2007 22:02 | Last updated: August 27 2007 22:02Almost a third of the UK’s 700 biggest businesses paid no corporation tax in the 2005-06 financial year while another 30 per cent paid less than £10m each, an official study has found.

The answer is not the obvious one: This country has more machinery or tools or natural resources. Instead, according to some remarkable but largely ignored research—by the World Bank, of all places—it is because the average American has access to over $418,000 in intangible wealth, while the stay-at-home Mexican's intangible wealth is just $34,000.

The global imbalances created by this dynamic of American borrowing and foreign lending appear stable for now, but if they slip suddenly, that could pose serious dangers for middle- and working-class Americans through soaring interest rates, a crash in the housing market, and sharply higher prices for anything no longer made domestically.

was a run on the pound sterling and he blocked the International Monetary Fund (IMF) from stabilizing the currency. With sterling on the verge of collapse, says Frankel, “Eisenhower told them, ‘We are not going to bail out the pound unless you pull out of Suez.’” Facing bankruptcy, the British withdrew. This incident, notes Frankel, “marked the end of Great Britain’s ability to conduct an independent foreign policy.”

n July, The Post reported that insiders were lobbying to shut down the service. After two years, however, the move to do away with TimesSelect may have more to do with growth than grumbling inside the paper. The number of Web-only subscribers who pay $7.95 a month or $49.95 a year fell to just over 221,000 in June, down from more than 224,000 in April.

Global Trade and Conflicting National Interest

"Our objective," Baumol told a policy conference last summer, "is to show how outsourcing can indeed reduce the share of benefits of trade, not only for those who lose their jobs and suffer a direct reduction in wages but can wind up making the average American worse off than he or she would have been."

Economists distinguish between “Risk” and “Uncertainty”: the former can be priced by financial markets while the latter cannot. The distinction between the two was made by the famous economist Frank H. Knight in his seminal book, Risk, Uncertainty, and Profit (1921). In brief, “Risk is present when future events occur with measurable probability” while “Uncertainty is present when the likelihood of future events is indefinite or incalculable”.    This distinction between risk and uncertainty helps to explain the recent market panic and turmoil. Today, the FT cites a market economist at Lehman who said: “We are in a minefield. No one knows where the mines are planted and we are just trying to stumble through it”. A few days ago another market participant put it this way: “It is not the corpses at the surface that are scary; it is the unknown corpses below the surface that may pop up unexpectedly”.   Unknown minefield; unexpected corpses: this is “uncertainty” rather than “risk”. Risk can be measured and priced because it depends on know distributions of events to which investors can assign probabilities. Uncertainty cannot be priced by markets because it relates to “fat tail” distributions and extreme events that cannot be easily predicted or measured.

A few days ago the CFO of Goldman Sachs justified the massive – 30% plus  - losses of the two Goldman Sachs hedge funds by arguing that these were unpredictable “25 standard deviation events” that should occur only once in a million years. The same thing was said by the LTCM “masters of the universe” when their highly leveraged hedge fund went belly up in 1998.

The proliferation of such products, as I have often noted before, carries many benefits for the financial system (most notably that they disperse risk across a much wider pool of investors). But this trend also carries at least one downside; it is adding to the opacity of the financial world. For although many corners of the structured credit universe are becoming more transparent, almost as soon as one chink of light emerges, another shadowy wave of activity emerges that is far more opaque.

productivity, wealth, and national incomes have advanced sufficiently far to support an adequate UBI. And if enacted, a basic income would serve as a powerful instrument of social justice: it would promote real freedom for all by providing the material resources that people need to pursue their aims. At the same time, it would help to solve the policy dilemmas of poverty and unemployment, and serve ideals associated with both the feminist and green movements.

in 1999, the Alaska Permanent Fund paid each person of whatever age who had been living in Alaska for at least one year an annual UBI of $1,680.

By universal basic income I mean an income paid by a government, at a uniform level and at regular intervals, to each adult member of society. The grant is paid, and its level is fixed, irrespective of whether the person is rich or poor, lives alone or with others, is willing to work or not. In most versions–certainly in mine–it is granted not only to citizens, but to all permanent residents.

The "end of the end of history" has many architects. Today, several states (an increasingly assertive Russia and China in particular) embody alternative political models that have come to challenge any notion of liberal-democratic hegemony; others (such as Venezuela and Iran) experiment with forms of rule that too take them further away from its orbit. These models and forms face many problems of their own, but they may not be quite as unattractive - either to the people of these countries or to many observers around the world - as lingering triumphalists in the west might assume.

There has been a tendency to focus the work of democracy-support in very practical ways: toolkits, implementation, strategy and policy. This was and remains essential; but there is also a need to reflect on the underpinnings of these practices in how democracy itself is understood in this new, testing global environment.

The dominance of a liberal-democratic conception with an American accent is reflected in the overwhelming predominance of United States institutions, academics, journals - and ideas - in the democracy-support "industry". Again, this is not in itself a problem: all discourses of democracy are grounded in specific social-political contexts and  power-relations. But the current circumstances of the kind described above - authoritarian challenges, stalled democratic transitions, discontent with democracy, deep and growing economic problems - suggest that an expanded understanding of democracy might be a route towards a healthy redefinition of democracy-support.