A Wealth of Notions

Zooey Deschanel

2012-02-02T04:54:00.000-08:00

I do not normally pay much attention to entertainment news, celebrity gossip and such but my eye was caught by a recent Slate item. Apparently there has been a lot of blog criticism of "Zooey Deschanel's Girly Problem". I happen to like Zooey, although I haven't seen her new since last fall show The New Girl, (I don't watch much TV). I first encountered her in the film Elf where in a shower scene she sings one side of the classic duet, "Baby, It’s Cold Outside" -- unaware that Will Ferrel's character, the elf, is nearby and is singing the other part. I was instantly captivated by her sweet voice and honest interpretation. I went out of my way to see her again in The Yes Man and everything of her's I could find on YouTube. I like that she fits her style well to the song instead of, as many singers do, unconditionally imposing an elaborate personal style onto it.

Perhaps, like me, she seems to represent a more idealistic, less cynical age. I can't help it -- I've been a big Audrey Hepburn fan too.

The meaning of the Romney candidacy.

2012-01-22T16:06:00.000-08:00

In economic theory there are classically four "factors of production": land, labor, capital and management -- that last often going by other names such as "enterprise" or "entrepreneurship". In a healthy market economy supply and demand causes each factor of production to be used efficiently and rewarded according to its contribution. I believe there exists today a macroeconomic distortion that benefits capital and management over land and labor. Evidence of this is not simply the historically outsized returns, (i.e. corporate profits and management compensation), to those favored factors and the stagnation of wages but also the damage allowed to the environment and neglect of infrastructure, (indicative of deficient demand for and undervaluation of land resources).

In my opinion, this results from the over-stimulation of the financial sector that excessively empowers organizations like Bain which represent the capital and management factors. Whenever we hear rhapsodic praise for somethings of value, such as the liquidity and deregulation enabled creativity of the financial sector, we must remind ourselves that there is always a point of having too much of a good thing and we should ask what such an occurrence would look like should it develop. We have had, and still have, too much bubble producing leverage in the system and it stems, basically, from too much money creation. It feeds into the financial markets and acts like "empty calories" to create fat, bloated financial organizations on something like a sugar high because they simply have more money than is good for them -- or us.

The situation has advanced to the point that capital and corporate management interests have developed an ideology, which I call "corporatism", to justify its continuation and its growing influence within government This is the meaning of the Romney candidacy.

A dangerous sanctions policy

2012-01-11T06:25:00.000-08:00

Do sanctions work? The most comprehensive study comes from Kim Elliott, Jeffrey Schott, and Gary Hufbauer, fellows at the Institute for International Economics, a think tank with a free-market bent. A sanction "works," in the authors' formula, if it accomplishes the goals identified by U.S. policy-makers at the outset of a sanctions program, like ending apartheid in South Africa or undermining Libya's support of terrorism. Examining 35 U.S. sanctions programs in place since 1973, the study estimates they have succeeded 23 percent of the time.

Our best intelligence estimate is that, for the time being, Iran is not working on building a nuclear weapon. Frequently used coy phrases in the media like "nuclear activities" are references to uranium enrichment to low levels suitable for peaceful applications. Ending that, despite its legitimacy under the NPT as an "inalienable right". is the actual goal identified by U.S. policy-makers at the outset of the sanctions and which is likely to fail.

If sanctions fail better than 3 out of 4 times on average they are even more likely than that to fail in the case of Iran since what they aim to defeat is not a moral offense like apartheid or a dictatorial regime already fighting an active rebellion but a nuclear power program with broad support from the Iranian population. The signs of "success" being cited by the administration are only the damages being caused. There has been no effect on the actual "nuclear activities" other than attempts to shield them from military attack. The result of sanction failure in this case will either be war or Iran resorting to creating a nuclear deterrent which we will have to accept.

The sanctions policy simply isn't worth the risk. We should just aim for the best monitoring agreement we can get and allow Iran to go forward with their nuclear power program including low level enrichment.

The last best hope for freedom in the United States

2011-12-15T07:27:00.000-08:00

It now appears to be a done deal, President Obama will sign the 2012 National Defense Authorization Act (NDAA) which in all but name officially establishes martial law in the United States.

This tragedy directly results from the failure to properly repudiate the demagogic falsehood that the nation is "at war" with terrorism. So now even the homeland is legally a "battlefield" in the so-called "Global War on Terror", (that particular terminology having fallen from favor even as the logic of it became established as political dogma).

Of all the politicians aspiring to be elected, or re-elected, President only Rep. Ron Paul retains the belief that the Constitution, including the habeas corpus clause and the Bill of Rights, remains the supreme law of the land. Electing him President appears to be the last best hope of freedom loving Americans.

Martial Law to become offical in all but name

2011-12-01T09:44:00.000-08:00

Corporate media is once again failing us by largely ignoring a significant new war on terror related advance in the development of the American police state.

The Senate Armed Services Committee behind closed doors, approved an amendment offered by Senators Carl Levin (D-Mich.) and John McCain (R-Ariz.) to the National Defense Authorization Act the stated purpose of which was to declare everywhere in the world, including within the United States, the "battlefield" of the war on terror and, therefore, subject to the use of military force as specified in the Authorization for Use of Military Force. Without calling it such, the Levin-McCain provision effectively establishes martial law. What has already been held, however wrongly, to be lawful for capture and treatment of detainees abroad, including US citizens, under the AUMF would then also be explicitly authorized at home. This includes indefinite detention of anyone simply accused, without judicial review, of support of terror. It potentially also includes Bush-Cheney style "enhanced interrogations" if the president so decides since it is only current Obama Administration policy, not new legislation or court rulings, that forbids their resumption. (Of course they were really illegal all along but it is hard to hold a "wartime" president to the law as long as war hysteria prevails in Congress and among many in the public).

There was one important article in the WaPo authored by Senator Mark Udall (D-Colo.) who was offering an amendment to strike the Levin-McCain provision, replacing it with a call for further study. but even that was disheartening in its non-prominent placement, weak commenting response, lack of related news and commentary and even its content. It appears that Senator Udall is less concerned with the assertion of government power to violate Constitutional protections than that the provision would be administratively burdensome. I doubt, however, that the weakness of his argument was the reason his amendment was voted down on a lopsided 60-38 vote.

The police state has political momentum driving its accelerating development. Most in Congress want to be firmly in line with the trend if not in the forefront. Special interests have grown that benefit from it, past over-heated rhetoric resists being retracted and fear of being denounced as unpatriotic, even as a traitor, for objecting to it prevails. Indeed, this latest atrocity largely codifies powers already claimed under some interpretations of current law such as the "Patriot" Act. We are most likely on one of those slippery slope slides that cannot be halted before reaching the bottom.

UPDATE: Thanks to a veto threat, the mainstream media has begun to pay more attention to the Levin-McCain addition to the Defense funding bill, but not because of its assertion of power to violate our constitutional rights. No, its because it has become a government insider process story with the Whitehouse and Congress squabbling over the division of that power between them.

What we are looking at now

2011-11-03T01:26:00.000-07:00

After the real estate and financial bubbles burst in 2008 there was an awful lot of denial, mainly by politicians and pundits but even among many government, business and academic economists who should have known better. (Of course, there were a few who even saw the catastrophe coming, but they were routinely dismissed). The truth all along has been that there was no easy way out from the Great Recession. Serious mistakes were made and somebody would have to pay, the only real question being who.

Government policy, monetary and fiscal, is basically up against the logic of the "misery index". For being quite crude the MI is remarkably effective at measuring the over all health of the economy. Invented in the 70s by economist Arthur Okun, it is calculated by simply adding the unemployment rate to the inflation rate. It tells us that there are basically three tracks the economy can follow after a crash, all bad, and government can pretty much choose its poison.

One track is to do little or no stimulus and let the economy fall to the very bottom with very high unemployment and liquidation of debt through defaults, business failures and bankruptcies. This course may seem to have little to recommend itself but savers would benefit from deflation and capital would be find its way most efficiently to new allocations. This leads, eventually, to the soundest recovery, (if insurrection doesn't happen first).

Another track is that of hyperinflation through very high levels of fiscal and monetary stimulus. This course also features rapid debt reduction but this time by devaluation rather than default. Savers are severely punished but more businesses stay afloat, consumer spending is stimulated and unemployment falls. This sets up the next bubble.

The third way is "stagflation", a middle course designed to avoid the worst extremes, but only the worst extremes, of the other options. Debt reduction is slow with minimal defaults, favoring creditors. This comes at the cost of delaying eventual recovery and there is some permanent residual weakness due to prolonged unemployment. It is what we are looking at now.

Israeli attack on Iran coming soon.

2011-10-29T06:39:00.000-07:00

Reported in the Washington Times: "Israeli prisoner swap may be prelude to attack on Iran".

[Defense Secretary Leon Panetta's] main mission was to pass on a warning from President Obama against any unilateral attack on Iran.

Which would have more logically come from the State Department than the Pentagon. The presumably "leaked" claim that this was a warning is likely just cover for the Obama Administration in case an Israeli attack has, as is likely, disastrous consequences while Sec. Def. Pannetta passes along military advice -- especially about how Israeli planes can avoid awkward contacts with US air power on their way to the target areas.

Obama hopes to benefit from after the fact vocal support for a popular military move against Iran at no political risk to himself or military risk to US forces. It will be like Libya only better

Note: After the above was posted as a comment to the Washington Times article cited it was removed about a minute later. I have apparently made what the Washington Times takes to be a politically incorrect statement.

The greater evil

2011-10-10T05:59:00.000-07:00

I can't agree with the idea that for progressives Obama is clearly the lesser evil compared to any prospective Republican presidential candidate. An Obama reelection victory would help to set more firmly within the entire Democratic Party attitudes of weak opposition to tacit agreement with many of the worst Republican policies. It better serves the hopes for a rejuvenated Democratic Party, a more accountable Republican Party and a constructive two party dialog for Obama, and the betrayals he stands for, to be defeated.

A China Syndrome for the patent system

2011-10-02T05:26:00.000-07:00

Noted at the Washington Post:

The Chinese have learned to play the same games that American tech companies and patent trolls do: Use patents to extort licensing fees from other industry players.

Now that it is becoming an international issue perhaps some serious thought will be given to real patent reform -- not just the minor technical tweaks in the recently enacted Patent Reform Act of 2011.

By its basic nature, knowledge resists monopolization so it is unsurprising that the contrary to nature patent system has perverse unintended consequences. While I seriously believe the world would be better off without patents, a good step in the right direction would be to greatly shorten their duration -- which, like that of copyright, is excessive. At the very least, observing the effects of term reduction could provide a helpful empirical check on the supposed value of patents in promoting innovation.

Neutrinos not likely faster than light.

2011-09-24T05:09:00.000-07:00

It is recently very widely reported in popular media that scientists in Italy, (the OPERA experiment under Gran Sasso mountain), have detected neutrinos traveling slightly faster than the speed of light.

Reportedly, GPS — with much adjusting for various effects and uncertainties — was used to determine the distance from source to detector. I am wondering how they allowed for differences in elevation. What does GPS say about elevation? Any measure of elevation ought not be relative to nominal “sea level”, as that varies by latitude, but relative to the center of the earth, basically defining a precise triangle from center of earth, source and detector. Besides just the geometry, there is a small time dilation effect associated with differing depth within the earth’s gravity well.

I wish I had the time and expertise to plow through the details myself but, as a dilettante, all I can manage is to put on record my guess where the error might be — along with my very firm, (almost absolute), conviction that there must be an error. There is simply too much that is well explained by relativity as it stands.

Down with the USD

2011-09-05T09:25:00.000-07:00

In "An Inquiry into the Nature and Causes of the Wealth of Nations", the metaphor of the "invisible hand", (Book IV, Chapter II), was not the general purpose endorsement of free markets commonly supposed but only part of a commentary on the advantages of home trade over foreign trade. It was particularly pointed out that merchant/manufacturers hired local labor as an side effect of their reluctance to let the substance of their investment be far out of their sight. This was the "invisible hand" that worked to the unintended benefit of domestic workers -- and that commentary was within a broader argument against artificial barriers to the importation of foreign goods.

Rather than throw out the "Wealth of Nations" anti-mercantilist arguments, economists and policy makers are looking for new, more or less natural, advantages for domestic production to substitute for the costs and risks in the transportation and communication technologies that did the job in Smith's day. For a time, including most of the 20th century, US manufacturing had the advantages of a better educated, more honest and reliable workforce and a more extensive and better quality infrastructure than potential competitors. These advantages have faded as other countries developed. It is hard to see where any new advantage can come from. One good prospect lies in losing the status of the US dollar as the world's reserve currency. It causes our currency to be overvalued, making imports cheap and penalizing exports. We should probably be assisting, not resisting, efforts already in progress by others to find replacements for the USD

Sarah Palin condemns crony capitalism.

2011-09-04T07:23:00.000-07:00

Yesterday Sarah Palin condemned crony capitalism and was, apparently, cheered for it by her audience of supporters. This could be a sign that the Tea Party is beginning to realize that its ranting about "socialism" has been misdirected. Yes, there is a bit of socialism here and there in the US economy and in government policies, but it is really rather minor, not significantly more than it has been for decades and not a root cause of the Great Recession. That's much more due to government doing favors for selected business sectors such as housing and finance and carelessness about such matters as moral hazard, market distortion and fiduciary irresponsibility. Government spending through excessive use of credit, and encouraging the same by households, was also an underlying cause. This has little to do with "socialism" in any proper meaning of the term.

I prefer the shorter, simpler term "corporatism", especially as cronyism is not always a part of it, but "crony capitalism" definitely comes much closer to identification of the disease than "socialism".

Context for further thoughts

2011-09-03T08:46:00.000-07:00

Not to belabor the obvious but it appears that major cultural changes are in the works. It started with the 9/11 terror attacks and a surge of militarism in response and has continued with the electoral successes of generally right of center candidates and parties, here and in Europe, the ideologies of which are less that of Burkean or even Thatcher-Reagan conservatism but more a combination of populist nativism with some racism and elitism. Recently there seems to be developing a reaction with left, libertarian, and ideologically not classified, arguments becoming better reasoned and more confidently asserted. This seems to be mainly the result of contention over the causes of and prospective cures for the "Great Recession" and dissatisfaction on all sides with the responses of government.

This is admittedly vague and more intuitive than analytical on my part but I wanted to make note of it now anyhow just to set a context for further thoughts.

A defence of copyright

2011-08-23T05:17:00.000-07:00

I would like to take a moment to credit Jamie Zawinski with a cogent argument that acknowledges the fallacy of so-called "intellectual property" yet plausibly justifies copyright as a matter of contract law. It would have to be one of those "social contracts" that as individuals we don't get to consent to or opt out of but with reference to the social nature of human beings it may fit within a reasonable interpretation of natural law. I'll be thinking about it.

The Fed "oops" we can see coming

2011-08-23T05:05:00.000-07:00

Congress and the administration have basically emerged from the debt ceiling battle mutually hamstrung so far as doing anything about the economy goes -- not that they were showing much promise anyhow. Fed Chairman Bernanke knows that only the Fed can prevent the Great Recession from lasting a decade or more. I think he also knows that low interest rates or more "quantitative easing" is just string pushing. It does not reach enough into the problem of demand killing excessive household, (and for that matter government), debt. A secondary, but also important, problem is the job killing unfavorable balance of trade. Realistically, the only answer will be inflating the debts away while simultaneously weakening the foreign exchange value of the dollar thereby making American made products more competitive both for export and domestic consumption. High inflation is hard on savers and folks on fixed incomes, but the economy wasn't going get bailed out without somebody paying a price. Politically, it probably doesn't hurt that one of the big losers would be the Chinese government. Moreover, Chairman Bernanke would be the last to try to take it out instead from the hides of the Wall Street speculators largely responsible for the Great Recession in the first place even if he could, which he mostly can't. So he will talk about slack and output gaps and temporary factors while pumping up the money supply like a blimp. Then when inflation surges out of control he will say basically "Oops, didn't quite see that coming".

Can we stop beating up on Ronald Reagan please?

2011-08-09T11:38:00.000-07:00

I believe the railing against "Reaganomics" is much overdone. While a determined search can find the seeds of subsequent malpractice in them, President Reagan's economic policies were not bad for the times. I am certain that Reagan would be strongly critical of much of what has been done by Republican's in his name since the start of the current millennium -- as have most of his surviving advisers including his former budget director David Stockman, his former Assistant Secretary of the Treasury Paul Craig Roberts and his domestic policy adviser Bruce Bartlett.

What has driven economic policy into harebrained recklessness was not precedents set by the Reaganites, or even other politicians, but the short-sighted and corrupt influence of commercial corporate interests, especially in the bloated financial sector and the powerful military industrial complex.

The automatic cuts -- new hostages

2011-08-04T09:43:00.000-07:00

Do Democrats think they can finally win a round in the fight over the Bush tax cuts by adapting for themselves the hostage taking tactic used against them by the Tea Party Republicans? Apparently they do. Here, according to a Reuters report, is the plan:

Democrats say they will use the threat of automatic defense cuts to prod Republicans to accept tax increases as part of the $1.5 trillion debt-reduction deal -- or charge they would rather protect the rich than the military.

"In the coming months, our Republican colleagues will be given the following test: Will they choose to protect special- interest tax breaks over investments necessary to keep our nation strong and secure?," said Representative Chris Van Hollen of Maryland, the top Democrat on the Budget Committee and former head of the party’s House campaign arm. "Let’s get on with that big national debate."

I am not sure exactly how many flaws there are in this plan but the main one is that it is being deployed against a group unlikely to surrender to hostage takers. Republicans will be more justified than they were in the case of the debt financing deadline in believing that disaster is not imminent. Military spending cuts can be endured for a time -- at least for as long as it will take them to pass a budget preserving the tax cuts and restored military spending as well. Indeed, I fully expect that they will even get some bonus boosts in the military budget to make up for whatever ground they see as having been lost through delay.

The automatic cuts in the debt limit ransom package weigh on domestic civilian spending as much as on the Pentagon and, besides, the Democrats are nearly as hawkish as the Republicans and would be highly vulnerable to charges that they are betraying the troops. The Obama Administration will be open to accusations that it is implementing the military cuts in ways that causes unnecessary damage and may be doing it purposely. How can the Democrats seriously believe they would have a superior bargaining position? Their position will actually be weaker than it was in the debt limit face off where they might have, if they weren't so pathetic, have gained an upper hand with a serious 14th amendment threat.

The "confidence fairy" (among others)

2011-08-01T17:33:00.000-07:00

Some normally sensible economists have been seeing images of
what Paul Krugman of the New York Times referred to as the "confidence fairy" in the coffee and perspiration stains recently appearing on their carpets as they sweated over the debt ceiling crisis. It may be an effect similar to that of the "Emperor's New Clothes" except in this case the nervously cheering subjects are afraid to admit to what they see lest they be accused of murdering the confidence fairy themselves. Although he is known to have had his own delusional visions of the stimulus fairy, I must give Paul credit for being a voice of truthful disillusionment in the crowd on this occasion. There is plenty of reason for pessimism.

Just today:

From Steve Goldstein at MarketWatch:

U.S. manufacturing activity barely grew in July, according to a key index released Monday in a demonstration of an economy struggling to expand ...

and just a couple days before that:

Leading economists on Friday began marking down their growth estimates for the rest of 2011 in response to data showing first-quarter growth of just 0.4% and second-quarter growth of 1.3% ...

So the economy is already showing signs of serious weakening and will not be ready to absorb the cuts in federal spending with the attendant cuts in agency and contractor payrolls. When there is a new 1937-like relapse there may be some unanticipated shock(s) cited as the cause -- but, really, something is always going wrong and hopes for a properly healthy recovery can't be trusted to the good luck of there being less of that than usual. At least one likely source of "unanticipated" trouble would be the climate change fairy. While firmly disbelieved in by many Tea Partyers, there are hints that this one is actually real enough to cause economic harm. Here's another item from MarketWatch:

Allstate swings to loss as catastrophe claims soar
...
Allstate Corp. (NYSE:ALL) swung to a second-quarter loss of $620 million on the company's worst quarter for catastrophe claims since Hurricane Katrina struck the Gulf Coast in 2005. Devastating tornadoes across the Midwest and South contributed to $2.34 billion in disaster costs.

Getting back to the deal, just how much confidence have we gained anyhow? It certainly is a relief that we apparently won't have to see another debt-limit drama again this year -- but that is just this year and not very helpful to the kinds of longer term planning that underlies major investments in the real economy. No one knows if the "trigger" will be pulled or what its consequences would be. Should this inspire confidence?

It would be impossible to prove, and maybe this is my fairy tale, but I am pretty sure that the economy would have fared much better if the debt limit deal had not been reached and practically any one of the gimmicky unilateral executive actions proposed to bypass Congress had been used instead. That might plausibly have led to abandonment of the disfunctional debt limit law altogether.

Obama doesn't need no stinkin' badges.

2011-08-01T10:10:00.000-07:00

In Salon, Glenn Greenwald writes that "Obama's whistleblower war suffers two defeats". What this is all about is that the Obama administration, through its Justice Department, is using harassment and intimidation to deny due process and to non-legally punish alleged whistleblowers instead of pursuing honest prosecutions. This is very consistent with his defense of Bush Administration torturers, his flip-flop over granting retroactive immunity to telecommunications companies for their role in FISA violations, his Libyan bombings in disregard of the War Powers act and numerous other violations of his oath of office to faithfully execute the law.

So help me, it appears that his reputed Constitutional scholarship must have been entirely devoted to figuring out ways to defy the Constitution and undermine the rule of law.

If we're going do the coin trick then let's do it right

2011-07-31T05:08:00.000-07:00

Although it would not be my first choice, I could go along with the Treasury coin seigniorage dodge if that were the last ditch method selected by the president to avoid default. I would, however, be very disappointed if it wasn't done in an appropriate manner which, for me, would be something like this:

The image on the coin should be the hind end of a bull with a large pile on the ground near its feet. It could be officially known as the "Best Solution", or "BS", coin. On the other side could be an image of W. C. Fields inscribed with one of his wisest sayings: "The time has come to grab the bull by the tail and face the situation".

The actual coin(s) should be kept under extra heavy guard at Fort Knox. However, non-legal but visually perfect replicas should be put on public display at the Smithsonian and, if Congress will allow it, the Capitol Rotunda.

* * *

While I'm at it, I will take this opportunity to explain why the coin seigniorage trick isn't my first choice. It preempts the Federal Reserve's authority, properly assigned to it by Congress, to control the money supply. While the Fed can, as defenders of the coin trick point out, compensate for what the Treasury mints, it shouldn't have to. We do not need two sets of officials with no legal obligation to set a single policy and not answerable to the same branch of government controlling the money supply -- especially if one of them is purposely doing it for the specific purpose of covering government debt.

On shopping for legal advice.

2011-07-30T19:24:00.000-07:00

Using the 14th Amendment in a kind of blunt-force way to, in effect, declare the debt limit law null and void and to resume issuance of new Treasury debt is not what I have been suggesting. Although President Clinton and some Senators who, I expect, are also law school graduates, are saying it would be proper, I don't think it is legally sound. However, I am annoyed that President Obama, of all people, agrees with me rather than them. "I have talked to my lawyers," he said with respect to this idea. "They are not persuaded that that is a winning argument."

Now just a hypocrisy-picking minute.

When he wanted to continue bombing Libya beyond the war powers act grace period and failed to get approval from either the Pentagon general counsel or the acting head of the Justice Departent's Office of Legal Counsel he found a compliant lawyer in the State Department willing to justify his wishes with a novel legal theory of non-hostile bombing.

Now we are to believe he won't resort to a last ditch measure to avoid global economic catastrophe because he is such a strict by the book abider of the law? Who does the president think he is kidding?

Meanwhile

2011-07-29T13:06:00.000-07:00

The development of an American police state continues apace.

US uses debt crisis to cover-up drawing spying rules

House panel approves broadened ISP snooping bill

US cannot say how many had communications watched

No good crisis should go to waste.

The point now tipping.

2011-07-29T12:48:00.000-07:00

I never thought the economy properly recovered from the 2008 crash but what will be popularly called a "double dip" and officially classified as technically another recession, (too far past the earlier official recession's end to count as related to it although it really is), will be seen as starting about now with the debt-ceiling crisis a designated "tipping point". Although it was going to happen anyhow it might have waited until as late as next year. I previously guessed that it would be seen as starting with a weak Christmas buying season this year -- but the dating of it is largely arbitrary and ultimately of no great importance except as it might play into eventual political talking points.

The inevitability of it has to do with far too little being done to help deeply indebted households and to create work for the unemployed and with the lack of serious structural reforms addressing what led to the 2008 bubble burst in the first place.

The stock market has been in a purposely engineered by the Fed bubble to replace the burst real estate bubble. The unrealistic hope is that the "wealth effect" among the wealthy will somehow spur economic recovery despite the continued misery of ordinary household savers, (because of low interest rates), and debtors, (because of high indebtedness). The debt ceiling crisis could be the pin to puncture the equities bubble because traders with enormous leveraged positions are threatened by a downgrade of "risk free" Treasuries used as collateral. They will react by de-leveraging, selling stocks and buying more Treasuries to use as extra collateral as an offset to the downgrade risk.

The president's plan for avoiding default

2011-07-23T13:52:00.000-07:00

"The president wanted to know that there was a plan for preventing national default" -- Republican Senate Leader Mitch McConnell.

Given that House Republicans seem to have a plan for causing a default rather than preventing it, the president needs to have his own default prevention plan. Here is what I would suggest:

Where it is not actually illegal for late payments to be made, the Treasury should delay payments to suppliers and contractors. Publicly asking them for forbearance would be decent and honorable and not, in my opinion, a solicitation of credit in violation of the debt limit act. He should not cancel orders made for authorized expenditures. Those remain legal requirements that the president is bound to respect.

In the case of other payments such as Social Security, veteran's pensions and federal employee payrolls as well as payments on Treasury issued debt I do not believe the president has any legal authority for delay and must make such payments as they come due and to the extent they can be covered by available funds. I would advise him to NOT attempt to avoid payroll payments authorized by law through layoffs or furloughs. That might be legal but it would be against the best interests of the government and the nation and I do not believe these are actions he is specifically required to take. If I am wrong about that, then he should do it only to the minimum extent legally required.

If on any day checks for all the payments described above are issued and some balance, however small, remains then there must be at least one government creditor, contractor or beneficiary that can be and, by law, must be at least partially paid. The lack of authority to further prioritize payments would actually require the Treasury to issue checks for all of them.

Besides this argument, the president can, and should, defend his actions by pleading the 14th:

"I respectfully decline to default on the grounds that it would put into question the validity of the debt of the United States."

He should do this less to supply justification for his own actions than for that which is yet to come.

The checks would, in due course, be presented for deposit at the Federal Reserve Bank which, incidentally, is a creature of Congress -- not a part of the Executive Branch. It would then be the choice of the Fed to either accept the deposit to the credit of the member bank presenting it or refuse the deposit putting itself in likely violation of the 14th Amendment. I believe it would have to honor the Treasury's overdraft. This points up how, by its nature, the default decision really belongs with the Fed, not the Treasury. If Congress objects then its argument is with the Fed and, in effect, with itself. The president has done all he could, acted in the best interests of the republic, covered himself, and is now out of it.

Note: The above, originally dated July 23, has as of July 30 been tweaked and clarified while remaining unchanged in basic substance .

/***** UPDATE *****/

The blogs are alive with discussion of an idea credited to to blogger "beowulf" that the debt ceiling could be side-steped by Treasury coin seignorage. In most of these commentaries, (although not in beowulf's original blog post), there appears the assertion "In this connection, the Treasury is prohibited from having an overdraft in its TGA at the Federal Reserve Bank.", overwhelmingly in just those words and with the same bold type emphasis. There seems to be a lot of cutting and pasting going on. What I can't find is any reference to the actual law prohibiting such an overdraft. The closest to it that I could find was in THIS document a statement that "Treasury seeks to maintain a balance in the TGA large enough to protect against an overdraft and attempts to keep the balance stable to avoid interfering with the Federal Reserve's monetary policy.", although at another point it states that the Fed is "not authorized" to lend directly to the Treasury, (but doesn't quite say it is prohibited).

/***** Another update *****/
In my continuing research I have found the Federal Reserve Act Section 13. Powers of Federal Reserve Banks 1. "Receipt of Deposits and Collections". It authorizes any Federal reserve bank to accept for deposit various financial instruments from various sources including drafts from the United States; i.e., the US Treasury. It specifies that deposits from a "nonmember bank or trust company or other depository institution" are acceptable only if such depositor maintains an account with the bank with a balance to be determined by the Federal Reserve Board. It omits to make that requirement in the case of the "United States" -- and even if a balance requirement were assumed to apply anyhow, its amount is up to the discretion of the Board. IANAL but it appears to me that the Board has more than enough gray area wiggle room to allow Treasury overdrafts.

An article by Robin Harding at Financial Times claims that a Treasury overdraft at the Fed would violate Section 14 of the Federal Reserve Act. However, that section makes no mention whatsoever of overdrafts by the Treasury. What it does specify, to state it simply, is that the Fed may not buy new US government debt but only old debt on the open market. This, I believe, is broadly interpreted as meaning that the Fed cannot extend credit in any form to the Treasury. However, I read it as applicable to securities transactions only, not overdrafts. Is this the best that those claiming the Fed cannot legally permit an overdraft can cite?

More discussion elsewhere:
Some Democrats In CONgress ...
Can The Treasury Department Really Run Out of Money?
3 ways Obama could bypass Congress
Can Treasury just go overdrawn at the Fed?
Overdrafting at the Fed
Rajiv Sethi: Some Thoughts on the Unthinkable:

"Chained" CPI calculation inappropriate

2011-07-20T09:02:00.000-07:00

From a WaPo Editorial Board opinion:

A more accurate measure would be used to calculate cost-of-living increases for Social Security and other programs and to adjust tax brackets.

The idea of a switch to a "chained" CPI, according to a commonly cited example, is that if consumers switch from expensive apples to cheap pears their cost of living may have actually gone down instead of up.

Those who have read the Pearl Buck historically based novel, "The Good Earth", may recall that desperately poor Chinese peasants ate dirt out of unsatisfied hunger. Under a "chained" CPI calculation, if one had been made in those times, "food" in China would have been literally dirt cheap.

Some adjustments to the CPI "market basket" need to be and have been made to reflect the changing composition and quality characteristics of goods offered. The current proposal, however, achieves savings by purposely not accounting for forced reductions in the consumer's quality of life.

I would suggest to our right of center advocates of free markets in particular that "savings" achieved by the sacrifice and enterprise of careful shoppers are no less deserved than the rewards earned by investors though their business acumen and deferred gratification and should not be made to count against them.

A balanced budget amendment

2011-07-19T07:31:00.000-07:00

A balanced budget amendment, certainly if anything like those that have been proposed, is a very bad idea. The current problem is that, because of the irresponsibility of the politicians, mainly those in Congress, the federal government is not in intelligent control of its budget. The proposed amendments would only substitute a different lack of intelligent control for the present kind -- except that as a part of the Constitution it would be an even harder problem to fix.

Should we really insist upon an amendment that promotes a balanced budget anyhow then it should provide that:

In the year following any year in which the total of all expenditures by the government of the United States and all its agencies exceeds the total of all its income:

(1) No member of Congress, nor the President or Vice President, may collect any compensation from the government other than reimbursement of expenses for official business.

(2) All of their other income shall be taxed at a rate of 90% with no deductions or exemptions of any kind.

(3) No member of Congress, nor the President or Vice President shall be eligible for reelection in that year.

However, this would leave unsolved, and may exacerbate, the problem of economy distorting off budget "tax expenditures" and the corruption of special interest influences that lead to them. Consequently there is a need for a fourth paragraph:

(4) The taxes collected from any person or organization may not vary by more than five percent from that determined by the primary applicable rate exclusive of deductions or exemptions.

This amendment is also a bad idea but I feel it is clearly far better than those that members of Congress have been willing to propose. I do not claim this as a product of personal brilliance. It was actually a pretty simple-minded exercise. That it is an improvement over those other proposals was made possible only because the Congressional amendment proposers are a pack of dangerous morons.

Trade Adjustment Assistance program, (TAA)

2011-07-17T07:35:00.000-07:00

The Trade Adjustment Assistance program, (TAA), is basically a relief and retraining program for workers who have lost their jobs for reasons traceable to foreign competition. It is implicitly an admission that trade liberalization has cost US workers jobs and that government owes something to those workers in compensation.

The conservative Heritage Foundation has been advocating letting TAA expire. Part of their case is a statistic that of all recent mass layoffs, (50 or more jobs), only about 1 percent is attributable to foreign competition. This neglects to count, as does TAA itself, loses by smaller firms which may not even have 50 employees to begin with and cases where firms are unable, or disinclined, to document that layoffs are due to foreign competition. Moreover, the major part of jobs lost is probably in the form new jobs created overseas rather than here.

Slightly better is the objection that the retraining is mostly ineffective. The foundation is able to cite studies showing that there is no improvement in the wage level of post-training replacement jobs over those that were lost, although the trainees do enjoy about a 10.2% advantage in their reemployment rate.

The foundation argues that "The government should not discriminate between workers who lose their jobs because of trade and workers who lose their jobs for other reasons." but then a bit inconsistently objects to a TAA benefit extending health coverage to retirees from bankrupt companies even if the bankruptcy has nothing, (provable), to do with trade.

Taken on the whole, the Heritage Foundation arguments are weak and mean-spirited. While trade liberalization is desirable long term it would be very justified to put new trade agreements on hold pending more favorable economic conditions and to meanwhile continue to compensate workers displaced from their jobs by agreements which have already been put in place too quickly and, with the small exception of TAA, carelessly.

http://www.heritage.org/research/reports/2011/02/c...
http://www.heritage.org/Research/Reports/2011/02/T...

Don't really know what rates would do right after a default

2011-07-16T10:02:00.000-07:00

If there is a default and interest rates fail to spike up we can expect to hear those who have been discounting the effects of default saying they told us so. However, the likelihood is that any such failure of rates to rise would be due to the prospects for another sharp down-leg in the Great Recession, (which I, as others, do not consider to have truly ended). Once a new bottom was found, interest rates would be higher than they would have been in the absence of a default and would weaken and slow the eventual recovery.

Our role in Afganistan

2011-07-16T09:14:00.000-07:00

We might very well have negotiated a satisfactory arrangement with the Taliban government with respect to terrorist organizations such as Al Qaeda taking shelter in Afghanistan had such an attempt been made. How hard could it have really been to convince any Afghan government, even the Taliban, that association with terrorists was against their own interests? To me that is comparable to persuading even an ardent animal lover that rattle-snakes don't make good pets.

The invasion was really more of an attempt to gain a client state for the empire than a sincere counter-terrorism exercise. Our subsequent efforts to guide Afghanistan to adopt institutions more compatible with our own lacks awareness of the weak support for that in current Afghan culture and is fraught with the danger for good intentions to go awry. We would still be better guided even now to focus mainly on the narrow objective of pushing the Afghans to reject hospitality to terrorists while observing throughout the precautionary principle to first of all to do no harm.

The so-called "two party system"

2011-07-16T07:55:00.000-07:00

The so-called "two party system" has no foundation in the Constitution. I wouldn't count freedom of assembly to petition the government as that is different from organizing within the government in order to run it. I wish party caucuses in Congress and state government run primary elections for parties and every other governmental arrangement in support of these troublesome institutions would be abolished. They are no more a legitimate part of government itself than a private think-tank or news media company would be. The political parties should be made to do all their organizing and agitating strictly outside of government and without any taxpayer support.

Raising taxes and cutting spending

2011-07-15T14:23:00.000-07:00

I hate to sound like a doctrinaire Keynesian, which I am not, but the truth is that the economy does not suffer from a shortage of wealthy individuals and prosperous corporations able to invest in production and hire workers. It suffers from weak consumer demand due to high levels of unemployment and household debt. While reducing the government's deficits, if not its debt, is very desirable in itself, doing it entirely, or even nearly so, with spending cuts, exacerbates the inadequate demand problem. To some extent, I fear to a large extent, it will prove to be self defeating by adding to unemployment and reducing the government's tax revenues. The Fed will attempt to compensate by putting even more funds in the hands of well to do institutions and individuals, (who else did you think gets it when the Fed creates more money?), but as long as demand is weak that will be "pushing on a string" so far as the real economy goes. It will instead fuel speculation in assets of some kind or another risking "cost push" inflation -- the kind that can happen even with weak demand and a "production gap".

A good hedge against these problems would be to make new taxes on the wealthy a significant part of the deficit reduction effort. Although some of them may be too short-sighted to see it, the very wealthy will benefit enough from a healthier economy that the new taxes they are asked to pay in the near term will in the longer term turn out to be among their best investments.

Now and in the future, raising taxes and cutting spending need to be on a reasonably equal footing as policy options in addressing government debt.

What is needed in the McConnell proposal.

2011-07-13T13:22:00.001-07:00

The media and blogs are abuzz today over the proposal of Senate Minority Leader Mitch McConnell that would give the president limited authority to raise the debt ceiling on his own. I almost missed noticing this detail reported in the WaPo:

Under the proposal, Congress would change the rules surrounding the debt limit for the remainder of Obama’s first term.

I believe the McConnell idea is workable and certainly better than deadlock and default -- but Obama should accept it only on condition that it is a permanent change in the law. Only then can it be construed as a step forward for better fiscal management. Otherwise it is exposed as merely a cynical tactic for near term partisan political advantage.

Why it's a "hard slog"

2011-07-13T11:00:00.000-07:00

Past director of the Office of Management and Budget in the Obama administration Peter Orszag points out, (without explaining why), that: "Recoveries following financial collapses tend to be frailer than those associated with other sorts of economic declines." and so predicts much more of "Hard Slog" than shows up in conventional projections.

When there is a financial collapse the financial institutions and their well to do clients and employees successfully argue that their own recovery is the critical precondition to a broader economic recovery. Monetary stimulus, by its nature, normally benefits them first in any case. Fiscal stimulus in the forms of bailouts, rule relaxations and tax benefits, however, work powerfully to put the interests of Wall Street ahead of Main Street. This sector gains disproportionately while the real economy languishes. I am personally convinced that the broad economy would have been much better served by bankruptcies and liquidations of the supposedly "too big to fail" institutions. That by itself would not have directly helped main Street businesses but they were not being helped anyhow. They would have in time benefited by the creation of smaller financial institutions more responsive to their needs.

One of several valid ways to diagnose macroeconomic problems is to cast them all as essentially problems of misallocated resources. The pre-bubble economy suffered from grossly excessive allocation of resources to the financial sector. We have largely missed the opportunities to correct that misallocation, as typically happens in the case of financial crashes, and that is why recoveries of this type are such a hard slog.

"We did a pretty good job of fixing bank balance sheets, but I think that household balance sheets are the ones that have suffered the most," said Mark Thoma, a professor of economics at the University of Oregon. "We could have done much more to help households."

The funds of August

2011-07-13T07:14:00.000-07:00

In various media and blogs much has been made of a Bipartisan Policy Center (BPC) study that projects there will be $172 billion in federal revenues in August against $307 billion in authorized expenditures. The $172 billion is supposedly enough for debt payments, Social Security and more -- problem for those accounts, at least, supposedly solved. However, this does not account for the timing of the August cash flows. If the incoming funds arrive mostly late in August there may not be enough to avoid defaults early in August.

Update, July 14:
"Powell’s [Jay Powell, undersecretary of the Treasury for Finance under President George H.W. Bush] research also shows that the daily cash-flow outlook would be just as difficult [as the over all monthly shortage] to manage. For example, if the cash shortage begins on Aug. 3, as projected by Treasury, the government may find itself unable to make a $23 billion Social Security payment due to go out that day." (LINK)

Banksters

2011-07-07T18:38:00.000-07:00

Thanks to the New York Times we now know why there have been conspicuously few prosecutions of bankers for their roles in the real estate finance bubble. Prosecutors are relying on the bankers to investigate themselves.

What a country!

The debt limit "Constitutional question"

2011-07-07T06:40:00.000-07:00

If it does come down to a "Constitutional question" Obama will almost certainly get to choose the answer since the Supreme Court will not likely accept that anyone has standing to sue except Congress acting under a joint resolution. Senate Democrats will be predisposed to support the president and even some Republicans would rather not risk making Obama's solution a binding legal precedent.

The text of the debt limit law, "31 USC 3101" is slightly complicated by having to define the amount of debt represented by Treasury securities that can be optionally redeemed before maturity but, in general, it requires that the total amount of Treasury debt outstanding at one time not exceed the specified amount.

Two observations:

(1) Obligations other than Treasury debt are not specifically addressed. How the 14th Amendment may apply to those payments is not clear. Obama might choose to interpret otherwise but I think it probably it does NOT allow payment in the absence of sufficient revenue or borrowed funds. It only requires payment on actual debt; i.e., Treasury securities, despite the debt limit.

(2) Debt that is retired either by incoming revenue or otherwise under the 14th Amendment can be replaced by new issues without violating the debt limit law so long as the total remains under the limit.

The 14th Amendment can solve the debt limit default crisis

2011-07-02T15:58:00.000-07:00

According to Senator Chuck Schumer (D-NY), there has been private discussion of the possibility that section 4 of the 14th Amendment authorizes the President to avoid default on the government's debt in the absence of Congressional legislation to raise the debt limit. However, "It's worth exploring next time around," Schumer said. "But it hasn't been examined enough to deploy it this time."

I believe it would be wise, however, to "deploy" this idea as a more openly discussed possibility sooner rather than later to reduce financial markets anxiety and to be prepared for its actual application in the event it becomes necessary.

One problem that may be holding Sen. Schumer back is that he seems to expect the Amendment to be taken as authorization for the President to issue new debt in order to roll over the old -- and I would agree that that proposition is problematic. It is not clear that the Amendment authorizes the issuance of new debt. The sounder idea, I propose, would be to issue no new debt but to simply make scheduled debt payments by Treasury issued checks, justifying check overdrafting as being required by the 14th Amendment.

These checks would be honored by banks U.S. and foreign if they knew they would be honored when presented, in turn, to the Federal Reserve Bank. The Fed would have no choice, however, but to do so.

In the first place, the Fed as much as the President is required to uphold the Constitution. It would violate the 14th Amendment for the Fed to put in question the validity of the government's debt by refusing payments.

Secondly, it would be a global financial disaster if it refused.

Furthermore, incoming funds would be available to pay some of the debt payment checks but the Fed would have no fair way to decide which payments would be so covered and which would not. It might choose to not formally pay and collect at first only on the debt it holds itself, deeming the rest to be covered, but after that it would have to pay on it all.

Finally, extinguishing the government's debt by paying off on it with created funds is what the Fed has already been doing anyhow with "QE1" and "QE2"-- the only operational difference is that it would be paying as the debt came due instead of buying it in ahead of time.

What I am suggesting does not completely avoid a government "shutdown" since new funds above the debt limit are not borrowed to keep programs going. However, debt paid off at the Fed would permit issuing of replacement debt still under the debt limit. The procedure I am suggesting is only a way to avoid defaulting on already issued debt and to help maintain some minimal government services. The government is in too much debt. My suggestion does not solve the debt crisis -- only the default aspect of the debt limit crisis.

UPDATE: David Frum at CNN does a fine job of explaining how the President has negotiated like a chump -- and goes on to explain the "new debt issue" problem with using the 14th Amendment. Obviously he didn't read my post.

Gaddafi threatens attacks on Europe

2011-07-02T06:39:00.000-07:00

Gaddafi threatens attacks on Europe
By Ernesto Londono, Published: July 1

TRIPOLI, Libya — Libyan leader Moammar Gaddafi on Friday threatened to attack Europe if NATO continued bombing his country.

In a recorded message broadcast to a large crowd gathered in Tripoli’s central square, Gaddafi said that Libyans would “target your homes, offices, families, which would become legitimate targets.”

As a long time head of a wealthy oil state and past supporter of terrorism, Gaddafi has the kind of resources that make his threats credible. I am surprised -- or maybe not really surprised but only dismayed -- at the foolish bravado of the "bring it on" chest-thumpers. Of course, they are but the chorus to the lead actors in government that were in so great a rush to indict the man for war crimes before he could be safely captured, (if not killed), that they had to make their grandstanding point nevermind the risks. Doesn't anyone, here or in Europe, worry about consequences anymore?

The economy needs new ideas.

2011-06-30T16:57:00.000-07:00

The hard part about new economic ideas to fit the current problems isn't thinking them up -- it's getting them accepted. The monetarists, Keynesians and supply-siders would all denounce them as crazy and have all kinds of reasons for why they couldn't work and shouldn't be tried -- and those objections would be loudly seconded by the various special interests that benefit from the way things are even as most everyone else suffers.

As one small relatively simple example of what I mean, (not by itself a magic cure), the joke idea of printing money and throwing it out from helicopters would actually be much more effective than the Fed practice of feeding new money to the zombie banking system. Of course, the ideologically commited economists and politicians, largely in the pay of the entrenched plutocracy, would be horrified at the suggestion that the "joke" might be taken seriously -- and just imagine what the bankers would have to say about it.

The Afghanistan troop withdraws

2011-06-23T05:26:00.001-07:00

The number announced, 33,000, is more than I was expecting but it is heavily back-loaded into late next year. Withdraws for this year are about as minimal as I expected. I am not counting the chickens before they hatch. There is plenty of potential for the withdraw schedule to slip due to "changing circumstances" -- although fresh evidence that the war goes poorly would be better interpreted as a reason to speed up the drawdown than for slowing it.

The future of the Afghanistan war

2011-06-20T17:23:00.000-07:00

On this date it is being reported that President Obama is "finalizing" his plans for the promised drawdown of troops in Afghanistan.

I'll hazard some predictions:

First of all, the best decision would be to simply get out as quickly as good order permits, but it isn't going to happen. This is the easy prediction.

The withdraws will be gradual, about in line with what SecDef Gates and Gen. Petreaus can tolerate although Petreaus especially will let it be known he would prefer to put off withdraws altogether until the end of the summer fighting season, (and then review the situation again).

By this time next year the military will be reporting that the "fragile gains" have, in fact, been lost, although it was never clear what the gains were to being with.

Obama will then agree to another surge.

The truth is that there was never and could never have been enough troops to successfully execute the general's grand COIN strategy -- Afghanistan is simply too tough a situation. Obama, however, will take the blame for not sending in enough troops and keeping them there.

Politcal economist Martin Feldstein

2011-06-08T10:04:00.000-07:00

Martin Feldstein is a competent and knowledgeable economist who has come too much under the spell of politics and ideology. How can I tell? When a competent and knowledgeable economist comes too much under the spell of politics and ideology his analyses make excellent sense while his prescriptions don't.

In today's WSJ Martin finds himself in ironic agreement with liberal Keynesians that the fiscal stimulus package in "both its size and structure were inadequate to offset the enormous decline in aggregate demand", and that this accounts for its weak and temporary relief. This is very true. He could also have pointed out, but did not, that the very high level of federal debt made even the fiscal stimulus that was enacted very risky, putting an even larger fiscal stimulus out of the question. Instead he concentrates on the structural problems in the package, He is on sound ground here, as well, observing that "Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending" while what we got was "... a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc." Fair enough.

But what would Mr. Feldstein have preferred? An acceleration of military spending. While military spending may, or may not, have benefits to national security it is the economic equivalent of building bridges and tearing them down again. Even worse, it diverts resources from the productive consumer economy increasing the cost, and reducing the incentive, for producing consumer goods.

Additionally, Mr. Feldstein approves of "incentive" raising tax cuts for the wealthy even as his criticizes the "inadequate" demand boosting "temporary tax cuts for lower-income taxpayers". That is a pretty good formula for subsidizing investment in emerging foreign markets where the demand will be instead of here where it won't -- not that the wealthy are actually so hard pressed that they need such incentive help.

Martin is generally correct in analyzing the failures of stimulus attempts thus far, apart from suggesting that these are only President Obama's failures and that Republicans have had nothing to do with it. However, his advice today is plainly more political than economic.

The hopeless Afghanistan war

2011-05-30T07:29:00.000-07:00

The reason the Afghanistan war, nearly a decade old, stumbles on is because it is unwinable and it is all that President Obama can do to keep from losing it on his watch. He intends to push the loss onto the next administration. If it looks like he can't hold things together there for another five years he will follow Lyndon Johnson's example and decline to run for a second term. His successor will likely be a Republican who, like Richard Nixon, will withdraw from the war under cover of some face-saving claims that the US installed government is ready to fight on its own. When that proves to be untrue is when the arguments will begin in earnest over who "lost" Afghanistan.

Dark energy

2011-05-19T19:20:00.001-07:00

I see in the news today that there is new evidence that "dark energy" is real. Here is what I think I understand about dark energy:

Since the Big Bang the universe has been expanding. Given that the Big Bang was one heck of an explosion it seems reasonable that matter is still flying outwards in all directions, but it isn't just matter -- space itself is expanding outward. (Actually it is space-time that is expanding, but including mention of time complicates what I have to say without adding anything). It is easy to understand how ordinary explosive energy propels matter about, but harder to see how it can even get a grip on space unless it is by way of the grip out going matter has on space through gravity. It seems to me now that it is not even indirectly the normal energy of the Big Bang that accounts for space expansion but the mysterious dark energy that does it. Moving matter, far from causing space expansion, is being dragged along by it and at an accelerating pace as dark energy continues to accelerate the expansion of space. As the force of dark energy works over distance to accelerate matter, as well as space, dark energy is being converted to ordinary kinetic energy. Dark energy must be a lower entropy form of energy than kinetic energy. I believe it must be the ultimate lowest possible entropy form of energy. It must be the "prime mover" of energy -- the kind that creates other kinds of energy but was itself never created from anything else. I further believe matter itself was created, in nearly equal matter-antimatter quantities, from dark energy not unlike the way the energy of a gamma ray can create an electron-positron pair. Some matter-antimatter creation from dark energy is likely still going on. This echoes somewhat the old "steady state" theory of the universe that was superceded by the Big Bang theory.

Dark energy is not a mere oddity of cosmology. Our lack of knowledge of it is a hole in our understanding of physics as fundamental as fundamental can be.

Prosecuting military, and other, torturers

2011-05-12T06:54:00.000-07:00

In today's WaPo Senator John McCain condemns torture. His remarkable achievement is to have become simultaneously the most and least credible politician to have taken that position.

Perhaps the main reason I opposed Senator McCain becoming President is that he is so steeped in military tradition that he is hardy a civilian anymore and is not able to adequately relate to the requirements of the broader civilian citizenry. His understanding of economics, for example, is very shallow and he relies upon poorly chosen economic advisers.

I believe his opposition to torture derives in large part from his perception that it is a blot on military honor. His legislative initiative to ensure that the military complied with the torture ban in the Army Field Manual left the loop hole open of not covering the CIA. The "spooks", were without honor anyhow, no doubt, so leave it to them to do the dirty work. Perhaps he has now come to realize the necessity of protecting the national honor as well.

Even now, however, he makes the common mistake of supposing that honor is preserved by sweeping dishonor under the rug. If prosecutions where warranted continue to be neglected it can only increase our national shame. The military failed in its duty to disobey illegal orders. Refusal to face up to that, Senator, can't change it. Politicized advice from DOJ lawyers, contradicting the military's own lawyers, should have been ignored but may be considered as extenuating circumstances. I do not favor harsh punishment of those in the military found guilty but in the names of rule of law and the national honor I demand honest war crime prosecutions.

It isn't happening not so much because prosecuting the actual torturers may be technically difficult but because not prosecuting them is what protects the politicians and lawyers responsible for issuing the orders.

Surreptitious iPhone and other smart phone tracking

2011-04-26T06:04:00.000-07:00

When I saw DOS superceded by Windows, (yes, I've been around that long), I knew I would have to get used to my computer doing things I didn't ask for, in many cases didn't want, and not even being told about it. Unrealized by most, it was the end of the "personal computer" which, to me, meant a computer dedicated to my work, my purposes and nobody's else.

What we have today are actually community computers -- network appendages with some responsibilities to the local user and many to other parties including computer manufacturers, software companies, (both system and application), copyright holders, law enforcement and network operators. Indeed, new responsibilities have been loaded upon users who have been transformed into conforming, non-jailbreaking "netizens".

The original PC pioneers gloried in their independence from a regime of dumb terminals, mainframes, time-share and batch processing. Now a new form of computer collectivism is taking control in its place.

Where is the Tea Party when you need it?

Microsoft (unintentionally) condemns the use of patents

2011-04-19T04:21:00.000-07:00

In a case before the U.S. Supreme Court that could make it easier for defenders in infringement lawsuits to invalidate complainant's patents Microsoft has argued that the current "clear and convincing evidence" standard impedes innovation because companies either cannot develop combinations of their own technology with the technology that has been patented improperly or must pay licensing fees that could have been spent on R&D instead. However, that effect is no different in the case of properly awarded patents therefore leading to the conclusion, if we buy Microsoft's argument, that all patents are actually harmful to innovation.

The argument is an interesting half-truth because patents have a mixed effect on innovation, simultaneously providing increased incentive and decreased opportunity for it.

What I continue to question is the assumption that whatever the actual net increase in innovation is that may actually be due to patents that it outweighs having to endure the usual costs and injustices attendant upon the existence of any governmentally protected monopoly. Innovation is not an unlimited good for which we should be prepared to pay any price. The direct cost, (setting aside indirect costs), we pay is obscured by it being packaged with the price of the goods incorporating the patented technology. Injustices occur not least because of the occasional independent co-inventors who instead of receiving a reward for their honest work are legally disenfranchised from their claims upon it.

A form of immortality

2011-03-31T06:45:00.000-07:00

I have found it helpful to understand that the past is simply the part of the 4th dimension of reality downstream from the present. It exists as fully as any other interval of time. It, including our past selves, will always be there, immutable and significant to us through effects cascading limitlessly forward in time. In that sense, at least, we are immortal and even the least notable of us of great consequence.

War in the name of "credibility"

2011-03-25T09:04:00.000-07:00

Worth noting with respect to the argument that we must occasionally slap around some two-bit dictator to maintain our credibility as a great power, (or bully):

As Christopher Fettweis shows, political scientists are nearly unanimous in finding little evidence for the proposition that the believability of threats depends on the outcome of prior threats—Thomas Schelling’s game theory notwithstanding. Daryl Press’ case studies show that when leaders, Hitler included, consider going to war in the face of deterrent threats, they focus on the balance of power and the threat-maker’s interests. It’s not that past credibility does not matter at all, but that it matters far less than other factors.

The mystery of the electron's spin

2011-03-18T18:26:00.000-07:00

From "Is space like a chessboard?":

The standard cartoon of an electron shows a spinning sphere with positive or negative angular momentum ... However, such cartoons are fundamentally misleading: compelling experimental evidence indicates that electrons are ideal point particles, with no finite radius or internal structure that could possibly “spin”.

Thank you. I have long puzzled over that "standard cartoon" in popular accounts. I was aware of the obvious problem with this picture yet it has been invariably presented as though it were a perfectly clear and correct account of electron spin. This confirms that the expert physicists offering this model didn't really understand what was going on either. They were just faking it.

PS: They may have developed a new clue, but I think they are still groping for a real explanation.

Gaddafi's doom and NATO's survival

2011-03-15T06:02:00.000-07:00

I believe the strategic thinking among the most influential foreign policy elites is that Gaddafi is doomed. He may win military battles but his victories will only force the rebels into a guerrilla insurgency which, under international sanctions, he cannot win. Does this sound like a good outcome? Not to these strategists. It would mean the rebels will have succeeded without Western military support. A no-fly zone will, naturally, be accompanied by "coordination" with the rebels including intelligence sharing and strategic advice, In due course, there will follow weapons and other military supplies and training. By the time the civil war is over, the rebel armed forces will be militarily dependent upon the West and our Generals will have become chums with their Generals. This is the intended result.

Besides, NATO is an enterprise supporting many military careers within itself and peripheral suppliers and organizations. It is in need of new missions to justify its existence. To a large extent, that is what the continued presence in Afghanistan is about, but that effort isn't going so well. Libya would be a second chance.

Libya: an appearance of US stupidity

2011-03-11T09:31:00.000-08:00

In today’s WaPo, Stephen Rademaker makes the case that the Obama Administration blundered by (1) endorsing a UN arms embargo that applies to the rebels as well as Gaddafi, locking in the latter’s military advantage and (2) authorizing the International Criminal Court to try Gaddfi for war crimes, backing him into a no-surrender corner. These may not be mistakes at all, especially if the clever Secretary of State Hillary Clinton is responsible. They may be intentionally aimed at creating circumstances where military intervention to rescue to the rebellion becomes (arguably) necessary. The maneuvers to bring about yet another interventionist war may be beyond the merely verbal. It must not be allowed that the rebels should succeed on their own and feel free to pursue their interests independently of Western hegemony.

I really don't like "intellectual property"

2011-03-03T06:04:00.000-08:00

I see I have been neglecting my blog recently, although you may have seen my frequent comment postings at the Washington Post and occasional comment postings elsewhere.

On this occasion, I would like to re-iterate a point I have stressed in the past by repeating here a comment I just posted to a Raw Story item titled "US report urges action against BitTorrent sites":

Many people seem unaware that the concept of "intellectual property" is historically quite new, basically nonexistent before the 18th century. Somehow, art and science managed to progress quite well for centuries without it. In fact, copyrights and patents are a special interest benefit, a grant of legal monopoly, richly rewarding many individuals and corporations beyond what a free market would allow. To whatever extent such arrangements support innovation beyond that which would normally occur in their absence we can be sure that some resources from the finite supply of resources are being diverted from uses that free markets would deem to be of greater value.

I really don't like "intellectual property".

Incidentally, I have used a BitTorrent site myself on one occasion. After replacing my old PC I tried to load the game "Baldur's Gate" from my legally owned disks to the new machine without success, apparently due to a scratch in one of the disks. I downloaded a "pirate" copy as a replacement. As it happens, that didn't work either, apparently due to the new machine using a newer version of the Windows operating system. I do miss that old game, but I have moved on to the MMORPG play in World of Warcraft.

President Obama's next chief economic adviser

2011-01-03T04:47:00.000-08:00

From today's WaPo:

Wall Street ties complicate the politically touchy search for economic adviser
By Peter Wallsten and Perry Bacon Jr.

President Obama is expected to name a new chief economic adviser as early as this week, but the months-long search process has proven difficult and politically touchy.

Ideally, the choice of a top economic adviser would be based on a preliminary, if rough, understanding of the nature and origin of the current economic crisis and who then would best objectively understand what policies would be needed to deal with it. Looking to economists who successfully predicted the crisis or who have already presented plausible explanations of its causes would be a good place to start. Unfortunately, it appears that the actual selection criteria are exclusively satisfaction of political and ideological requirements -- in effect, a sell out in advance to every major special interest. The predictable result will be compromise polices that rock nobody's boat in any major way and aim for business pretty much as usual. It has already been the problem that the Obama Administration, and Congress and the Fed, have treated the Great Recession as an unusually severe but otherwise normal cyclical downturn treatable by stimulants and bailouts, although there is plentiful evidence that the problem is structural in origin and requires structural remedies.

Politics, and absence of true leadership, will result in continued misdiagnosis and a program of politically acceptable palliatives which will be very weakly effective at best but could, if applied too aggressively, lead to new and worse problems.

A too sadly predictable Afghanistan strategic review

2010-12-18T04:15:00.000-08:00

From the five-page public summary of the Afghanistan strategic review released by President Obama last Thursday:

Al Qaida's eventual strategic defeat will be most effectively achieved through the denial of sanctuaries in the region and the elimination of the group's remaining leadership cadre.

That would be most unfortunate if true as the world is full of potential terrorist sanctuaries and new leaders may easily be tougher and smarter than the ones careless enough to have gotten killed.

The actual most effective way to defeat terrorists would be to cut them off from popular support and new recruits. Military invasions and occupations are the most effective way to do the opposite. That is the real reason terrorism will be a continuing threat to us even as military "progress" is made.

Our leaders, and too many citizens, are in the grip of an angry lash out with destructive force mindset which is tragically counterproductive.

2010-12-03T04:28:00.000-08:00

Today from infamous WaPo neoconservative columnist Charles Krauthammer:

The problem is not that the purloined cables exposed U.S. hypocrisy or double-dealing. Good God, that's the essence of diplomacy. That's what we do; that's what everyone does.

And here I thought neocons believed in American "exceptionalism", (not really). Lying about American virtue, like lying about supporting democracy, (sorry Yemeni parliament and people, now you know our empire is your real ruler), is what neocons do.

As the neocons like to say, it's a dangerous world. There's war, torture, subversion -- and the terrorists do some damage too.

Glass-Steagall

2010-11-16T06:09:00.000-08:00

Well into the depths of the Great Depression, Congress did its best to understand what had precipitated the crisis and what needed to be done to prevent a recurrence. One result was the Glass-Steagall Act of 1933. The main idea was to require the banking industry to reorganize into banks of two types: investment banks that could freely trade, or speculate, in securities and commercial banks which would mostly concentrate on loaning depositor funds to businesses.

If Glass-Steagall had not been repealed in 1999 it would not have prevented the real estate bubble but it would have made it unsustainable sooner, lessening the severity of its collapse. It would also have reduced the spreading of the damage to other sectors of the economy. The result, I estimate, would have been something more like a normal business cycle recession.

I recommend that something very similar to Glass-Steagall be reenacted. The banksters will scream bloody murder and plead that foreign competitors will take over the lucrative derivative based businesses they will be hobbled from doing any longer themselves. My answer is that if other countries want to put their economies at the mercy of institutional speculators taking ruthless advantage of the "too big to fail" moral hazard and inevitable episodes of excessive credit expansion then let that be their problem.

Leadership = creativity + guts

2010-11-09T05:24:00.000-08:00

Obama has barely enough guts to defend an idea with either a sizable constituency on the left, like major health care reform, or on the right, like escalation of the Afghanistan war. (Both of which, in my view, being bad moves). The truth is that neither the left nor the right have been creative enough to come up with credible solutions to our current crises and both major parties are mired in the status quo when it comes to anything offensive to elite corporatist interests. The leader we need is one whose analytical skills are not applied to finding excuses for failure but for finding ways to deal with the nation's problems which, although doubtlessly opposed by entrenched interests and ideologues on one side or other, are justified and justifiable to the general public. I believe such ideas exist but they need to be dragged out into the open from underneath the nay-saying scorn of self interested and dogmatic opposition.

Obama on the economy

2010-11-08T08:29:00.000-08:00

"I thought the economy would have gotten better by now," he said.

Probably because he really didn't want to hear about serious structural problems. He wanted to treat the Great Recession as merely a worse than unusual cyclical downturn -- enough fiscal and monetary stimulus, a few emergency bailouts and it would soon be all over. It isn't true. Like an outgoing tide, this recession revealed, to those willing to see it, the wreckage previously obscured from view -- the decline of manufacturing and the financialization of the economy, the stagnation of real wages and the historically extreme wealth distribution skew, the capture of the regulators, and Congress, by the corporatist elites. This was more than the new President was willing to grapple with given his preference for health system reform.

After apologizing to the corporatists for his few mild rhetorical "antibusiness" indiscretions and groveling before them, he hopes to receive soothing approvals -- the consolation for his failures being told by the many anti-reform interests that there really wasn't any more he could have done nor do now.

Is it all Reagan's fault?

2010-10-27T08:53:00.001-07:00

Chronologically, the Reagan Administration may mark a turning point but the main substance of the economic damage to the middle class occurred under subsequent administrations, both Republican and Democrat. Actually, I still look back with favor upon most of what Ronald Reagan did.

What has happened is bigger than any single President. It is the rise not of socialism, of which there is no significant evidence, but of corporatism -- a corruption of free market capitalism. Perhaps the chief virtue of limited government is that it has little to offer to wealthy special interests -- it is limited to that which benefits all citizens more or less equally. Government has, indeed, become too big and, even more importantly, too unrestricted in its scope.

Who has benefited? Taking the home mortgage crisis as an example, it may seem at first blush that under-qualified mortgage seekers benefited from the government's interventions in the market, from FHA to Fannie Mae and much in between, but where are they now? Who, meanwhile, has walked away with billions, not mere millions, from the bubble built with Collateralized Mortgage Obligations and credit default swaps -- instruments ordinary citizens never heard of before post-crash media reports? Who has suffered the damage to their pension funds and IRA accounts and the value of their homes?

This was NOT entirely an accident. The financial elite knew that whatever setbacks their strategies might suffer they would have protection. Understanding risk, after all, is basic to their professions. What hedging and insuring they provided for themselves would be further fortified by their networking connections and their "too big to fail" status virtually guaranteeing government bailouts. For them, the profit and loss market system had become the fabulous profit and merely huge profit rigged market system while the little people, middle class homeowners and taxpayers, bore risks they never even knew about.

Because of the government aid extended to under-qualified home buyers, popular even with the middle class at the time, "Socialism", (taken broadly to mean any government market intervention), is taking the rap in the prevailing propaganda with those buyers now paying the price of government meddling with foreclosers and payments they can no longer afford.
But beneath a layer of obscuring technicalities, the main damage to the wider economy, including very responsible home owners who never overextended themselves, was the work of the corporatists in the big banks and other financial institutions and the politicians bought with corporatist money. It was they who tore away the sensible post-New Deal regulations that would have contained the problem.

Christian right and the Tea Party

2010-10-22T05:51:00.000-07:00

Mentioned by Michael Gerson at the WaPo:

One intriguing finding of the recent American Values Survey is that 55 percent of Tea Party supporters believe that "America has always been and is currently a Christian nation." The figure among Christian conservatives is 49 percent. According to the survey, the Tea Party movement is less religious than the traditional Christian right. Yet a higher percentage of Tea Party supporters believe in a Christian America.

So what would account for this anomaly? Perhaps there is more similarity between the Tea Party movement and the traditional Christian right than is obvious, the overlap being obscured by an expedient public disassociation a bit like that of Sinn Féin and the Provisional Irish Republican Army (IRA). I am not completely convinced by accounts of the Tea Party's origin as mainly a tax revolt. Taxes are never popular but neither current taxes nor proposed ones are especially heavy by the standards of recent history, so why should a major anti-tax movement so suddenly develop now?

I believe the traditional Christian right was manipulated by secular, or at least non-Christian, neoconservatives into supporting their global hegemonist agenda by appeals to fear of Islamic terror. What if the Christian right learned practical lessons in subterfuge from the experience and now seeks to exploit the universal unpopularity of taxes and traditional conservative antipathy towards big government to advance a private agenda of its own? If it is true that a higher percentage of Tea Party supporters than the traditional Christian right believe in a "Christian America" then what will they prove to be really about if their candidates are elected?

The "Tea Party" doesn't like Obama

2010-10-14T09:04:00.000-07:00

... and I don't much care for him either. I think he is the "change" candidate who has been positively afraid to recognize how much difficult reform is actually needed. We have very expensive quagmire wars being fought for shifting and questionable reasons, a collapsed and corrupt financial system, a hollowed out industrial base, a sagging infrastructure, an exploding government debt and a Federal bureaucracy that demonstrates incompetence in dealing with hurricanes, oil spills, credit bubbles, faked foreign intelligence, illegal immigrants, illegal drugs and with battleworn troops being poorly treated by the Veterans Administration -- just to name just a few examples. Neither have we closed the Guantanamo prison nor prosecuted our war criminals as our treaty commitments legally require us to.

Ironically, however, the condemnation from the right is largely ignorant or knowingly malicious "big lie" style propaganda that falsely accuses this President, who has gone endlessly astray with futile attempts to placate the right, of being a radical leftist. He is actually, like most Republicans, a big government authoritarian pragmatist-opportunist subservient to militarist and corporatist interests who, in terms of political muscle rather than size, define the actual current political center in this country.

Not just perceptions -- Obama's problem is truly poor leadership

2010-10-12T12:06:00.000-07:00

If you believe Richard Cohen at the WaPo today, Obama suffers from Jimmy Carter's problem of perception:

Carter's energy program was right on the money. The message was fine; the messenger was awful. This is exactly the case with Obama, who is far more likable than Carter, yet is being cuffed around in a similar manner. Being right is nice. Convincing others you are is essential.

Obama's real problem is that he stops at being, at most, half right. After a rhetorical gesture in the right direction where reform, ("change we can believe in"), is needed he proceeds to muddle and mix the message with concessions to opponents who are mainly beneficiaries of the status quo. We get, therefore, bailouts but no real restructuring of a disfunctional banking system. He demands an AfPak exit strategy but agrees to a "surge" designed by his General in charge who says: "This is the kind of fight we're in for the rest of our lives and probably our kids' lives." Even his signature health care reform was basically abandoned by him leaving it to his Party in Congress to figure out, in negotiations with lobbyists, what exactly was to be done -- so even if somehow something was done right in the process it will not have been Obama's doing.

If anything, Obama's rhetoric has been over bold compared to what he has actually been prepared to fight for. To go by his rhetoric, it can be possible to view Obama as a "socialist" or a "Kenyan anticolonialist" or even a "community organizer", but when it comes to his actual accomplishments he is just another patsy for the corporatist and militarist elites.

Central bankers too wed to status quo

2010-10-12T06:40:00.000-07:00

Mervyn King: Regulators can't rely on bank models

WASHINGTON (MarketWatch) -- Global bank regulators cannot rely on models financial institutions use for themselves to identify if there is too much risk in the system, said Mervyn King, governor of the Bank of England, on Monday. "It is the case that conventional calculations of risks and how much capital banks need turn out to be irrelevant from one day to the next," he said. King added that regulators must identify two or three major developments that are creating risks and "then have the courage to go in and tackle them."

No, regulators must have the courage to go in and build firewalls, or better yet break the big banks into separate corporate entities, so that most banking is of a conventional sort where conventional calculations of risks and how much capital banks need turn out to be relevant from one day to the next and to put the rest of financial activity into separate realms for speculators who can put few at risk besides themselves. Mr. King's advice is really nothing but to trust once again to essentially the same regulatory framework and financial structure that has already failed us. It would inevitably once again allow the nest eggs of pension funds and insurance companies to be misused by financial "innovators" who are mainly expert in finding creative ways to make highly leveraged bets seem much less risky than they really are.

Pinning down when the housing bubble became serious

2010-10-11T09:56:00.000-07:00

WASHINGTON (MarketWatch) — Few people saw the housing bubble as clearly and in as much detail as economist Richard DeKaser, who created a city-by-city housing valuation index that showed precisely how overvalued the nation’s housing stock was in 2005 and 2006.
...
In early 2005, DeKaser found that 53 metro areas, accounting for 31% of the U.S. housing stock, were severely overvalued by 30% or more and faced a high risk of price correction. The year before, cities that were overvalued had accounted for just 1% of the total value of the nation’s housing stock. By mid-2006, DeKaser’s research showed severe overvaluation in 79 cities, or 40% of the housing stock.

Interesting. While the roots of the housing bubble probably go back decades, Mr. DeKaser may have found the point at which a smoldering problem was fanned into a blaze by excessively loose monetary policy. This would, I think, be about the time the Federal Reserve, either intentionally or not, was using cheap money to hide the credit market effect of an expensive debt-financed "Global War on Terror".

War and the law

2010-10-09T06:59:00.000-07:00

War profiteering, marauding mercenaries and such have been part of war throughout the history of war. Likely the problem is even worse when war is chosen for dishonest or dishonorable reasons. It might not be immediately obvious on the outside but insiders would know that an anything goes tone has been set and that all manner of crime would be quietly countenanced in the heat of battle. Misdeeds up to and including outright atrocities are covered up or rationalized away in order to not distract from prosecution of the war or cause questions to be asked about its propriety. Being the ultimate exercise of power, war is also the ultimate source of corruption. Lawyers should be among the first to recognize the danger except so many of them are merely mechanics using the tools of law to achieve ends defined by the providers of their pay checks. While war fever holds sway, they can't be bothered to also be defenders of the rule of law. More often they are among the agents of its corruption.

2010-10-07T07:38:00.000-07:00

Christopher Whalen, managing director at Institutional Risk Analytics, made the following criticism of the Obama Administration at an American Enterprise Institute event where it was likely received warmly despite the fact that it really applies at least as well to the Bush administration.

Failure by the Obama administration to restructure the largest banks during 2007-2009 period only means that this process is going to occur over next three to five years — whether we like it or not.

From the start of the TARP bailouts I thought the Bush and then the Obama Administrations were wrong to neglect major restructuring of the big banks, both with respect to the "too big to fail" moral hazard and with allowing institutions responsible for protecting pension and trust funds to indulge in hedge fund style speculation with exotic derivatives. No doubt the bankers were telling the politicians that reform in the midst of the crisis would be "too disruptive". I don't believe that. The main disruption would have been to the banker's bonuses and, in some instances, their continued employment. The toxic asset positions were going to take a while to unwind and have to be carried on government books in any case and everything else could have been managed with conventional bankruptcy tools.

With the Obama Administration especially, every interest group from banks to health insurers to oil drillers to Pentagon brass is able to intimidate it into ignominious forfeit of the broader public interest.

You call this "Push Back"?

2010-10-01T06:32:00.000-07:00

What is hard to understand are the reviews of Woodward's book, "Obama's Wars", speaking approvingly of how Obama "pushed back" on the Generals and civilian militarists advising him -- this based on concessions he won on paper which are totally unenforceable. Instead of giving the war makers everything they want immediately he'll just have to give them 80 percent down with the rest due when they report that "good progress has been made but we need to do more or all that we have accomplished so far will be wasted and Al Qaeda will be triumphant and a worse threat than ever". Who, except for the President, doesn't see that coming? Obama did not "push back" in any meaningful way. He only kicked and scratched a bit as the Generals pinned him to the floor.

Koran burning is the least of it

2010-09-09T11:37:00.000-07:00

Obama urges Fla. pastor to call off Koran burning
President Obama urged a Florida pastor Thursday to call off a plan to burn copies of the Koran on Sept. 11, warning that such a "stunt" would amount to a "recruitment bonanza for al-Qaeda" and would endanger Americans.

Let's see: Our government invades two Muslim countries on questionable grounds causing civilian "collateral damage" fatalities in the hundreds of thousands. Repeatedly, initial investigations reporting that only insurgents or terrorists were killed have to be withdrawn when reporters or local officials produce evidence to the contrary. Prisoners are tortured and evidence points to it being a consequence of policy by higher ups but only a few low ranking troops, and no intelligence agents, are held to account. And NOW the President and a flock of Senators and Generals are concerned that the protests of an obscure Christian church might be a "recruitment bonanza for al-Qaeda"? Just what do our reality challenged officials think they've been doing for the last eight years?

Not a normal recession

2010-09-07T09:36:00.000-07:00

David Stockman tells us:

"If you peruse the flow of funds, and you'll see that corporate-sector cash assets have increased by $279 billion since the December 2007 peak, and now total $1.72 trillion. According to the same data, non-financial, corporate-sector debt has increased by $480 billion and now stands at $7.2 trillion. Corporate debt net of cash has actually increased by $200 billion during the Great Recession."

For corporations the credit bubble never burst. If consumer prices fall the way home prices have the corporations could find themselves suddenly in debt over their heads the way home owners did. That may well be the reason for the cash cushion - which in an environment of greater business confidence might have gone into hiring and propping up demand. Stockman is right, this is not a normal business cycle and traditional countercyclical policies don't work.

Corruption and the "war on terror

2010-09-04T04:40:00.000-07:00

From the WaPo:

U.S. to temper stance on Afghan corruption
By Greg Jaffe
Washington Post Staff Writer
Friday, September 3, 2010; 8:31 PM

KANDAHAR, Afghanistan - U.S. military commanders in Afghanistan are developing a strategy that would tolerate some corruption in the country but target the most corrosive abuses by more tightly regulating U.S. contracting procedures, according to senior defense officials.
...

So corruption is Afghanistan is to be tolerated for the sake of military expediency. Do not be shocked that this happens on the "war on terror" home front as well for what else are measures such as warrantless surveillance, indefinite detention and executive assassination orders but corruptions of the Constitution and the rule of law?

There is a difference however. In Afghanistan minor corruption is tolerated while major corruption is still opposed. Here it is the reverse.

Torture, assasination and who knows what else?

2010-08-31T06:06:00.000-07:00

Rights groups sue over U.S. authority to use terror kill list
The American Civil Liberties Union and the Center for Constitutional Rights filed a federal lawsuit Monday challenging the U.S. government's authority to target and kill U.S. citizens outside of war zones when they are suspected of involvement in terrorism.

Obama reaped a harvest of praise when he ordered an end to torture, ("enhanced interrogation"), but he left loopholes: http://www.globalresearch.ca/index.php?context=va&aid=12041
Neither has he done anything at all to inhibit the un-banning of the full torture regime by a successor Administration -- or even his own. The ban has the earmarks of mere expedient political posturing as opposed to an act of either moral principle or fidelity to the rule of law. It therefore comes as no surprise to this observer that the President, like many a shabby third world despot, is also comfortable with the deployment of death squads.

Republican extremism

2010-08-23T15:16:00.000-07:00

I think it is entirely mistaken to represent Republican extremism as a mere electoral strategy or as something that only started with opposition to president Obama. I think it started quite a while ago when the Party welcomed the Evangelical Fundamentalists to become a major element of its political base. It was clear that many of them were religious fanatics willing to applaud bombing of abortion clinics, persecution of gays and Israeli atrocities commited upon Palestinian Arabs all because, in their minds, their readings of the Bible superseded both secular law and ordinary humanistic morality. However, the neocons, (sometimes mistaken for foreign policy experts), already in the party wanted them as "useful idiots" who would help them steer the country into the military adventures they craved. Decent conservatives, for reasons best known to themselves, put up with this. Now it will be very hard to undo the damage.

WWIII

2010-08-14T09:48:00.000-07:00

Those of you rooting for an Israel-Iran war with the US dragged in even while aware that either or both of the Iraq and Afghan adventures have been counterproductive, or at least disproportionately expensive in blood and treasure, better have your excuses and justifications ready when all hell breaks loose and even nominally friendly governments are overthrown in Egypt, Saudi Arabia and nuclear armed Pakistan. Wait till you see what happens in Lebanon, Syria and even Turkey. Then there is Chechnya and all the "stans" and Bosnia like tinder waiting for a new spark. What will NATO do? Russia? China? Not least of all, what will become of Israel?

Have any of you read or seen "Gone with the Wind"? The foolish Southerners were so sure that war would solve their problems with the Yankees.

The real WWIII, (not the stupid neocon fairy tale version), beckons. Everybody get ready.

Home ownership

2010-07-30T09:24:00.001-07:00

Home ownership is advertised as a social good -- a means for giving residents a stake in their community. This is a euphemism for neo-serfdom. The last thing local governments and businesses want are taxpayers and employees who can easily look for better treatment elsewhere. To the extent a local population is bound to the land it is more easily subjected to a level of routine exploitation. This is the "benefit to society".

How governments defy the rule of law

2010-07-22T11:40:00.000-07:00

Reported by chief political correspondent Nicholas Watt in the guardian.co.uk website, Wednesday 21 July 2010:

Sir Gus O'Donnell, the cabinet secretary, wrote to Sir John Chilcot on 25 June to allow the inquiry to publish more documents relating to the legal advice. The most significant of these documents was a note on 30 January 2003 by the then attorney general, Lord Goldsmith, to Tony Blair.

In the note Goldsmith wrote: "I remain of the view that the correct legal interpretation of [UN security council] resolution 1441 is that it does not authorise the use of military force without a further determination by the security council."

Goldsmith famously changed his mind on the legality of the war in March 2003 after Admiral Sir Michael Boyce, the former chief of the defence staff, demanded a clear undertaking that military action would be lawful. Boyce feared that British forces could face legal action unless the invasion had legal cover.

This is, of course, very similar to the US Justice Department memos written to give cover for torture of War on Terror prisoners. Successor governments in both countries, even when of opposite parties, are loath to acknowledge that illegal acts were commited under cover of dishonest opinions issued by politically motivated government lawyers for fear that it would facilitate bringing well justified war crime prosecutions in legal forums with international jurisdiction. Citing traditions dating from the Magna Charta, "Anglosphere" countries have laid claim to being exemplars of the rule of law but, in fact, politics trumps law when it really matters.

How the Politcal Elites Govern

2010-07-19T09:21:00.000-07:00

In the July 18 WaPo:

"It's the political season, so the Obama administration will keep its focus on politics. Governing has not been the president's friend in dealing with voters, so rhetoric will rule his days. Serious policy will have to wait for a lame-duck session."
-- Ed Rogers, White House staffer to Ronald Reagan and George H.W. Bush; chairman of BGR Group

Such raw unabashed elitism! This is, unfortunately, how the so-called "people's representatives" rule -- through elections made as meaningless as possible and working out in the post-election time, amongst themselves and the lobbyists, what best serves their special interests as governing elites.

On measuring the size of the proton

2010-07-11T04:53:00.000-07:00

The proton shrinks in size
Tiny change in radius has huge implications.

By Geoff Brumfiel
The proton seems to be 0.00000000000003 millimeters smaller than researchers previously thought, according to work published in the July 8 issue of Nature.
The difference is so infinitesimal that it might defy belief that anyone, even physicists, would care. But the new measurements could mean that there is a gap in existing theories of quantum mechanics. "It's a very serious discrepancy," says Ingo Sick, a physicist at the University of Basel in Switzerland, who has tried to reconcile the finding with four decades of previous measurements. "There is really something seriously wrong someplace. ..."

The radius of the proton probably derives from the position uncertainty of the three quarks that move about inside it and is in a reciprocal relation of some sort to the momentum of the electronic or muonic atom. Then the smaller proton radius observed with the heavier muon results from the greater momentum of the muonic atom.

Understanding the broader War and Economy picture

2010-06-29T05:38:00.000-07:00

War spending should not be treated as a separate, untouchable category -- unmentionable in an economic discussion. The way generals allocate resources on the battle field is but one economic component of the broader national effort to efficiently obtain an optimal over all combination of security and prosperity for the nation. In the real world peace spending and war spending both matter to the economy. To pretend otherwise risks, in effect, losing the war by allowing spending on it to wreck the economy. We must look strategically beyond the tactical requirements of any particular war situation to avoid ruin through foolish misallocation of highly valuable resources be it for entitlements or defense.

The plight of the Right

2010-06-24T06:26:00.000-07:00

It is clear that the American political right, and therefore the Republican party, is fracturing. During the Bush-Cheney years the neoconservative and corporatist elites defined the conservative agenda, at least so far as mainstream media was concerned. Their chumps were the schmucks too beguiled by a blend of Christian Crusader fundamentalism and Manifest Destiny mythology to realize how they were being exploited. Eventually the costs to the working class victims of the elite policies, first in the foreign interventions then in the domestic economy, costs the elites themselves typically did not bear, provoked a poorly focused "populist" revolt of sorts among the shorn and plucked. They have begun to doubt the elite right-wing propaganda but, being endemically stupid, many of these manage to blame "liberals" and "socialists" for their troubles despite a clear historical record pointing to the true authors of their misery.

General, If I'm going down on this I'm taking you with me.

2010-06-23T15:10:00.000-07:00

Obama relieves Gen. Stanley McChrystal from duties as commander of U.S. and NATO troops and names Gen. David Petraeus as replacement

Advice from General Petraeus along with that of General McChrystal helped to put President Obama on the ambitious nation building course in Afghanistan against the advice of others led by Vice President Biden. Now that Obama's choice looks increasingly like a blunder that puts him in the hot seat he perhaps draws satisfaction from making sure that Petraeus will be in a hot seat of his own. I wouldn't be surprised if the selection of Petraeus was a suggestion from VP Biden.

About that withdrawal date.

2010-06-16T05:59:00.000-07:00

I am about as certain as I can be that Karzai, the Taliban, the Pakistan military and just about everyone else in the region expected all along that the insurgency would outlast the occupation. If Obama had insisted, Bush-Cheney style, that we would stay as long it takes everyone over there would have dismissed it as chest-thumping bluster. Only our domestic warhawks could possibly talk themselves into actually believing such a thing. No US President could deliver on such a promise. His time in office is limited as is the patience of the American public. Under the circumstances, Obama was wise to use a target date, (not actually a promise), for withdrawal as a spur for Afghan reform, It probably won't work, but there is little else to even try.

Why Obama Gets Into Trouble

2010-05-27T09:03:00.000-07:00

Has anyone noticed that when Obama gets into trouble it is for continuing Republican approved policies, implemented by holdovers from the Bush/Cheney Administration. The Afghanistan war is another example of his failure to reverse course as was a policy of deregulation of the financial sector. He is forced to react, under shameless hypocritical criticism from Republicans, to disasters that would have been avoided if he had only delivered better on the change he had promised as a candidate. I foresee his determination to pursue military commission trials will prove to be another fiasco as will escalating sanctions on Iran.

The Underlying Basic Blunder

2010-05-26T10:46:00.000-07:00

Yesterday Katrina vanden Heuvel of the Washington Post asked:

What were the last eight years of lost blood and treasure about?

To this my my reply was:

They were about terrorist hysteria. The government and much of the public panicked and went to war over an attack which was visually spectacular and frightening but in no way comparable to a military strike by a powerful nation such as, for example, the Pearl Harbor attack by Japan. It was a gross over-reaction to treat the 9/11 atrocity as an act of war instead of as a particularly heinous cross-border act of mass murder. Now we are paying the price for that mistake -- not only in blood and treasure but in moral corruption, (as in toleration of torture of prisoners and excessive civilian casualties), and serious weakening of civil rights and liberties, (as in warrantless eavesdropping and a willingness to order executions of American citizens without trial).

It is discouraging that the "look forward" Administration has done next to nothing to undo the damage and in some respects is inclined to descend even further into amoral malevolence, lawlessness and ruin.

This is part of what I believe was Obama's main political misstep from the start: a naive hope to establish a new era of constructive bipartisanship with Republicans. At another time, this could have been an admirable endeavor but not when (A) the previous Republican administration had commited so much grievous wrong begging for correction and (B) Republicans were set on confrontation, not conciliation. One unfortunate result has been the misguided choice to retain many of the political hacks, neocon warmongers and corporatist minions installed in the Bush Cheney reign of error. The disgraceful failure of regulatory oversight and control by the Bush holdover officials at the Minerals Management Service in the case of BP and other company's deep offshore drilling programs is only the most current example of the poor wisdom of that policy.

Costs of War

2010-04-15T07:48:00.000-07:00

Reported today at McClatchy:

As America inches closer to a decade of war, the cost increasingly is being questioned. People who years ago might have feared being called unpatriotic are lambasting the trillion dollars spent since 9/11.
...

My comment:

It is a fraud that the wars have anything to do with fighting terrorism since the inconveniences caused to the terrorists are more than offset by the support they get from previously peaceful civilians who have been bombed and displaced and who have suffered losses of friends and family and livelihoods and who themselves must live in terror of more to come. These wars are actually the project of militarists seeking geopolitical gains such as curtailing the rising influence of China in South Asia or "isolating" Iran or simply having more bases in more countries in the region. The costs of these wars are not the costs of security, they are the costs of empire.

Democrats

2010-03-04T06:45:00.000-08:00

My theory is that during reign of the Bush-Cheney "wartime" autarchy the Democrat's ability to engage in politics with Republicans, in any constructive way, became debilitated. Having let their critical faculties go to rot for almost eight years they can only propose old left ideological nostrums from the past, such as trying to resuscitate the corpse of Hillarycare, or adopting some of the more odious Republican ideas that they got used to acquiescing in during the previous administration, such as ignoring the war crime of torture.

Comforting delusions

2010-02-23T08:31:00.000-08:00

If waterboarding is not torture then chocolate isn't fattening, smoking is not hazardous to ones health, cops never arrest the wrong person and that nice fellow offering to sell it to us has a genuine deed to the Brooklyn Bridge. We are talking about comforting delusions here folks. They happen because there are always some things that we would prefer to believe even when they are ridiculous. Well trained legal professionals offering legal advice should be above crude delusional errors of this kind. When they pretend not to be it is another comforting delusion that they would like us to believe in.

Not only should Yoo and Bybee have been held to account instead of perpetuating the expedient fiction that they commited only innocent errors but so should the CIA and other governmental lawyers to whom their torture memos were addressed. As legal professionals themselves they are responsible for exercising independent critical judgment. They have no excuse for not rejecting the memos as the frauds they clearly were.

Congratulations to Representative Paul.

2010-02-21T05:47:00.001-08:00

(CNN) -- U.S. Rep. Ron Paul, R-Texas, a stalwart foe of government spending, won a blowout victory Saturday in the annual Conservative Political Action Conference presidential straw poll.
...
The announcement of Paul's win, a surprise victory unlikely to have a major impact on the 2012 presidential contest, drew a volley of loud boos from the CPAC audience.

There apparently was an underestimated contingent of quiet libertarian conservatives present masked by the rowdiness of the Christian Crusader Southern populist types. Congratulations to Representative Paul.

Who are the DOJ lawyers really protecting

2010-02-20T07:08:00.000-08:00

By his forbearance to seek prosecutions as well as his continuation of many Bush-Cheney polices and claims to "unitary executive" style authority President Obama has made himself complicit in the subversion of international treaty law and the Constitution. The main legal protection that Bush-Cheney officials, and now President Obama, have are the distorted DOJ analyses that what was done or condoned was not technically illegal. This defense relies strongly on the notion that the DOJ opinions were not deliberately contrived in conspiracy with officials who otherwise might face war crime charges. Protecting Yoo and Bybee by asserting their good intentions is a necessary part of a broad defense strategy that apparent violations of humanitarian law were only innocent mistakes of judgment. Make no mistake, the main object is to protect not the CIA interrogators but the Presidents who are ultimately responsible. If it were just the CIA interrogators they might well be thrown to the wolves much as some of the military ones were. DOJ lawyers in both cases are not really judging government employees who are without influence in the DOJ. They are being asked, indirectly, to indict Presidents. An independent Judiciary, if we have such, might produce a more honest result but I am not hopeful that it would or could take jurisdiction.

It is official: sanctioning torture is not punishable.

2010-02-19T17:42:00.000-08:00

Late Friday is when government officials make announcements that they hope will go little noticed. Here is today's, found first not on the NYT or WaPo websites but in the British Guardian's:

An inquiry by the US justice department last night reprimanded two senior Bush era lawyers who approved the use of torture at Guantánamo Bay. The department found the two lawyers, John Yoo and Jay Bybee, guilty of poor judgment but not professional misconduct.

Either this is yet more politically motivated deliberate and disgraceful misinterpretation of the law or the seemingly clear laws against torture, including the Geneva Conventions, are absolutely useless. I can see no possible third alternative. Evidentally an Administration willing to politicize the DOJ can do whatever it pleases with impunity and even count on a successor Administration to acquiesce to its malfeasance.

Leadership must surpass the "art of the possible"

2010-01-20T21:21:00.000-08:00

I have come to understand that members of Congress, as devotees of politics as "the art of the possible", are preoccupied with maneuvers for getting legislation passed and are grossly deficient as practitioners of politics as "the art of the public good"; i.e., identifying and meeting the needs of the nation. It may have been different in the earlier years of the republic but now it seems to be taken for granted that Congress must look to the executive branch for leadership.

Having realized this, I now see that a big part of Obama's shortcomings as President is that he shares the pragmatic legislator's cast of mind when, especially in a time of crisis, the role required in the Presidency is that of the visionary. If this comes from a simple misunderstanding of what is required of him then it is repairable but if it is rooted in his character then we are doomed to endure an administration of misplaced priorities and dubious accomplishments.

It may be a defect in our government, probably related to the rise of the two party system, that alternative leadership cannot be expected from inside the Congress.

Democrat masters of political suicide are being egged on to do it again.

2010-01-20T11:35:00.000-08:00

Pundits, including prominent liberal bloggers, are mostly of the opinion that health care reform must be passed despite the Massachusetts result or Obama and his party would suffer politically for the defeat. A few of us, including yours truly, remain of the opposite opinion. Forcing enactment of a reform bill now, by whatever tactic, will only cause more political damage. Democrats should be asking why so many Republicans are with the damn the torpedoes full speed ahead Democratic conventional wisdom on this. Democratic leader's perceptions are being distorted by a feeling that failure to enact something is a personal defeat and embarrassment for them. Republican pols, meanwhile, know perfectly well what the best political outcome for themslves is.

Why the Democrat's "health reform" is in trouble

2010-01-20T10:01:00.000-08:00

Why is the Democrat's "health reform" in trouble? The short answer is lack of effective leadership from the White House.

To elaborate: Obama's decision to campaign for health care reform, like that to endorse the Afghanistan war as the "good" war, was made for tactical political reasons rather than objective cost-benefit analysis. I doubt he ever really bothered to understand what kind of reform was needed. He just assumed that Democrats in Congress would come up with something for him that would placate his progressive base even as he otherwise offended it over his continuation of Bush-Cheney policies with regard to widening warfare and evasions of the rule of law. He has failed to understand that tactical political maneuvers, however expertly executed on his behalf by experienced pols, would not produce a result of visable net benefit to the public unless guided by a well informed strategic purpose.

Obama is just a charismatic campaigner who erroneously assumed that policy "wonkery" could be safely left to others.

Obama: pragmatic but inept

2010-01-19T09:10:00.000-08:00

Despite rightist claims that Obama is an extreme left-wing ideologue all evidence is that he is a pragmatic but inept policy maker. With little idea of what is actually best for the nation, he is being guided primarily by politics as interpreted by old hands such as Rahm Emanuel and David Axelrod -- hence failure to deliver on the promises of change. He must have figured that health care reform would appease his progressive base as he repeatedly caved in to right wing militarist pressure to protect the lawless anti-terror framework created by his predecessor. However, he failed to anticipate that extensive concessions to health insurance and pharmaceutical special interests would produce a bill unpopular even on the left. I think that is because he really doesn't understand in any fundamental way what is wrong with the current system. He only pursued reform in expectation of a political benefit.

What the Christmas Day airplane bombing attack tells us

2009-12-28T09:03:00.000-08:00

Apparently neither the war in Iraq nor the one in Afghanistan did anything to prevent the Christmas Day airplane bombing attack. Indeed, those wars most likely helped to cause the attack by contributing to the radicalization of the perpetrator. So much for the notion that we fight them over there so we won't have to fight them over here. That is a dangerously flawed idea made superficially plausible by the other dangerously flawed idea that there can be a "war" against terrorism. That notion only encourages the misuse of strategies appropriate to conventional warfare that are counterproductive to anti-terrorism.

If it were not for the distraction of the overseas wars, and the contempt shown by our militarists towards law enforcement and rule of law, perhaps the law enforcement style security measures would have been pursued more adequately. The Transportation Security Administration and the Customs and Border Protection agency are both awaiting Senate confirmations of new heads and hearings are not yet scheduled. That delay is primarily blamed, with reason, on the tussle over health insurance reform -- which was itself a distraction better deferred in time of war and economic collapse. However, the Obama administration waited over eight months before even nominating anyone for those posts. Much of that time was spent in endless reviews of General McChrystal's proposals for the Afghanistan war.

The early Audrey Hepburn

2009-12-18T09:16:00.000-08:00

I noticed today the re-make of Sabrina being shown on the TV. (My wife was watching. I unfortunately have little time for TV movies anymore). It reminded me of how much I enjoyed the performance of Audrey Hepburn in the original. Actually, I like all of Audrey's early work . After her early successes, however, she took her acting much more seriously. She became more studied, more focused, less spontaneous. I know that there are many who think that this is how acting should be and they can applaud the transition but for me something wonderful was lost.

Predator drones as victims of "intellectual property"

2009-12-17T08:37:00.000-08:00

The Wall Street Journal today is reporting that:

Militants in Iraq have used $26 off-the-shelf software to intercept live video feeds from U.S. Predator drones, potentially providing them with information they need to evade or monitor U.S. military operations.

The article also tells of one difficulty in correcting the problem:

Predator drones are built by General Atomics Aeronautical Systems Inc. of San Diego. Some of its communications technology is proprietary, so widely used encryption systems aren't readily compatible, said people familiar with the matter.

Proprietary technology is a product of "intellectual property" which itself is an artifact of government intervention in the natural conduct of free trade for the benefit certain commercial interests. The real public interest lies with voluntary commercial standards promoting interchangeability of standardized components and competition based solely on price and quality of the products. Encryption technology does not need to be either secret or restrictively licensed to be effective. Indeed, this example shows that the opposite is true in practice.

Bandit capitalism

2009-12-16T13:22:00.000-08:00

There is no group more dangerous to capitalism then the capitalists. It is they who lobby for special rules, generally too arcane and indirect for the general public to see them for what they are, that shelter selected businesses from the full force of market competition. It is they who will subvert law if they can to apply a reassuring legal veneer to products which are actually cleverly disguised pyramid schemes where nothing of substantial value is produced and gains for some are made only at the expense of others. In this way a financial elite grows in influence and power -- typically defended by the naive who mistake them for heroes of productive industry. Even uncorrupted political leaders can not save us from bandit capitalism since they invariably go the wolves for advice on who should guard the sheep.

Obama the wimp

2009-12-06T22:30:00.000-08:00

Obama is a conciliator by temperament. He has the instincts of a lefty community organizer looking to bring opponents together and getting them to agree to compromises. That could be a good thing but only for a conciliator who knows how to deal with the occasional faction that proves to be intractable and uncompromising. Obama does not have that skill. While he may be aiming for a less domineering, more realistic, role for the US his progress towards that goal is almost entirely rhetorical or symbolic. He yields to the neocons. the unreconstructed militarists and imperialists of our time, the entire substance of their demands -- less, I believe, from finding merit in their recommendations than out of fear of confrontation.

Christians and torture

2009-12-03T11:51:00.000-08:00

Glenn Greenwald at Salon points out that "It's almost impossible to find a nation with as many torture advocates as the U.S. has."

In Iran, for instance, only 36% believe that torture can be justified in some cases, while 43% believe all torture must be strictly prohibited. Similarly, 66% of Palestinians, 54% of Egyptians, and over 80% of Western Europeans believe torture is always wrong. The U.S. has a far lower percentage than all of those nations of individuals who believe that torture should always be prohibited.

Personally, I suspect that this has much to do with the resurgence of Christian fundamentalism as a force in US politics. Mr. Greenwald's article is based on a current Pew survey and neglects to mention a Pew survey this Spring that identified "White Evangelical Protestants", (not exactly the same as "fundamentalists" but close enough), as the leading demographic group in favor of torture and furthermore showed that approval of torture is positively correlated to frequency of religious services attendance.