Thursday, December 31, 2009

Ringing Out the Old Year

... with a little festive music...

Global Warming Seen Through Y2K

The same psychology that drove the over-the-top fear mongering and emotional reactions to the Y2K 'Crisis' is currently driving the Global Warming 'Crisis'. So it is instructive to go back and revisit Y2K. I'll do that via a blog by Robert X. Cringley. He has no intention to make comparisons to "global warming" but I find all doom-and-gloom fanatics run on the same hysteria, so it is useful to compare one 'crisis' with another:
Tonight marks the 10th anniversary of Y2K, so I’m using it as an excuse to look back at lessons learned and not learned from that experience. The greatest lessons had to do with psychology, not technology.

Y2K was no surprise to me. I wrote a chapter on it in my book Accidental Empires back in 1991 — fully nine years before the actual deadline. To my knowledge that was the first in-depth explanation of Y2K in the mass media. I explained how the problem came to be, how it could be solved, and predicted that doing so would cost a lot of money and force a transition on the way corporations and governments used technology.

In early 1999 someone at PBS came up with the bright idea that I do a TV special about Y2K to run that October, setting audience expectations about what was to come. Going into that project I remember the producers expected it to be about all the stuff that was likely to go wrong. After all, I had written eight years before that we were in peril. But when I jumped into the research in 1999 I found that Y2K remediation, as it was called, seemed to be going well. I also found that systems weren’t as inter-connected or dependent as many of us had thought — that the world simply wasn’t as much at risk as we feared. I had to fight for this position, but ultimately that was the more conservative story we told two months before the actual event. And we were right.

PBS, to its credit, was the only U. S. television network with the guts to do such a show in primetime or anytime. We took a position — a controversial one it turned out — and justified it with research. Other networks preferred to play the doom card over and over again.

Y2K remediation cost $50-100 billion for the U. S. alone. Probably half of that money would have been spent on IT improvements anyway, but an extra 25-50 billion 1999 dollars is still a lot of dough. Much of it was spent on Y2K-related issues but a lot of it was spent on this-and-that. Y2K was such an arcane problem and so far above the heads of typical CEOs that it was viewed by IT departments as a chance to buy all the cool stuff they never could before. A lot of cool stuff was bought on top of all the other cool stuff being bought because this was also the time of the dot-com Internet Bubble.

I have wondered how much of the economic downturn in 2000 and 2001 – the collapse of the Internet Bubble — was actually due to the passage of Y2K with its excessive IT purchasing and labor costs.

While making that TV special I spent weeks interviewing experts and self-proclaimed experts including survivalists. What I learned then was a story that I don’t think ever really came out. It consists of three parts:

1) Desire: the people warning the loudest about Y2K, those hoarding lentils and suggesting the end of the world was coming, really wanted to be right. They not only thought Y2K was going to be a disaster, they wanted it to be a disaster.

2) Paranoia: the people who were so upset about Y2K — the survivalists and others who headed to the mountains and other sparsely-populated areas — didn’t go to the country because they thought the cities would collapse. They thought the rule of law would collapse and there would be Mad Maxian mass civil unrest. And all that unrest would be aimed squarely at them — the arrogant and narcissistic survivalist leaders. They just assumed that all the other folks who stupidly hadn’t been hoarding lentils would want their lentils and would be coming for them, possibly armed. They expected that Y2K would not only delay Social Security checks, it would lead to armed insurrection aimed at they and their lentils. I am not making this up.

3) Disappointment: When the worst didn’t happen and these same folks found themselves in the middle nowhere with half a ton of lentils, they were disappointed the world hadn’t fallen apart after all. Some of those people still haven’t recovered.

When Y2K: The Winter of Our Disconnect? aired that October (pre-Y2K), it produced the greatest e-mail response of any show I ever made — almost 3,000 messages in the first week. Most of those messages were negative, some extremely so. Many viewers saw me as irresponsible. They claimed that my irresponsible actions would lead to the deaths of hundreds — perhaps thousands — of PBS viewers, lulled into inaction by my false reassurances. Some viewers said I deserved to die for making the show. A few suggested they would kill me themselves.
I see the same 'desire', 'paranoia', and 'disappointment' among the fanatics running around with their hair on fire about "global warming". Humankind manages to blunder through all the great apocalypses that the prophets try selling to us. This will be just another.

Thoughts for the New Year

Here are some questions raised by Dave Johnson on the Blog for Our Future web site:
It is possible that there is going to be a “deficit commission” to look for ways to reduce our country’s budget deficits. I have some questions for them to ask to help get things started in the right direction:

1) President Reagan increased Social Security taxes, but used that money to cut the very top tax rates that only the wealthiest pay. Now that the money borrowed from Social Security is coming due, which income group is better positioned to pay it back, wealthy people or the elderly to whom this money is owed?

2) President Clinton left office with a huge budget surplus. Then, President Bush gave tax cuts to the wealthy, and his last budget had a $1.4 trillion deficit. How much of this change was because of those tax cuts for the rich?

3) How large was the country’s yearly budget deficit and total debt in the “Eisenhower/Truman” decades when the top tax rate was 90%?

4) Today we have an “infrastructure deficit” – the amount needed to repair our country’s roads, bridges, sewers, etc. – of somewhere upwards of $1.6 trillion. Was our infrastructure kept in good repair before the top tax rates were cut?

5) Concentration of wealth is long recognized as a threat to democracy, and now we are seeing a low-wage, everything-to-the-top economy with the greatest ever concentration of wealth going to a few at the top. Was the problem of wealth concentration increasing or decreasing before the top tax rates were cut?

6) When top rates were high people couldn’t take home vast fortunes in a single year. When it took several years to make a fortune did corporations depend on long-term or short-term thinking? Did the executives of corporations care if the infrastructure and communities their companies depended on were in good shape? Did large corporations fleece customers and exploit employees for quarterly returns as they do now?

7) The military budget is the largest item in our country’s budget. Was the military budget larger or smaller when we faced the cold war threat from the Soviet Empire?

8) Just how big is our military budget, if you add in veterans programs, nukes, intelligence and the military budget’s share of accumulated debt interest? How large is it in relation to all of the rest of the countries in the world, combined?

9) Speaking of debt interest, how much debt interest do we pay on the debt that has added up since we cut tax rates at the top? Who gets all that interest?

10) Some will say that proposals to bring back the tax rates of the Eisenhower administration are “socialist.” What was the name of the organization that accused President Eisenhower of being a Communist?
My rule of thumb is pretty simple. You pay taxes if you want to live in a civilized country. If you want to live in the apocalyptic Mad Max wasteland, you don't want to pay taxes and you want to eliminate government. There are two political parties in the US. Which one is working hard to bring the Mad Max horror story to America?

Security Forces Mobilize to the Threat

Rather than put resources into finding actual terrorist, the behemoth TSA has decided to throw all its resources into unearthing the source of a leaked memo sent to 26,000 agencies, corporations, and individuals around the world (including Saudia Arabia, you know, the place from which 19 of the original terrorist came from). Obviously TSA believes that when you send something to your closest 26,000 "friends" it should be kept a secret.

Here's a bit from the NY Times article "TSA Subpoenas Bloggers, Demands Names of Sources":
As the government reviews how an alleged terrorist was able to bring a bomb onto a U.S.-bound plane and try to blow it up on Christmas Day, the Transportation Security Administration is going after bloggers who wrote about a directive to increase security after the incident.

TSA special agents served subpoenas to travel bloggers Steve Frischling and Chris Elliott, demanding that they reveal who leaked the security directive to them. The government says the directive was not supposed to be disclosed to the public.

Frischling said he met with two TSA special agents Tuesday night at his Connecticut home for about three hours and again on Wednesday morning when he was forced to hand over his lap top computer. Frischling said the agents threatened to interfere with his contract to write a blog for KLM Royal Dutch Airlines if he didn't cooperate and provide the name of the person who leaked the memo.

''It literally showed up in my box,'' Frischling told The Associated Press. ''I do not know who it came from.'' He said he provided the agents a signed statement to that effect.
My humble opinion is that the half dozen steet agents and 40 or 50 backroom agents would be better applied sifting through intelligence to connect the dots, like 'Nigerian' trained by al Qaeda, Nigerian father tells US Embassy his son has gone rogue fundamentalist, and Umar Farouk Abdulmutallab granted a US Visa but the UK deems him too dangerous to grant a visa.

Oh no! The US authorities are too smart to waste time connecting dots when they can be out harrassing bloggers release such dangerous items as the new flying restrictions. Yeah, those terrorists would never figure out that the restrictions might be tightened! Why waste time connecting dots when you can be beating up on innocent third parties! Meanwhile, Obama gets in front of the microphones and announces he wants all of his agencies to cooperate and connect the dots. Obviously the TSA hasn't yet gotten that Obama memo. Any guesses how many years it will take for TSA to read the memo?

I remember watching the Keystone Kops when I was a kid. Now I get free entertainment watching the alphabet soup agencies in the US outdo the comedy favourites!

The fact that Obama can be outraged with this agencies (TSA, CIA, FBI, NSA, DHS, etc., etc.) for failing to connect the dots and at the same time watch agencies that should be busy connecting dots go after innocent third parties speaks volumes for the idiocy that passes for a government in the good old US of A.

How Not to Run a Research Program

Here's an article in Wired News that highlights the idiocy in US administrations. They think research is a spigot to be turned on and off. But real research is built slowly and cummulatively. When you stop it, you lose your research teams and the acquired expertise is tossed to the winds.
For nearly 20 years, a government laboratory built a living, respiring library of carefully collected organisms in search of something that could grow quickly while producing something precious: oil.

But now that collection has largely been lost.

National Renewable Energy Laboratory scientists found and isolated around 3,000 species algae from construction ditches, seasonal desert ponds and briny mashes across the country in a major bioprospecting effort to find the best organisms to convert sunlight and carbon dioxide into fuel for cars.

Despite meager funding, the Aquatic Species Program (.pdf), initiated under President Jimmy Carter, laid the scientific foundation for making diesel-like fuel from the fat that microscopic algae accumulate in their cells. Fifty-one varieties were carefully characterized as potential high-value strains, but fewer than half of those remain.

“Just when they started to succeed is when the plug got pulled,” said phycologist Jeff Johansen of John Carroll University, who collected algal strains for the program in the 1980s. “We were growing them in ponds and we were going to grow enough to have them made into a diesel fuel.”

The program was part of the huge investment that Jimmy Carter made into alternative energy in the late 1970s. All kinds of research avenues were explored, but when the funding shriveled during later years, knowledge, experts and know-how were lost. The setback highlights the problems created by inconsistent funding for energy research. Now, President Obama has trumpeted the American Recovery and Reinvestment Act, also known as the stimulus package, as the largest increase in scientific research funding in history. Scientists roundly applauded the billions of dollars that went into energy research, development and deployment. But what about when the stimulus money runs out in two years?
Meanwhile, large energy corporations like Exxon have now launched their own research into algae-based biofuels. I'm willing to bet they will invest consistently and reap the rewards. I'm not against private enterprise commercializing research. What I'm against is government money inconsistently creating and abandoning research programs and thereby wasting the money. You have the Republicans to thank for this waste of taxpayer dollars (e.g. see here for story on staff reduction by 32 in 2006 under Bush admininstration). Here's the judgement of Wired News:
The neglect of the Aquatic Species Program and subsequent resurgence of algal biofuel interest is one of many examples that show that the lack of coherent, consistent energy policy has left the world’s most oil-dependent nation scrambling in times of crisis.

Johansen even went so far as to say that “if the Reagan and Bush administrations had not ended” the growth of the algal biofuels program, our country would have algal biofuels now.

Wednesday, December 30, 2009

How to Handle Wall Street

Here's a viewpoint by Edward L. Glaeser, a Harvard economics prof, published in the Boston Globe:
IN THE 1912 presidential election, Woodrow Wilson fought for a “New Freedom’’ and favored breaking up over-mighty businesses. One of his opponents, Theodore Roosevelt, wanted a “New Nationalism,’’ where big business would be controlled by robust regulation and a powerful public sector. Today, America is again faced with the Morton’s Fork of either regulating or dismantling financial firms that are “too big to fail.’’ For Rooseveltian regulators to succeed, they need enough information to restrain excessive risk-taking and that requires a system where financial firms reveal each other’s risks.

In the halcyon days before 2007, libertarians could argue that financial failures impose few social costs, so there was little point to either regulation or size limits. But the wrenching market turmoil that followed Lehman Brothers’s collapse shattered that illusion. The bailouts that ensued showed that taxpayer dollars would be used to stop failures of financial firms. However, it is a bad idea to have unregulated firms betting with taxpayers’ money.

Alan Greenspan, former chairman of the Federal Reserve Board, recently said that if financial firms are “too big to fail, then they’re too big’’ and suggested that they may need to be split up the way Standard Oil was split up in 1911. His reasonable view is that only the threat of failure can discipline financial firms. Other new Wilsonians have correctly emphasized that sophisticated firms will game any regulations.

But bank-busting won’t solve the problems. Lehman Brothers was no giant, and the government bailed out even the smaller Bear Stearns. Since the public sector seems unable to let even modestly-sized financial firms go belly up, hard limits on their growth will restrict creative expansion and the gains from diversification without reducing the need for regulation.

In an ideal world, the government would differentiate between entities that would receive public support under a limited set of circumstances and unprotected firms that would never be bailed out. These smaller, unprotected entities could be lightly regulated and would enjoy the advantages that accrue from unfettered innovation. The harder question is how to limit inordinate risk-taking by the protected financial firms, especially given the difficulties in evaluating the risk in their portfolios. Ideally, bigger firms that enjoy some sort of public guarantee should pay a “public insurance premium,’’ which would be a function of capital levels and risk.


Mistakes will still be made but forcing every financial firm to be small won’t solve everything. Better regulation is the best way forward, and effective regulation depends upon the information flows that come from a system where these firms inform on each other and work for the rest of us.
If this vaguely reminds you of the FDR-era FDIC, that's because this recognizes that society has a right to regulate if they are the victims of somebody else's risk-taking. Funny... these same economists were busy arguing over the last 30 years when right wing monetarist theories (and libertarianism) was rampant that 'the only good government is no government'. At least Alan Greenspan has said "I was wrong". The whole raft of economists should be doing a mea culpa and either shut up or start putting forward recommendations for re-regulating the economy.

At least Glaeser is now talking 'light regulation' instead of 'no regulation'. And now he's willing to admit that the 'too big to fail' financial institions must be closely regulated.

Stiglitz on the Economy

Here's Joseph Stiglitz, Nobel Laureate in Economics, who has proved himself more interested in the average American than in the fat cat elite in America. He is giving testimony on Dec 10, 2009 in a Joint Economic Committee hearing (i.e. before Representatives & Senators):

If you go to this page you can access the PDF document with the full content of Stiglitz's written testimony. Here's one bit of his testimony that I think is key:
We are a rich country. We can afford to squander hundreds of billions of dollars. But there are limits for even a rich country. The combined effects of unbridled spending on unproductive wars, on corporate welfare, and on poorly designed bank bailouts inevitably will exert their toll. But when these effects are compounded by macro-economic mismanagement, leading to an economy operating for years below its potential, the consequences are even more worrisome.

This crisis has put to the test our economy and our political system. Financial institutions are essential to the well-functioning of any economy. Our financial system didn’t function as it should have, and we have all suffered. But this is not the first time that our banks have had to be bailed out. It has happened repeatedly. The S&L bailout was the last large bailout of American banks because of bad lending here at home, but the myriad of bailouts abroad, with names like the Mexican, Indonesian, Korean, Thai, Brazilian, Argentinean, Russian bailouts, were all bailouts of American banks arising from their failure to assess creditworthiness. We should not forget that. The only period in history when there were no banking crises was the short period after the Great Depression, before the deregulatory movement that began in the late 70s and early 80s.

We have seen how important trust is to the functioning of a financial system. Financial institutions lost trust in each other, and our credit system froze. We all understand the basic reasons for the failures, including lack of transparency, excessive leverage and risk taking, and a misalignment of private rewards and social returns. Unfortunately, to too large an extent the rescue has been marked by much of the same. There has been a lack of transparency and a socializing of losses and risk, combined with privatizing of returns and profits, what I call ersatz capitalism. I am a strong believer in the virtues of a market economy; I know of no economist who believes that this new ersatz capitalism is likely to produce an efficient, dynamic, or fair economy. As we went about the rescue, we had no vision of what kind of a financial sector or what kind of economy we wanted to emerge after the crisis. We cannot and we should not go back to the world of 2007. Our financial sector was bloated and distorted. It will have to be downsized. But the question is, what parts should be downsized? We should be strengthening the venture capital firms and the banks that lend to small and medium sized banks.

Many in the public have sensed that something went awry in the rescue. They have seen their jobs and wealth destroyed while some in the financial sector walk away with huge bonuses. The financial sector has lost the trust of the American people, but now, there is a risk that government too will lose that trust. Active programs to promote jobs and to regulate effectively the financial sector are important steps in restoring that trust.
Sadly Stiglitz is like an old time prophet wandering in the wilderness. His voice is 'heard' but not heeded. This is a great tragedy, especially for the 99% of the population who are not in the elite strata with its stranglehold on power.

How to Buy the Government You Want

Here is an IMF (International Monetary Fund) report on corruption in the United States (anybody out there remember the howls of 'culture of corruption' when East Asia had their meltdown in 1998?). Here's the American version of a culture of corruption. This is the abstract of the report:
Has lobbying by financial institutions contributed to the financial crisis? This paper uses detailed information on financial institutions’ lobbying and their mortgage lending activities to answer this question. We find that, during 2000-07, lenders lobbying more intensively on specific issues related to mortgage lending (such as consumer protection laws) and securitization (i) originated mortgages with higher loan-to-income ratios, (ii) securitized a faster growing proportion of their loans, and (iii) had faster growing loan portfolios. Ex-post, delinquency rates are higher in areas where lobbying lenders’ mortgage lending grew faster. These lenders also experienced negative abnormal stock returns during key events of the crisis. The findings are robust to (i) falsification tests using information on lobbying activities on financial sector issues unrelated to mortgage lending, (ii) instrumental variables strategies, and (iii) a difference-in-difference approach based on state-level lending laws. These results suggest that lobbying may be linked to lenders expecting special treatments from policymakers, allowing them to engage in riskier lending behavior.
All of the above is blank economists jargon for greed, corruption, and malfeasance at the highest levels.

For those who prefer pictures to words, here is a graphic showing rampant corruption under the Bush administration:

Did the economy grow by 30+% over these 7 years? Nope. But the bribes used to buy politicians sure grew! While the average worker slogged through another decade with no real rise in the standard of living, the fat cats were in a frenzy buying and selling politicians. At least that was a "growth economy"!

The Way the World Works

Here's a good short analysis of why the government has to bail out the fat cats who cause the current recession/depression. This is a piece by Brad DeLong for Project Syndicate:
Perhaps the best way to view a financial crisis is to look at it as a collapse in the risk tolerance of investors in private financial markets. Maybe the collapse stems from lousy internal controls in financial firms that, swaddled by implicit government guarantees, lavish their employees with enormous rewards for risky behavior. Or perhaps a long run of good fortune has left the financial market dominated by cockeyed optimists, who have finally figured that out. Or perhaps it stems simply from unreasoning panic.

Whatever the cause, when the risk tolerance of the market crashes, so do prices of risky financial assets. Everybody knows that there are immense unrealized losses in financial assets, but no one is sure that they know where those losses are. To buy – or even to hold – risky assets in such a situation is a recipe for financial disaster. So is buying or holding equity in firms that may be holding risky assets, regardless of how “safe” a firm’s stock was previously thought to be.

This crash in prices of risky financial assets would not overly concern the rest of us were it not for the havoc that it has wrought on the price system, which is sending a peculiar message to the real economy. The price system is saying: shut down risky production activities and don’t undertake any new activities that might be risky.

But there aren’t enough safe, secure, and sound enterprises to absorb all the workers laid off from risky enterprises. And if the decline in nominal wages signals that there is an excess supply of labor, matters only get worse. General deflation eliminates the capital of yet more financial intermediaries, and makes risky an even larger share of assets that had previously been regarded as safe.

Ever since 1825, central banks’ standard response in such situations – except during the Great Depression of the 1930’s – has been the same: raise and support the prices of risky financial assets, and prevent financial markets from sending a signal to the real economy to shut down risky enterprises and eschew risky investments.

This response is understandably controversial, because it rewards those who bet on risky assets, many of whom accepted risk with open eyes and bear some responsibility for causing the crisis. But an effective rescue cannot be done any other way. A policy that leaves owners of risky financial assets impoverished is a policy that shuts down dynamism in the real economy.


It is still true that the banking-sector policies that were undertaken were good – or at least better than doing nothing. But the certainty that matters would have been much worse under a hands-off approach to the financial sector, à la Republican Treasury Secretary Andrew Mellon in 1930-1931, is not concrete enough to alter public perceptions. What is concrete enough are soaring bankers’ bonuses and a real economy that continues to shed jobs.
I agree with DeLong that the government has to prop these suckers up. But what the government can undo is 40 years of right wing propaganda telling us that the overlords of finance are the real smart people (think 'greed is good' by the character Gordon Gekko in the film Wall Street). The government can stop the brainwashing of the past 40 years and support critical thinking about 'finance capital' versus an economy built on producing real goods for real needs with good jobs that pay well. Not the froth of billion dollar bonuses for the 'overlords of finance'.

How Far the Mighty Have Fallen

The bit is from a Reuters' article "Special Report: America's Route to Recovery".
From its peak in 2005 to the second quarter of 2009, U.S. home equity fell 37 percent, or $4.7 trillion, according to the Federal Reserve. To put that into context, China's economic output in 2008 totaled around $4.3 trillion.

By the second quarter of 2009, Americans' total net worth had shrunk 17 percent or $10.7 trillion from its peak in 2007.
The article doesn't really tell me much about 'recovery' but these numbers hammer home the trail of devastation. And this is all from the excessive and fanatical love of Republicans for 'no new taxes' and for 'deregulation' and for a view that 'government is the source of all your problems'. This is a barbarians view of 'society' and those who have sewn the wind have reaped the whirlwind. Tragically, they have taken the other 300 million Americans with them, and a good part of the the other 6 billion people on this planet who didn't as to be taken on the 'ride'.

Dowd Takes Down Obama

Here's a bit from a Maureen Dowd NY Times op-ed in which he punches holes in Obama's pretend to be competent administration:
President Obama’s favorite word is “unprecedented,” as Carol Lee of Politico pointed out. Yet he often seems mired in the past as well, letting his hallmark legislation get loaded up with old-school bribes and pork; surrounding himself with Clintonites; continuing the Bushies’ penchant for secrecy and expansive executive privilege; doubling down in Afghanistan while acting as though he’s getting out; and failing to capitalize on snazzy new technology while agencies thumb through printouts and continue their old turf battles.

Even before a Nigerian with Al Qaeda links tried to blow up a Northwest Airlines jet headed to Detroit, travelers could see we had made no progress toward a technologically wondrous Philip K. Dick universe.

We seemed to still be behind the curve and reactive, patting down grannies and 5-year-olds, confiscating snow globes and lip glosses.

Instead of modernity, we have airports where security is so retro that taking away pillows and blankies and bathroom breaks counts as a great leap forward.
There's lots more. Go read the full article. You don't want to miss choice bits like:
If we can’t catch a Nigerian with a powerful explosive powder in his oddly feminine-looking underpants and a syringe full of acid, a man whose own father had alerted the U.S. Embassy in Nigeria, a traveler whose ticket was paid for in cash and who didn’t check bags, whose visa renewal had been denied by the British, who had studied Arabic in Al Qaeda sanctuary Yemen, whose name was on a counterterrorism watch list, who can we catch?
And this:
Just because Republicans helped lead the ban on better technology and opposed airport security spending doesn’t mean they’ll stop Cheneying the Democrats for subverting national security.
What I can't belive is that fully 40% of Americans has no memory of how bad the Bush era was and how it set up all the failures now experienced. Nobody seems to notice that Republicans have hamstrung organizations like TSA because they refuse to approve the Obama appointee to run the agency. (Gee... if the Republicans hold out for another 36 months, the TSA will have lasted through the complete Obama years without anybody at the helm because Republicans are scared that the appointee might -- might! -- allow unionization among TSA staff. How's that for showing how 'patriotic' the Republicans truly are.)

Krugman on Death and Taxes

This is so bad it is funny...
Stop, you’re killing me

Eight and a half years ago, when I dubbed the first Bush tax cut the Throw Momma from the Train Act of 2001, I didn’t really think that we’d get to the point where there would be strong financial incentives for wealthy heirs to bump off their parents before the legislation expired, and the estate tax was reinstated. I expected one of two things to happen: Democrats would restore a sensible estate tax, or Republicans would achieve the political dominance needed to permanently abolish the tax. As John Belushi would have said, however, But NOOOOO. Instead, it’s really happening.

Just to be clear, the source of this craziness is fiscal fraud: way back when, the Bush team used sunsets that were never intended to take effect in order to hold down the official cost of their tax cuts. Their assumption was that at a later date they’d be able to make the thing permanent.

And let’s also be clear: they should not get their way now that the upper hand is on the other foot. Estate taxes can and should be a significant source of revenue, which is badly needed. If Dems can get Republicans to agree to a higher minimum, OK; otherwise, just let the Bush tax cut expire.
Go read the original in order to follow the links as well as watch the excellent Monty Python piece that Krugman uses to introduce this posting!

I find it astonishing that one-third of Americans still haven't figured out that Bush was the absolute worst US president in history, even worse than Warren G. Harding another Republican sleazeball up to his elbows in slime.

The Tricks of Mother Nature

I got a chuckle out of this posting by Anthony Watts on his Watts Up With That? web site. I've bolded the key bit:
In the last month, the Arctic Oscillation Index (AO) has gone strongly negative. You can see that it headed to its negative peak right about the time the Copenhagen Climate Conference started, so it is no wonder that they ironically experienced cold and snow there. It is also a setup for the record snow and cold Canada and the USA has seen recently.
Go read the posting, it is full of interesting facts about large scale systems that are set up to give us cold weather.

And things are only getting set up for more cold weather as cited in this other post:
Cold event setups in atmospheric circulation patterns are aligning. Two days ago I brought to your attention that there was a strong downspike in the Arctic Oscillation Index and that the North Atlantic Oscillation Index was also negative. See The Arctic Oscillation Index goes strongly negative

Yesterday, Senior AccuWeather meteorologist Joe Bastardi let loose with this stunning prediction on the AccuWeather premium web site via Brett Anderson’s Global warming blog:
What is facing the major population centers of the northern hemisphere is unlike anything that we have seen since the global warming debate got to the absurd level it is now, which essentially has been there is no doubt about all this. For cold of a variety not seen in over 25 years in a large scale is about to engulf the major energy consuming areas of the northern Hemisphere. The first 15 days of the opening of the New Year will be the coldest, population weighted, north of 30 north world wide in over 25 years in my opinion.
The Climate Prediction Center discussion for their forecast also concurs with both of the above:
Go to the Anthony Watts posting to see the pictures to understand the cold weather projection.

Tuesday, December 29, 2009

'Civilized' Iran

This is the Iran that Ahmadinejad has created... a society ruled by thugs who drive over people to kill them in the streets...

Good News from Energy

Geoffrey Styles' blog Energy Outlook reviews the energy news from 2009. It ends with this positive note, a note of compromise and realism, a step back from hysterical doom-and-gloom while being pragmatic and exercising a modest precautionary principle:
Neither Copenhagen nor Climategate spells the end of action on climate change, but they might just mark a turning point toward a more pragmatic and less dogmatic set of responses, perhaps along the lines of a compromise being floated in the US Senate that would consider the contributions of all forms of energy to a more secure energy future with lower emissions. That aligns with the gradual replacement of a narrative of oil scarcity by one of natural gas abundance and the deft use of renewables, with a much stronger emphasis on efficiency and conservation, which still look like the low-hanging fruit for both energy security and climate change.
Now... if only more people step down from their soapboxes and look realistically at things with an eye to cost/benefit and jobs and the well being of working people, then maybe a corner has been turned and the future will be better.

Carl Zimmer Lectures on Flu

Here is a very nice lecture by Carl Zimmer on evolution with a focus on what Darwin didn't know, specifically about flu and how flu evolves. This was a talk given at the University of British Columbia in November 2009. Learn about this years H1N1 or last years "bird flu", the H5N1.

Fascinating stuff, take a look...

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:

Part 6:

Security Theatre

Here is Barack Obama speaking:
A full investigation has been launched into this attempted act of terrorism and we will not rest until we find all who were involved and hold them accountable.
Here is George Bush speaking:
I want justice. And there's an old poster out West, I recall, that says, "Wanted: Dead or Alive.
I'm so tired of US presidents posturing in front of the cameras claiming they are going to move heaven and earth to get the "bad guys" when in fact they spend billions on "security theatre" and unnecessary wars. The whole thing is a joke. I had expected something better from Obama, but it looks like he is just another tin horn sheriff who poses for the cameras boasting he is going to "get" the bad guys. Instead of words, what the world needs is steely determination, consistent effort over time, and speaking through action not words.

As for the Detroit airplane terrorist:

All the screening, lists, pat downs, metal detectors, bag checking, etc. are a joke. Umar Farouk Abdul Mutallab flew from Lago Nigeria through the Schiphol airport in Amsterdam on to Detroit.

Guess which international airport was the first to have the millimeter wave scanners? From
Three security scanners using millimeter waves were put into use at Schiphol Airport in Amsterdam on 15 May 2007, with more expected to be installed later. The passenger's head is masked from the view of the security personnel.
So all this expensive high tech gadgetry is useless. Sure the millimeter wave scanner sees through clothes, but ultimately it is a human being watching the imagery and if they fall asleep or don't recognize what they see, the whole system is useless. The big machine become a "show" to convince people that the government is serious about terrorism. Well... it doesn't work. This guy came right through the screening!

Update 2009dec30: Here is a bit from an essay by Bruce Schneier:
Terrorism is rare, far rarer than many people think. It's rare because very few people want to commit acts of terrorism, and executing a terrorist plot is much harder than television makes it appear.

The best defenses against terrorism are largely invisible: investigation, intelligence, and emergency response. But even these are less effective at keeping us safe than our social and political policies, both at home and abroad. However, our elected leaders don't think this way: They are far more likely to implement security theater against movie-plot threats.


"Security theater" refers to security measures that make people feel more secure without doing anything to actually improve their security. An example: the photo ID checks that have sprung up in office buildings. No one has ever explained why verifying that someone has a photo ID provides any actual security, but it looks like security to have a uniformed guard-for-hire looking at ID cards.

Monday, December 28, 2009

Why Obama is Failing

Here's a pretty good analysis of why Obama is falling in the polls. He has an "economic team" that is failing and Obama is not smart enough to realize they are getting into trouble, so he keeps backing them rather than firing them and getting in advisors and staff who can help him effectively address the real economic woes of the the country: jobs, a cratering housing market and commercial real estate market, and a credit crunch that keeps 90% of the businesses in America stuck. Here are some key bits from the Bloomberg News report by Albert Hunt:
A year ago, the expectation was that President-elect Barack Obama’s economic team would be a smooth- functioning machine, and the outlook was for turbulence in the national-security arena.


Two recent anecdotes illustrate this problem. On Dec. 2, as Obama prepared to give a major economic speech at the Brookings Institution on Dec. 8 (and a day after his Afghanistan speech at West Point) he met with policy makers. He heard a familiar reprise of the previous several meetings with budget director Peter Orszag arguing for more emphasis on reducing the deficit and Council of Economic Advisers chief Christina Romer leading the contingent espousing a greater short-term stress on jobs.

The president, by his standards, exploded. “Why are we having this meeting again, the same discussion,” participants quoted him as saying.

Several administration insiders, prominent outside Democratic economic advisers and a few Congressional heavyweights, all worry this is symptomatic of a process that isn’t working well. Summers, they argue, is brilliant on policy and ill-suited for a high-level staff job, which is what the head of the National Economic Council is.

“If you came up with 10 words to describe Larry, coordination and collaboration would not be two,” says one person requesting anonymity who has worked with Summers extensively and admires his intellectual force.


The other problem, an inability to effectively communicate an economic policy, was typified in a Dec. 4 interview with Geithner, who was asked what is the “clear, coherent economic message” of the administration.

He proceeded to talk about “high-class education” for children, affordable health care, better incentives for energy and infrastructure, public-private arrangements and the like.

There are 15.4 million unemployed Americans and another 11.5 million “underemployed,” either having given up looking and thus not counted in the jobless numbers or involuntarily relegated to part-time work. A laundry list of the Democrats’ agenda is unlikely to prove comforting.

Geithner, who wins praise from Obama and others for his substantive performance after a shaky start and some more recent cheap political shots, acknowledges that public communications isn’t his forte. It isn’t Summers’ either. And those who are more effective, including Roemer and fellow Council of Economic Advisers member Austan Goolsbee, sometimes are cut out of the action.

The result: On the economy, Americans are losing confidence in the president, who gets little credit for policies that avoided an economic calamity and are starting to turn things around. In a survey by pollster Ann Selzer a few weeks ago for Bloomberg News, voters by 50 percent to 45 percent disapprove of Obama’s performance on the economy; the numbers were worse on handling the budget deficit and dealing with Wall Street.
Twelve months is more than enough time for a "fast learner" like Obama to catch on that he has signed up some real duds for economic "advisers". He should can Larry Summers and Timothy Geithner. The fact that he hasn't and appears that he won't is why I've really soured on the guy. He has shown himself inept in managing Congress, he gave away the ranch to try and woo Republicans on health care and got nothing, and his economic "team" is useless. When will Obama wake up that his "Change You Can Believe In" is a complete mess. When will he recognize that over 10% unemployment is unacceptable? When will he recognize that he is digging a grave for himself in Afghanistan by sending in more troops?

I've lost all confidence in the guy. I'm ready for a guy at side stage to send out the hook and yank Obama off the stage. The American voters need to send in a new team in 2010 and 2012. (But please, please don't send the Republicans back into power! Those guys are far worse than Obama!)

Incompetence in Obama's Administration

I hear the jungle drums... the jungle telegraph is building... it is furious at the incompetence of people around Obama...

The latest outrage is the idiocy of how Janet Napolitano has handled the Nigerian terrorist who tried to blow up the Detroit-bound plane (aka, the "crotchbomber"). Here's a posting by Joel Johnson on Gizmodo that nails the idiocy of the "security theatre" that the US is spending big bucks on to fool people into thinking that TSA and DHS are "doing something":
Today, DHS's Napolitano's response to the crotchbomber: "We're looking to make sure that this sort of incident cannot recur." But the TSA's response to Abdulmutalib's attempt makes one thing clear: We must stop pretending the TSA is making us safer.

Security expert Bruce Schneier nails the core incompetency: "For years I've been saying 'Only two things have made flying safer [since 9/11]: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.'"

So what has the TSA done in response to the attempted attack? They've told airlines to make passengers stay in their seats during the last hour of flight. They've made it verboten for passengers to hold anything in their laps, again only during the last hour of flight. Perhaps most hilariously telling, they've forbidden pilots from announcing when a plane is flying over certain cities and landmarks.

There is no other way to interpret it: The TSA is saying clearly that they can't prevent terrorists from getting explosives on airplanes, but by god, they'll make sure those planes only explode when the TSA says it's okay.

I want our government to prevent terrorism and to make flights safer. But we are spending billions of dollars and man-hours to fight a threat that is less likely to kill a traveler than being struck by lightning. In the last decade, according to statistician Nate Silver, there has been "one terrorist incident per 11,569,297,667 miles flown [the] equivalent to 1,459,664 trips around the diameter of the Earth, 24,218 round trips to the Moon, or two round trips to Neptune." (Sadly, this does mean that in the future we can expect one out of every two round-trip flights to Neptune to be hijacked.)

The TSA isn't saving lives. We, the passengers, are saving our own. Since its inception, the TSA has been structured in such a way as to prevent specific terror scenarios, attempting to disrupt a handful of insanely specific tactics, while continuing to disenfranchise and demoralize the citizens who are actually doing the work that a billion-dollar government agency—an agency that received an additional $128 million just this year for new checkpoint explosive screening technology—has failed to do.

We just had the first legitimate attempted attack in years, and the TSA changes the threat level from orange.

This goes far beyond simple customer satisfaction issues like "Take Back Takeoff." (Although they are of a kind.) It has to do with wildly irrationally response of a government agency in the face of failure. An agency whose leader, Secretary of Homeland Security Janet Napolitano, said at first blush that the attempted attack showed that—here comes the Katrina-class foot-in-mouth—"the system worked." (She shoveled shit in her mouth this morning, while still talking up the asinine new measures that the TSA will be taking to respond to this isolated threat.)

I don't want to die on an airplane. I don't want to die in my home while eating an organic bagel infested with parasites that lay eggs on my liver. I don't want to die from starvation or bad water or a thousand other things that I pay our government to monitor and regulate.

But I also don't expect the government to protect from the literally endless possibilities and threats that could occur at any point to end my life or the life of the few I love. It's been nearly a decade since terrorists used airplanes to attack our country, and last week's attempt makes it clear that the lack of terrorist attacks have nothing to do with the increasing gauntlet of whirring machines, friskings, and arbitrary bureaucratic provisions, but simply that for the most part, there just aren't that many terrorists trying to blow up planes. Because god knows if there were, the TSA isn't capable of stopping them. We're just one bad burrito away from the TSA forcing passengers to choke back an Imodium and a Xanax before being hogtied to our seats.

President Obama, don't let this attack—this one attack that was thankfully stopped by smart, fearless passengers and airline staff—take us further in the wrong direction. I don't think I'm alone in feeling this way. Americans of all stripes and affiliation standing up to say, "This isn't working. We gave you our money. You're not making us safer." We appreciate the attempt to make us safer and acknowledge that it came from an honest attempt to protect American (and the rest of the world's) lives.

But it's a failure. It's wrongheaded. It's a farce. Tear it down. Put the money towards the sort of actions at which our government excels, like intelligence. The failure of the TSA leaves us no choice, but it's okay. The American people are ready to take back the responsibility for our own safety. Really, we already have.
What I find bizarre is the knee-jerk over-reaction after the fact, the automatic rush to close the barn door after the horses have run off. The news from here was that US border guards have "heightened security" so the normal 15 minute line-up to cross land borders from Canada into the US have turned into three hour nightmares. This is insane! Now is probably the safest the borders will be in weeks since the only known attack has fizzled. But rather than celebrate the merciful takedown of a terrorist nutcase, the US bureaucracy has geared up with a new level of insanity. The terrorists win if you shut down your economy and close the windows and stop rubbing elbows with your neighbors. But that is the direction in which Obama (following the "sterling" example of Bush) is currently following.

The Shabby Degradation of American Science

You can tell when an elite is losing its grip. The stylish elites start to slip and look a little shabby. Science in the US is showing the same symptoms. Here's a graph from a posting by K. Eric Drexler in his blog Metamodern:

Notice how the age of researchers has gotten steadily older. Opportunities for younger researchers have been squeezed out. As an extra jab, Drexler notes the age at which Darwin did his foundational research. He barely fits on the graph. He wouldn't have been funded by NIH.

If I were an American citizen I would be rattling the chains of the public servants -- the President and Congressmen -- telling them they need to light a fire under their research funding and make sure that new blood, fresh blood is getting funded.

View from the Top, Republican Version

I remember when George Bush, the First, was campaigning in 1988 and was bewildered by scanner technology in some store. Bush had always had some flunkie do his shopping, so he had no idea how the real world worked.

Here's the 2009 version of the same ignorance from the elite. Here is Republican Lamar Alexander telling people that the new health reform is broken just like "having a bus that only comes every five minutes".

How can ordinary Americans keep voting in bozos like this? What is the benefit of being ruled by jackasses who have never earned a living and don't understand the real facts of waiting on buses?

Is it any surprise that letting rich idiots run the country means that only the concerns of the rich (think billion dollar bailouts for Wall Street) are ever met by government while the needs of the poor are rejected with a Marie Antoinette "let them eat cake" response?

Health Care in America: A History

Here is the intro from a very review of the recent history of health care by David Warsh in his Economic Principals web site:

State legislatures are indeed “laboratories of democracy,” as Supreme Court Justice Louis Brandeis famously described them a century ago. But it is presidential candidacies that conduct the marketing campaigns for the social policies that governors and legislators devise.

To understand the extraordinary Republican bitterness attendant on Senate passage of the health care bill, it is necessary to remember that the strategy that at last delivered universal health insurance for the United States was devised in Massachusetts in late 2004 by Mitt Romney, a Republican governor in the early stages of seeking his party’s presidential nomination.

The Democrats, jiu-jitsu fashion, turned the initiative to their own advantage, having owned the issue since the Truman administration. In doing so, they achieved a goal that had eluded them for sixty years. The GOP’s conservative wing is correspondingly enraged. Meanwhile, Congressional Republicans cast only a single vote (in the House) for a plan that their would-be standard-bearer devised. Internal storms now threaten to disable the party for many years to come.

Consider how a bipartisan approach devised by middle-of-the-road technocrats for an entrepreneurial Republican became a winning issue for the Democrats and provoked a crisis in the Republican Party.
David Warsh is well worth reading. What I like about this article is the richness of the history and the depth of insight it has on how health care arrived. It is far better than most mainstream articles. This shows you the loss to America as mainstream media has "downsized" and people like David Warsh now sit on the sidelines writing better stuff than the fishwrap peddled by the mainstream.

If you go on to read the whole Warsh article you can see how health care was a deeply bi-partisan issue. Sadly, the Republicans in the US Congress decided to say "nyet" and turn it into a one party policy. That is partisanship at its worst!

Person of the Year

I do believe that The Times has got it right. They have named Neda Soltan as "person of the year"...
Person of the Year

Neda Soltan, killed by a government thug, became a symbol of Iranians’ yearning for democracy and the ruthlessness of a bankrupt regime

Every few years a man, or a woman, whose name is often familiar to few beyond the circle of their family and friends, is ambling through a more or less anonymous life when they find themselves ambushed by history. For many of these people, their life changes forever. Frequently, tragically, it ends; leaving behind an image that haunts the world long after they themselves have gone.

Neda Soltan was such a person, a young beautiful woman who had studied philosophy, was now an aspiring singer, who found herself abruptly catapulted from the crowds of Tehran to become the face of protest against Iran’s repressive rulers; a symbol of rebellion against the fraudulent election that had just returned Mahmoud Ahmedinejad to power.

Like the nameless student who taunted that tank in Tiananmen Square, like Jan Palach, the Czech student who died after setting himself alight in Wenceslas Square in January 1969 to protest against the Soviet-led invasion of Czechoslovakia, Neda Soltan became the icon for the mutiny against Iran’s brutish regime as images of her face, and amateur footage of her murder by a sniper from the pro-government Basij militia, sprinted around the world. Like the photograph taken in South Vietnam of a bewildered young girl, the victim of a napalm attack, running naked down a road; and like the images of those skin-and-bones internees, standing semi-naked in the prison camp run by Bosnian Serb forces in Omarska in 1992, their ribs as prominent as xylophone keys, the image of Neda Soltan lying bleeding on a Tehran street has become the shorthand for the horrors of a conflict. With their beseeching eyes such images become, as the war photographer Don McCullin has pointed out, our modern versions of religious icons.

Their lives end, to make way for legends. ...


Neda Soltan’s last words were: “I’m burning, I’m burning.” Her music teacher, who was by her side when she died, said that Ms Soltan “couldn’t stand the injustice of it. All she wanted was the proper vote of the people to be counted. She wanted to show with her presence that, ‘I’m here, I also voted, and my vote wasn’t counted’.”

It will be an irony that when the regime of Mr Ahmedinejad finally, and deservedly, buckles, it will be Neda Soltan’s phantom vote — not counted in any polling booth — that will have played so pivotal a role in ousting him from power.
Go read the whoe article, there is lots more worth reading.

Right now Iran is in turmoil. Hopefully Neda's life was not shed in vain. (For more details on Neda, go to my previous posting.)

Death Panels

Here is an interesting blog posting on rabies. The words "death panel" jogged me. The writer was making fun of Sarah Palin and the goofy Republican "talking points" machine that worked so hard to defeat health care reform in the US. But the comment on "death panel" points out that we make cost/benefit decisions on life and death every day.

Meanwhile, here's an interesting post on rabies in which I've highlighted the "death panel" comment:
The mysteries of rabies

by Maggie Koerth-Baker

One day, towards the end of summer, I walked into my living room and found my cats playing "Secret CIA Prison" with a bat. He was alive, but just barely. He lay on my floor twitching, his wings torn to Swiss cheese. The cats looked up at me as if to say, "We do good work, yes?" I locked them in the bedroom and called the vet. Fortunately, the cats were all up on their shots. Unfortunately, I couldn't tell the vet how the bat had gotten into the house, nor how long he'd been there.

"You should maybe call your doctor," she said.

On average, 55,000 people worldwide die from rabies every year, but only two or three of those cases happen in the United States, thanks to widespread vaccination of domestic animals and availability of post-bite treatment for humans. Today, when Americans die of rabies, it's usually because they didn't realize they'd been bitten until it was too late—which is to say, when they first noticed symptoms.

See, we know how to prevent rabies, but we have absolutely no idea how to cure it. In fact, we don't even really know how it kills people. Despite (and, perhaps, because of) its status as one of the first viruses to be tamed by a vaccine, rabies remains a little-understood disease.

It's a mystery that makes doctors understandably nervous. Just a week before I found my bat, some friends of mine in St. Paul had woken up to find a bat in their bedroom. Being asleep is one of those times when tiny bat teeth could bite you without you being aware of it. My friends had to get post-exposure prophylaxis, a treatment designed to neutralize any rabies virus in your system before it has a chance to reach your brain and develop into a full-blown infection.
"You think about flu, that's a very quick virus. You develop symptoms in a couple of days. In a week, it's passed. But rabies incubation is very long," said Zhen Fu, DVM Ph.D., professor of pathology in the College of Veterinary Medicine at the University of Georgia. "It may be weeks or even months before you develop an active infection. So we have enough time after a bite to immunize with normal vaccine and bring up the immune system."
That means five doses of vaccine, over the course of 28 days, according the Centers for Disease Control and Prevention. If there's also an obvious bite, doctors will clean the wound and apply rabies antibody serum to the site. The antibodies are basically the key part of a lock-and-key system that tells your immune system to destroy anything the key fits. The idea is that antibodies will help destroy most of the virus at the site of entry, while the vaccine will train your body to knock out any strays it finds elsewhere. The CDC also recommends a shot of antibodies, separate from the vaccine, even if there is no obvious bite.

This one-two punch is almost 100% effective, provided you get it in time. How fast is "in time"? Nobody really knows. The CDC says that, as long as a bite victim isn't yet symptomatic, they should get the prophylaxis. Dr. Fu said that the window of opportunity can vary in length, depending on how close the bite is to the person's central nervous system. Without post-exposure prophylaxis, rabies is fatal. By the time symptoms--fever, confusion, partial paralysis, difficulty swallowing--appear, it's too late. There's not much doctors can do after that, because they aren't even sure what the virus is doing to you.
"We don't know how rabies kills people. There are some unproven hypotheses, but that's it," Dr. Fu said. "One idea is that, once the infection reaches the neurons in the brain, it blocks the transmission of messages from the brain to the rest of the body. If that's the case, it could explain many of the phenomenon we see in humans and animals, such as end-stage paralysis. That could even be why humans die, because of paralysis of muscles in the heart and lungs."
Given the lack of information and the risk of death, it's not surprising that even a situation like mine, where a bite was extremely unlikely, ended with a referral to a nearby hospital for post-exposure prophylaxis. But, after several conversations between the emergency room doctor and the Minnesota state rabies hotline, I ended up not getting it. Turns out, sneak-attack bites don't really happen to wide-awake, sober, cognitively normal adults in the middle of the day. The chance that I or my husband were actually bitten by the bat before the cats set upon it was so small that, on the advice of medical professionals, we decided that it wasn't worth the pain, potential side-effects, or cost of treatment.

That's right. I am my own death panel.

But on the off-chance that I do come down with symptoms—there've been cases of rabies incubating for up to a year—is there really no hope? Well, sort of. Maybe. Ish. Researchers have been experimenting with a treatment that they think could save the lives of people with full-blown rabies. Called the Milwaukee Protocol, it involves putting the patient into a coma and also giving them antiviral medication. The idea is that the human immune system—with some help from antivirals—can fight off a rabies infection, while the coma limits damage to the brain that seems to be a common cause of rabies death. In 2004, a teenage girl who received this treatment became the first person—ever—to survive symptomatic rabies without having received the vaccine either before being bitten, or before symptoms appeared.

The problem: We still don't know whether the Milwaukee Protocol actually works. It's been tried—and failed—at least 13 times since 2004, according to a 2009 paper published in the journal Current Infectious Disease Reports. There are two reported successes, but in one of those the patient received the vaccine before her she became symptomatic. The other success is very recent and there aren't many details available yet.

So why did the first girl survive? Again, nobody knows. It's possible that either she had a particularly hardcore immune system, or the variant of the virus she contracted was particularly weak, or both. When she was diagnosed, she had rabies antibodies in her cerebral spinal fluid—something that would indicate the presence of rabies in her brain—but doctors weren't able to isolate any actual virus—suggesting that her body was already on its way to winning the fight before the Milwaukee Protocol was used.

Unfortunately, any effort to really conquer rabies may be hampered by the fact that the vaccine works so well, Dr. Fu said.
"Treatments haven't been successful because we don't know what it's doing in the brain," he said. "We need more research but, usually, once you have a good vaccine the funding for the research goes away."
New England Journal of Medicine: Survival After Treatment of Rabies With Induction of Coma
Current Infectious Disease Reports: Update on Rabies Diagnosis and Treatment

Mad Dog Dean Baker again Barking Up a Tree

Or so it seems...

Poor Dean Baker has a Sysyphean task. He constantly points out the idiocy in the media and tries to get it to act more responsibly. It is an unending task because the stupidity seems bottomless...
Inventing Budget Crises: Standard Practice at the Washington Post

Ezra Klein has a good piece in the Post's Sunday Outlook section on the need to change the filibuster rules in the Senate. However, he ends the piece with a bizarre reference to: "a coming budget crisis." This should have brought out the editor's red pen and some quick scratch marks.

What budget crisis? The country has an economic crisis,that manifests itself in the form of double-digit unemployment and mass foreclosures. This crisis didn't make the end of article list of concerns.

The economic crisis is causing large budget deficits, but on what universe is the budget a crisis? There is certainly no serious economic problem caused by the these deficits nor any immediate problem for the country's finances, as demonstrated by the low cost of borrowing in financial markets. Obviously, there are long-term budget problems, but these stem from the cost of supporting a broken health care system. And in any case, it is a bit hard to term budget strains that are well more than a decade in the future a "crisis."

So, the "coming budget crisis" is like "the coming attack of Martians," not a line that belongs in a serious newspaper.
I have a diagnosis: right wing nuts worry about budget deficits when Democrats are in power, otherwise, right wing nuts think it is wonderful to cut taxes and run a country on hot air.

When you have 10% unemployment, you are going to have budget deficits if you have any social safety net whatsoever. So the subtext of the Washington Post's concern about "budget deficits" is the perennial concern of the right to cut off any welfare for the poor in favour of a welfare for the rich (as in TARP bailouts).

Security Theatre and the Unwillingness to Admit Error

Here's a posting by Andrew Sullivan on his Atlantic blog site that hits the nail on the head concerning the "security" offered by DHS and TSA (with regard to the Nigerian fanatic who tried to blow up a plane flying into Detroit).
Heckuva Job, Janet

The head of DHS had the gall to say that "the system worked." What she meant is that after the incident in Detroit, the response was good. Fine. But she has no assurance that this could not happen again, and even declared that the would-be terrorist was properly screened.

More to the point, she evinces no sense of responsibility for this lapse in security. I'm sorry but that's her job and instead of preening about how she handled it after the fact, she should be apologizing for yet another instance of government incompetence and complacency. She is stonewalling and smug.

Really: disgraceful, glib, complacent, moronic. I want to know who is being fired for not taking the warning about this ooon seriously enough, and if Napolitano really believes that a near-miss, averted by the terrorist's incompetence and the passengers' courage, is a sign that the system is working, then she needs to be fired as well.

I understand the imperative to remain calm, not give these incidents more media oxygen than they deserve, not responding with hysteria or panic. But this interview went far too far in the opposite direction. She sounded like Brownie during Katrina. I have no confidence in her as head of DHS if this is her attitude. It's reminiscent of the Bush-Cheney years: arrogance and a refusal to take responsibility.
Obama comes across as more intelligent than Bush, but he has the same distracted inability to come to grips with problems, to take responsibility for things, and to act in a timely way. The "Heckova Job Brownie" label -- sadly -- applies to the Obama administration just as it did the Bush administration. The American people deserve better than this.

Sunday, December 27, 2009

Iran in Turmoil

The people of Iran are in the street again trying to throw off the vicious dictatorship. Here is a crowd saving two men being hanged by the government and they end up in a battle of rocks against bullets. Incredible...

Here the crowd has cornered some of the heinous basiji:

Here the crowd has seized a basij vehicle:

and another...

Here is a posting by Stephen M. Walt on the Foreign Policy web site that pretty well gets the situation right and the necessary response right:
I don’t know where the latest unrest in Iran will lead -- and neither does anyone else -- but it seems like the regime is losing whatever legitimacy it had left and may also be losing its capacity to squelch dissent with displays of force. (As before, Andrew Sullivan's Daily Dish has lots of videos and commentary on events there.) The outcome of this sort of challenge is inherently difficult to forecast, as it is nearly impossible to know ex ante when a critical “tipping point” might be reached. At a minimum, the regime has clearly gotten significantly weaker since the contested election last summer.

Here are some cautionary lessons to bear in mind. First, we do not know enough about internal dynamics in Iran to intervene intelligently, and trying to reinforce or support the Green Movement is as likely to hurt them as to help them. So our official position needs to measured and temperate, and to scrupulously avoid any suggestion that we are egging the Greens on or actively backing them with material aid.

Second, this is an especially foolish time to be rattling sabers and threatening military action. Threatening or using force is precisely the sort of external interference that might give the current regime a new lease on life. If you’d like to see a new government in Tehran, in short, we should say relatively little and do almost nothing. I don’t object to making it clear how much the U.S. government deplores the regime’s repressive measures, but this is one of those moment where we ought to say less than we feel.

If you’re looking for a useful historical analogy, think back to the "velvet revolutions" in Eastern Europe. Neoconservatives used to argue that the rapid and mostly peaceful collapse of communism proved that rapid democratic transformations were possible in unlikely settings, and they used that argument to justify trying the same thing in Iraq. (We all know how well that turned out.) In fact, the velvet revolutions were a triumph of slow and patient engagement from a position of strength. The upheavals in Eastern Europe were an indigenous phenomenon and the product of containment, diplomatic engagement, and the slow-but-steady spread of democratic ideals through the Helsinki process and other mechanisms. And the first Bush administration was smart enough to keep its hands off until the demise of communism was irreversible, which is precisely the approach we ought to take toward Iran today.

Finally, as I mentioned a few days ago, we should not assume that a Green triumph in Iran would eliminate all sources of friction between Iran and the West. A new government would probably seek to continue Iran’s nuclear enrichment program and will certainly want a secure (read: superior) position in its own neighborhood. In practice, that means trying to achieve an imbalance of power in its favor, which will make the U.S. uncomfortable. If the clerical regime falls and we continue to insist that Iran stop enriching uranium and conform to our policy preferences, that will convince many Iranians that the United States is irrevocably hostile to their country and not just to the current regime. So I hope somebody in the Obama administration is starting to think about a) what we do if the Green Movement succeeds, b) what we do if it fails, and c) how to keep hawks in the United States and Israel from making things worse.
Here's a bit by Juan Cole cited on the Andrew Sullivan Daily Dish web site that notes that the protests in Iran are not just the froth of a pro-Westernizing liberal elite. There are currents from the lower classes due to the economic squeeze in Iran:
Targeting Banks

Juan Cole notices an underemphasized detail from yesterday's protests:
The report of attacks on banks makes me think that there is an economic dimension to this uprising. President Mahmoud Ahmadinejad's profligate spending had provoked very high inflation last year, up to nearly 30%. Although the government maintains that inflation is now running 15%, that is still a hit that average families are taking, on top of the high prices of last year. And, many economists suspect that the true rate is higher than the government admits.

Inflation hurts people on fixed incomes or people who cannot easily raise the price for the services they offer. Since much of the economy is locked up in government-owned companies or semi-public 'foundations' (bonyads), some controlled by the Iranian Revolutionary Guards and others by elite pro-regime clerics, there may be a monopoly effect operating from the huge public sector that limits private merchants' and entrepreneurs ability to raise prices. Being 15-20 percent poorer every year would make a person angry.

Krugman on the Decade Just Ending

In his NY Times op-ed Paul Krugman sums up the decade just ending...
But from an economic point of view, I’d suggest that we call the decade past the Big Zero. It was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true.

It was a decade with basically zero job creation. O.K., the headline employment number for December 2009 will be slightly higher than that for December 1999, but only slightly. And private-sector employment has actually declined — the first decade on record in which that happened.

It was a decade with zero economic gains for the typical family. Actually, even at the height of the alleged “Bush boom,” in 2007, median household income adjusted for inflation was lower than it had been in 1999. And you know what happened next.

It was a decade of zero gains for homeowners, even if they bought early: right now housing prices, adjusted for inflation, are roughly back to where they were at the beginning of the decade. And for those who bought in the decade’s middle years — when all the serious people ridiculed warnings that housing prices made no sense, that we were in the middle of a gigantic bubble — well, I feel your pain. Almost a quarter of all mortgages in America, and 45 percent of mortgages in Florida, are underwater, with owners owing more than their houses are worth.

Last and least for most Americans — but a big deal for retirement accounts, not to mention the talking heads on financial TV — it was a decade of zero gains for stocks, even without taking inflation into account. Remember the excitement when the Dow first topped 10,000, and best-selling books like “Dow 36,000” predicted that the good times would just keep rolling? Well, that was back in 1999. Last week the market closed at 10,520.

So there was a whole lot of nothing going on in measures of economic progress or success. Funny how that happened.

For as the decade began, there was an overwhelming sense of economic triumphalism in America’s business and political establishments, a belief that we — more than anyone else in the world — knew what we were doing.


Even now, it’s hard to get Democrats, President Obama included, to deliver a full-throated critique of the practices that got us into the mess we’re in. And as for the Republicans: now that their policies of tax cuts and deregulation have led us into an economic quagmire, their prescription for recovery is — tax cuts and deregulation.

So let’s bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing. Will the next decade be better? Stay tuned. Oh, and happy New Year.
There's more in the op-ed, but the above is the key bit about how disasterous the decade has been.

What I find appalling is that a disgruntled electorate is even considering voting back in the idiots who created this disaster, the Republicans. There are enough Democrats who were 'fellow travellers' with the supply side economics, the voodoo economics, the deregulatory frenzy of the Republicans. They should quit politics and put on sackcloth and ashes to amend for their mistakes. But the idiot Republicans won't even admit they led American off a cliff. They want to pretend that it is 'socialist Obama' who caused all the problems. This is 'newspeak' as outrageous as the version that George Orwell wrote about in Nineteen Eighty-Four.

The last decade has been a disaster for the bottom 90% of the US population. If the electorate in 2010 gives powers back to the Republicans, then this will be a cruel joke on the American population.

A Fall in GDP in the Last Half of 2010?

2008 Nobel Laureate Paul Krugman agrees with Joseph Stiglitz, 2001 Nobel Laureate, that this is a sizeable chance the US will slip back into recession in the last half of 2010:
Nobel Prize winning economist Paul Krugman said he thinks there’s a “reasonably high chance” the economy will contract in the second half of next year.

On the "This Week" Roundtable, Krugman said he agreed with the assessment of fellow Nobel-winning economist Joseph Stiglitz that there is a significant chance the economy will shrink in 2010.

“I would go with Joseph Stiglitz,” Krugman added, “I’m really worried about the second half.”
Here is a video clip of Krugman making this statement.

My personal viewpoint is that the US economy will continue to grow, but that it will slow down to 2.5% during the last 9 months of 2010. This is slower than Q4 2009 and Q1 2010, but 2.5% is better than contraction. So I agree with Krugman that there will be a slowdown. I disagree that the US will fall back into recession. But, I have no special expertise in the area, so my viewpoint is essentially putting a finger up to the wind. All I'm doing is digesting the diverse opinions and weighting them according to my assessment of their credibility. So I'm making a guess, an 'educated' guess, but I believe almost everybody is flying blind right now because these are unusual times. I simply think Krugman and Stiglitz are too pessimistic.

Some Wisdom to Help Understand the Past Year

Here is the start of a very good post by Robert Reich...
2009: The Year Wall Street Bounced Back and Main Street Got Shafted

by Robert Reich

In September 2008, as the worst of the financial crisis engulfed Wall Street, George W. Bush issued a warning: "This sucker could go down." Around the same time, as Congress hashed out a bailout bill, New Hampshire Sen. Judd Gregg, the leading Republican negotiator of the bill, warned that "if we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying."

In less than a year, Wall Street was back. The five largest remaining banks are today larger, their executives and traders richer, their strategies of placing large bets with other people's money no less bold than before the meltdown. The possibility of new regulations emanating from Congress has barely inhibited the Street's exuberance.

But if Wall Street is back on top, the everyday lives of large numbers of Americans continue to be subject to overwhelming trauma, chaos and disruption.

It is commonplace among policymakers to fervently and sincerely believe that Wall Street's financial health is not only a precondition for a prosperous real economy but that when the former thrives, the latter will necessarily follow. Few fictions of modern economic life are more assiduously defended than the central importance of the Street to the well-being of the rest of us, as has been proved in 2009.

Inhabitants of the real economy are dependent on the financial economy to borrow money. But their overwhelming reliance on Wall Street is a relatively recent phenomenon. Back when middle-class Americans earned enough to be able to save more of their incomes, they borrowed from one another, largely through local and regional banks. Small businesses also did.

It's easy to understand economic policymakers being seduced by the great flows of wealth created among Wall Streeters, from whom they invariably seek advice. One of the basic assumptions of capitalism is that anyone paid huge sums of money must be very smart.

But if 2009 has proved anything, it's that the bailout of Wall Street didn't trickle down to Main Street. Mortgage delinquencies continue to rise. Small businesses can't get credit. And people everywhere, it seems, are worried about losing their jobs. Wall Street is the only place where money is flowing and pay is escalating. Top executives and traders on the Street will soon be splitting about $25 billion in bonuses (despite Goldman Sachs' decision, made with an eye toward public relations, to defer bonuses for its 30 top players).
There is more, go read the rest of the blog posting.

Sadly most Americans are still in thrall to the idiotic economic policies of the Republicans that created this mess. So it looks like the 2010 elections will swing power back to the Republicans (maybe not a majority, but a much larger minority). This is crazy. People are creating their own misery by letting Republican have a voice, have credibility, or continue their crazy opposition to anything constructive.

Watching this mess from Canada it simply breaks my heart. People have made bad choices which has wrecked the economy and now when things can be fixed in 12 months, people are going back to the original source of the problem for a "fix". Nutty.

Saturday, December 26, 2009

US Government Policy

Most Americans don't realize it, but not only are they being shafted by Wall Street to give money under TARP, and to bulk up the economy by supporting a trillion dollar deficit as a stimulus under Obama that means future taxes to repay the debt, there is yet another cost: low interest rates for savers.

Here's a bit from a NY Times article by Stephanie Strom on this additional way that the little guy is being screwed so that the rich and reckless can be "made whole":
Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit.

The elderly and others on fixed incomes have been especially hard hit. Many have seen returns on savings, C.D.’s and government bonds drop to niggling amounts recently, often costing them money once inflation, fees and taxes are considered.


“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”

Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money.
The rich get rich, the poor get shafted. That's the story of civilization. It need not be, but it is so long as the rich can buy the government they want. They bought the Republicans and got a "de-regulated" economy that let them play "heads I win, tails you lose" with risk. Now that the Democrats are in power, they've bought the politicians to make sure that any rule changes will be favourable to them. And the sad fact is that the American people keep electing politicians who are willing to sell themselves to the highest bidder. Real, radical reform is needed in the US, but it isn't going to happen until people realize they are the patsies in this shell game rigged for the rich.

New Book by Cohen and DeLong

Brad DeLong and Stephen Cohen have just published a book with the title The End of Influence: What Happens When Other Countries Have the Money.

The following sentence from the introduction of the book is funny because it is so wrong, so clearly indicates the American blindness to their own ugly manipulations of power post WWII (initially to 'win' the Cold War but since the collapse of Communism as a brazen imposition of American 'will' on the rest of the world):
Having the money was a powerful tool and force. America, of course, used its economic dominance exclusively for for global good.
I'm willing to admit that the US was a less onerous overlord than most any other country would be. But for those whose neck was held down by the hobnailed boot of American 'power' (soft or otherwise), it wasn't that pleasant.

This quote from the introduction gets it right and holds some very bad news for Americans:
When you have the money -- and "you" are a big, economically and culturally vital nation -- you get more than just a higher standard of living for your citizens. You get power and influence, and a much-enhanced ability to act out. When the money drains out, you can maintain the edge in living standards of your citizens for a considerable time (as long as others are willing to hold your growing debt and pile interest payments on top). But you lose power, especially the power to ignore others, quite quickly -- though hopefully, in quiet, nonconfrontational ways. And you lose influence -- the ability to have your wishes, ideas, and folkways willingly accepted, eagerly copied, and absorbed into daily life by others.
These words are very true. Sadly almost no Americans yet recognize that the "light on a hill" that Reagan proclaimed has gone out and that the future for America will be increasingly grim. (Ironically it was Reagan's budget-breaking policies that helped bust the nation.) It is interesting to see DeLong and Cohen are willing to admit a truth of diminished American power which has not yet dawned on Americans.

These authors make the following point which will have very interesting implications in the coming years, implications which Americans are yet to recognize:
If you owe the bank $1 million, the bank has you; if you owe $1 billion, you have the bank. The implication is that China, the biggest and most important holder of U.S. debt, is trapped into a strange, unwanted, and uncomfortable embrace with the indebted United States. The Chinese government holds about $2.5 trillion in foreign reserves, probably 70 percent of that U.S. obligations. This comes to over $20,000 per U.S. household; there is no way the United States could readily pay it back. Because it also amounts to about half of China's GDP, China can't just write it off.

Thus, China and the United States are economically co-dependent, the producer and consumer, the creditor and the debtor. ... We're bound together, and we must manage this mutual dependence carefully and, over time, wind down those economic imbalances. Populist reactions in the United States and China must also begin to work more broadly as partners to stabilize a world in political, social, and economic disarray.

So perhaps it won't matter, at least not very much. We can hope. But one thing is sure: Absent an international economic catastrophe or a major war or another game-changing disaster, the money will not soon be coming back to America.
The world has changed. Americans need to wake up to their reduced role in the world. Unlike the Bush years, a fantasy period, in which America took a 'go it alone' stance, the reality is that the world is fragile and the US can't act alone any more. At least Obama is aware of this. I have yet to see any fundamental policy changes to reflect this reality. Changes can be peaceful and satisfactory, or fanatics (nationalists and other malcontents) can rise up and drive countries into bizarre behaviours. Fanatics get this power when citizens realize that they have been living a dream and need to face up to a new reality. Accepting a loss of dominance is hard, very hard. But Americans are going to have to face this. And hopefully the fanatics won't gain control during the period of adjustment. (I'm pessimistic given the fanaticism shown by one major party, the Republicans, who are largely guilty for getting the US into the mess. This party shows no willingness to face reality.)

This book by DeLong and Cohen looks like it will be a "must read".