Sunday, May 31, 2009

Disappearing Arctic Sea Ice

Here is a nice animation of the last 30 years of sea ice growth and retreat.

I find it hard to see a pattern, but according to some "experts" there will be no arctic sea ice left this year. Here is an article from the UK's Independent:
Exclusive: Scientists warn that there may be no ice at North Pole this summer

Polar scientists reveal dramatic new evidence of climate change

By Steve Connor, Science Editor

It seems unthinkable, but for the first time in human history, ice is on course to disappear entirely from the North Pole this year.

The disappearance of the Arctic sea ice, making it possible to reach the Pole sailing in a boat through open water, would be one of the most dramatic – and worrying – examples of the impact of global warming on the planet. Scientists say the ice at 90 degrees north may well have melted away by the summer.

"From the viewpoint of science, the North Pole is just another point on the globe, but symbolically it is hugely important. There is supposed to be ice at the North Pole, not open water," said Mark Serreze of the US National Snow and Ice Data Centre in Colorado.
So... it is just 3 or 4 months away from confirming or disconfirming this "experts" judgment. Personally, I think the following graph already gives us the answer. Sure the summers of 2007 and 2008 had drastic ice melting, but the "anomaly" (the deviation of ice cover from the average) is no trending back to average, so it is very unlikely that this year will see even as much ice melt as 2007 or 2008:

Revisionist History

The interpretation of the past keeps changing. The facts change very little, but the interpretations manage remarkable changes. Here's an article in the Guardian by Rory Carroll that is a bit of a shocker:
North African pirates abducted and enslaved more than 1 million Europeans between 1530 and 1780 in a series of raids which depopulated coastal towns from Sicily to Cornwall, according to new research.

Thousands of white Christians were seized every year to work as galley slaves, labourers and concubines for Muslim overlords in what is today Morocco, Tunisia, Algeria and Libya, it is claimed.

Scholars have long known of the slave raids on Europe. But American historian Robert Davis has calculated that the total number captured - although small compared with the 12 million Africans shipped to the Americas in later years - was far higher than previously recognised.

His new book, Christian Slaves, Muslim Masters: White Slavery in the Mediterranean, the Barbary Coast, and Italy, 1500-1800, concluded that 1 million to 1.25 million ended up in bondage.

Prof Davis's unorthodox methodology split historians over whether his estimates were plausible but they welcomed any attempt to fill a gap in the little-known story of Africans subjugating Europeans.

By collating different sources of information from Europe over three centuries, the University of Ohio professor has painted a picture of a continent at the mercy of pirates from the Barbary Coast, known as corsairs, who sailed in lateen-rigged xebecs and oared galleys.

Villages and towns on the coast of Italy, Spain, Portugal and France were hardest hit but the raiders also seized people in Britain, Ireland and Iceland. According to one account they even captured 130 American seamen from ships that they boarded in the Atlantic and Mediterranean between 1785 and 1793.

In the absence of detailed written records such as customs forms Prof Davis decided to extrapolate from the best records available indicating how many slaves were at a particular location at a single time and calculate how many new slaves were needed to replace those who died, escaped or were freed.

To keep the slave population stable, around one quarter had to be replaced each year, which for the period 1580 to 1680 meant around 8,500 new slaves per annum, totalling 850,000.

The same methodology would suggest 475,000 were abducted in the previous and following centuries.


Dr Earle also cautioned that the picture was clouded by the fact the corsairs also seized non-Christian whites from eastern Europe and black people from west Africa. "I wouldn't hazard a guess about the total."

According to one estimate, 7,000 English people were abducted between 1622-1644, many of them ships' crews and passengers. But the corsairs also landed on unguarded beaches, often at night, to snatch the unwary.

Almost all the inhabitants of the village of Baltimore, in Ireland, were captured in 1631, and there were other raids in Devon and Cornwall.


In comments which may stoke controversy, he said that white slavery had been minimised or ignored because academics preferred to treat Europeans as evil colonialists rather than as victims.

While Africans laboured on sugar and cotton plantations the European slaves were put to work in quarries, building sites and galleys and endured malnutrition, disease and maltreatment.

Ruling pashas, entitled to an eighth of all captured Christians, housed them in overcrowded baths known as baƱos and used them for public works such as building harbours and cutting trees. They were given loaves of black bread and water.

The pasha's female captives were more likely to be regarded as hostages to be bargained for ransom but many worked as attendants in the palace harem while awaiting payment and freedom, which in some cases never came. Some slaves bought by private individuals were well treated and became companions, others were overworked and beaten.

"The most unlucky ended up stuck and forgotten out in the desert, in some sleepy town such as Suez, or in the Turkish sultan's galleys, where some slaves rowed for decades without ever setting foot on shore," said Prof Davis, whose book is published in the US by Palgrave Macmillan.
I've been reading Obama's Dreams from My Father and have been bothered by the dreary view that "blacks are oppressed" all through the book. The joke is that this is a historical accident. Any group can be oppressed by any other group. There is in human nature an evil temptation to live at the expense of some other person. Today's capitalist society is a "tamed" version of slavery. Those with wealth are able to put invisible shackles on the poor and get them to put in long hours to further enrich the elite of society. This has been our fate since we stopped being hunters and gathers and settled down and accumulated wealth that could be stolen or controlled.

Saturday, May 30, 2009

Say Goodbye to Manufacturing Jobs

Here is Robert Reich, Clinton's Secretary of Labor, pointing out that factory jobs are disappearing and won't be coming back. Bailouts for Detroit won't keep UAW jobs. Those jobs are disappearing.

Here is the key bit from Reich's blog:
... it doesn't make sense for America to try to maintain or enlarge manufacturing as a portion of the economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming in from abroad--something I don't recommend--we'd still be losing manufacturing jobs. That's mainly because of technology.

When we think of manufacturing jobs, we tend to imagine old-time assembly lines populated by millions of blue-collar workers who had well-paying jobs with good benefits. But that picture no longer describes most manufacturing. I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won't have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots.

Factory jobs are vanishing all over the world. Even China is losing them. The Chinese are doing more manufacturing than ever, but they're also becoming far more efficient at it. They've shuttered most of the old state-run factories. Their new factories are chock full of automated and computerized machines. As a result, they don't need as many manufacturing workers as before.

Economists at Alliance Capital Management took a look at employment trends in twenty large economies and found that between 1995 and 2002--before the asset bubble and subsequent bust--twenty-two million manufacturing jobs disappeared. The United States wasn't even the biggest loser. We lost about 11% of our manufacturing jobs in that period, but the Japanese lost 16% of theirs. Even developing nations lost factory jobs: Brazil suffered a 20% decline, and China had a 15% drop.

What happened to manufacturing? In two words, higher productivity. As productivity rises, employment falls because fewer people are needed. In this, manufacturing is following the same trend as agriculture. A century ago, almost 30% of adult Americans worked on a farm. Nowadays, fewer than 5% do. That doesn't mean the U.S. failed at agriculture. Quite the opposite. American agriculture is a huge success story. America can generate far larger crops than a century ago with far fewer people. New technologies, more efficient machines, new methods of fertilizing, better systems of crop rotation, and efficiencies of large scale have all made farming much more productive.

Manufacturing is analogous. In America and elsewhere around the world, it's a success. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30%.

We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over. And stop blaming poor nations whose workers get very low wages. Of course their wages are low; these nations are poor. They can become more prosperous only by exporting to rich nations. When America blocks their exports by erecting tariffs and subsidizing our domestic industries, we prevent them from doing better. Helping poorer nations become more prosperous is not only in the interest of humanity but also wise because it lessens global instability.

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task.
This guy knows what he is talking about. Go read this whole blog entry. And go look for part two where he zeros in on Detroit automakers.

It's Alive! It's Alive!

Shades of Dr. Frankenstein...

Wired Magazine has a report by Brandon Keim entitled "Life’s First Spark Re-Created in the Laboratory". Here's the key bit:
RNA is now found in living cells, where it carries information between genes and protein-manufacturing cellular components. Scientists think RNA existed early in Earth’s history, providing a necessary intermediate platform between pre-biotic chemicals and DNA, its double-stranded, more-stable descendant.

However, though researchers have been able to show how RNA’s component molecules, called ribonucleotides, could assemble into RNA, their many attempts to synthesize these ribonucleotides have failed. No matter how they combined the ingredients — a sugar, a phosphate, and one of four different nitrogenous molecules, or nucleobases — ribonucleotides just wouldn’t form.

Sutherland’s team took a different approach in what Harvard molecular biologist Jack Szostak called a “synthetic tour de force” in an accompanying commentary in Nature.

“By changing the way we mix the ingredients together, we managed to make ribonucleotides,” said Sutherland. “The chemistry works very effectively from simple precursors, and the conditions required are not distinct from what one might imagine took place on the early Earth.”

Like other would-be nucleotide synthesizers, Sutherland’s team included phosphate in their mix, but rather than adding it to sugars and nucleobases, they started with an array of even simpler molecules that were probably also in Earth’s primordial ooze.

They mixed the molecules in water, heated the solution, then allowed it to evaporate, leaving behind a residue of hybrid, half-sugar, half-nucleobase molecules. To this residue they again added water, heated it, allowed it evaporate, and then irradiated it.

At each stage of the cycle, the resulting molecules were more complex. At the final stage, Sutherland’s team added phosphate. “Remarkably, it transformed into the ribonucleotide!” said Sutherland.

According to Sutherland, these laboratory conditions resembled those of the life-originating “warm little pond” hypothesized by Charles Darwin if the pond “evaporated, got heated, and then it rained and the sun shone.”
The original experiments go back to 1952 with Stanley Miller and Harold Urey and were able to create some amino acids (building blocks of life's proteins). But how life self-organized remained elusive. In 1986 Walter Gilbert hypotesized that life did not start with DNA but with RNA since RNA can both hold a code as well as build more molecules.

With the above research result, this substantiates down the RNA World thesis of Gilbert by showing how the initial RNA was created. It looks like we really do understand how life started.

We've come a long way from the pseudo-science of Hollywood:

The truth is real science is hard work, lots of in-the-trenches collaboration and even generations of efforts-layered-on-efforts to build great knowledge. It is easy to generate phoney "drama". It is hard to actually advance knowledge.

Battle of the Sound Bites

In the US the right has launched a full bore assault against the Obama nomination of Sonia Sotomayor for the Supreme Court. They have focused on the following sound bite from a speech:
I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life.
Yeah, that does sound kinda racist because it seems to be saying that "my people, my gender are better than yours!"

But, take a step back and see that "sound bite" in the speech's context:
Whether born from experience or inherent physiological or cultural differences, a possibility I abhor less or discount less than my colleague Judge Cedarbaum, our gender and national origins may and will make a difference in our judging. Justice O'Connor has often been cited as saying that a wise old man and wise old woman will reach the same conclusion in deciding cases. I am not so sure Justice O'Connor is the author of that line since Professor Resnik attributes that line to Supreme Court Justice Coyle. I am also not so sure that I agree with the statement. First, as Professor Martha Minnow has noted, there can never be a universal definition of wise. Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life.

Let us not forget that wise men like Oliver Wendell Holmes and Justice Cardozo voted on cases which upheld both sex and race discrimination in our society. Until 1972, no Supreme Court case ever upheld the claim of a woman in a gender discrimination case. I, like Professor Carter, believe that we should not be so myopic as to believe that others of different experiences or backgrounds are incapable of understanding the values and needs of people from a different group. Many are so capable. As Judge Cedarbaum pointed out to me, nine white men on the Supreme Court in the past have done so on many occasions and on many issues including Brown.

However, to understand takes time and effort, something that not all people are willing to give. For others, their experiences limit their ability to understand the experiences of others. Other simply do not care. Hence, one must accept the proposition that a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts that judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.
These are not the ravings of a racist. They are simply honest observations of the way the world works. It is an obvious mischaracterization -- a "sound bite" manipulation -- that the Right is using to try to destroy this woman.

As you read the above paragraphs, she admits that 9 white judges can sometimes get it right and cites Brown vs the Board of Education as an example. But she also points out the historically the Supreme Court has been slow to recognize racism and discrimination because these are not the experiences of 9 old white men.

Here is a blog entry from Brad DeLong that carefully walks through the Sotomayor speech so that you can better appreciate her point:
Sotomayor vs. Cardozo

by Brad DeLong

Michael O'Hare gets one wrong:
The Reality-Based Community: Diversity: One of Sonia Sotomayor's lower-candlepower remarks was the one about a Latina judge making a better decision yada yada...
Actually, it was a high-candlepower rhetorical move, as Michael would realize if he had read Sotomayor's speech more carefully.

OK, boys, girls, and xenosophonts. Ready? Let's role the videotape:

Judge Sotomayor begins this part of a speech with a generally-accepted pious American liberal platitude:
A Latina Judge's Voice: Justice O'Connor has often been cited as saying that a wise old man and wise old woman will reach the same conclusion in deciding cases...
Everyone expects her to agree with O'Connor and develop the point. Instead, she cuts across the grain by questioning the platitude, introducing doubt into the issue. She then wakes the audience up by violating their expectations:
I am not so sure... that I agree...
Now that she has the audience's attention, she is playing for high stakes: she must justify her introduction of doubt into the mix. She does so by first making a general point:
First... there can never be a universal definition of wise...
Thus it seems likely that men's wisdom and women's wisdom will be somewhat different, and thus that their wise judgments will be somewhat different--not better and worse, but different. Then, however, she raises the stakes even higher with her assertion:
Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life...
Here she has raised the stakes by committing a form of heresy against modern liberal American values. Note that she is choosing her words carefully: she--for she is the "wise Latina woman with the richness of her experiences" has not said that she is or will be a better judge (contra Michael O'Hare, who claims that she said "Latina jduge making a better decision yada yada..." which she did not say) but rather that she personally "hopes" that she will be a better judge--and one is always allowed to hope that one will turn out to be the best.

At this point in the speech she is all in. How can she justify her hope that her experience of being a brilliant upwardly-mobile Latina woman in twentieth century America will make her a better judge? She has the audience's complete attention by now, for that is a very ballsy assertion to make. And she delivers in the very next paragraph:
Let us not forget that wise men like Oliver Wendell Holmes and Justice Cardozo voted on cases which upheld both sex and race discrimination...
This is game and set for Sotomayor. Holmes and Cardozo were great judges. Sotomayor is saying: even though they were great judges they judged wrong in cases of sex and race discrimination. Sotomayor is saying: I am a better judge in cases of sex and race discrimination than Holmes and Cardozo. Thus there is at least reason to hope that a "wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life..."

This is game and set for Sotomayor. But she still has to win the match. Why is there reason to hope that we judges going forward can do better than Holmes or Cardozo did? It is not that people who don't look like us or have the same plumbing that we do can't have the empathy--the "wise and understanding heart" that Solomon begged of The One Who Is--to be a good judge:
I... believe that we should not be so myopic as to believe that others of different experiences or backgrounds are incapable of understanding the values and needs of people from a different group. Many are so capable.... [N]ine white men on the Supreme Court in the past have done so on many occasions...
But it is hard work to always remember to have and use your wise and understanding heart:
However, to understand takes time and effort, something that not all people are willing to give. For others... experiences limit their ability to understand.... Others simply do not care...
And it is perhaps slightly less hard work for people from groups that have historically been on the outside:
Hence... a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts that judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage...
But when will these differences in her judgments from those that Holmes and Cardozo would have made be good differences, and when will they be bad differences? This is the lesson Sotomayor draws:
Each day on the bench I learn something new about the judicial process and about being a professional Latina woman in a world that sometimes looks at me with suspicion. I am reminded each day that... I owe [the parties before me] constant and complete vigilance in checking my assumptions, presumptions and perspectives; and ensuring that, to the extent that my limited abilities and capabilities permit me, that I reevaluate [my assumptions, presumptions and perspectives] and change [them] as circumstances and cases before me require. I can and do aspire to be greater than the sum total of my experiences, but I accept my limitations.... [W]e who judge must not deny the differences resulting from experience and heritage but [must] attempt... to judge when those opinions, sympathies and prejudices are appropriate.
Match to Sotomayor.

To call this rhetorical journey a "lower-candlepower remark..." and to summarize is as "about a Latina judge making a better decision yada yada..." is highly unfair.

Thursday, May 28, 2009

Cochran & Harpending's "The 10,000 Year Explosion"

This is a book I couldn't put down. I ended up putting off lots of things while I found time to finish this book. It is an excellent and exciting account of evidence for genetic evolution in modern humans.

The main argument is:
  • The proposed that the "creative explosion" of 40,000 years ago was the result of gene interchange with the Neanderthals.

  • The rapid explosion of population with agriculture created an opportunity for genetic innovation and the pressures for new behaviours required by farming did the selecting to shape a genetically new human

  • The conquest of the new world was greatly facilitated by disease which in fact was evidence of very different immune system genetics between New World populations that never felt the selective pressures of Old World population densities of the agricultural explosion

  • The expansion of the Indo-Europeans is evidence of the genetic value of genes that prolonged the ability to digest lactose

  • The near one standard deviation superiority in IQ among Ashkenazi Jews is evidence of evolutionary pressure selecting for intelligence among an socially isolated population forced to live by its wits among an fiercely anti-Semitic European population
I enjoyed numerous other details about genes sprinkled throughout the book:
  • Light skin is not an adaptation for "living in the north" as is commonly thought (think Inuit who are still dark and stories by the Romans that Picts were "dark skinned"). It was a vitamin D deficiency caused by the change of diet to cereals by the agricultural revolution that put evolutiony pressure to select for lighter skin to allow more vitamin D production in the skin to make up for the lack in the diet

  • The Romans dispatched a large number of Sarmatians to an outpost in England. This can be seen in the genetics of the English populations and in stories that strangely match the tales found in the Caucasus. He cites the Arthurian legend as curiously matching a tale of a dying warrior who wants his sword to be thrown into a lake. Twice his friend fails to do the deed. With much pleading he finally throws it into the lake and a woman's hand come up out of the lake and grabs it.

  • The authors argue that 10,000 years ago there were no light coloured eyes. But blue eyes result from a change in the expression of the HERC2 gene which lies next to the OCA2. The HERC2 regulates the expression of the OCA2 gene which controls eye colour. The authors argue that this mutation occurred 6,000 years ago within Lithuania among the Vandal tribe which then spread it throughout western Europe and into North Africa where it shows up among the Berber people.
This is a fascinating book. I highly recommend it. It gives you a new twist on history and on understanding the evolutionary history of modern humans.

The Cost of "Security"

Here is a report from the Toronto Star. I find this "enhanced border security" in the same league as "enhanced interrogation procedures", i.e. idiocy. The 9/11 attackers entered the US directly and legally using the stupidity of the US bureaucrats to get in detected but not deterred. This clampdown on the border is ridiculous because there is no proven "threat" that justifies it.

Think about the cost. News reports are saying that 20,000 Canadians per day are now lining up to get passports because of the US clampdown. That means something like 5 million passports issued per year at a cost of $60 each, that is a half a billion dollar "tax" on visitors from Canada to cross the border. Add to that the fact that Americans now have to get a passport to leave their own country to go into Canada, and you are talking about an annual $1 billion cost for "security".

Let's see, it has been over 8 years since 9/11 and there have been no threats from Canada. But the US for "security" reasons will now close its border unless you pay for a passport. In the midst of a recession with people already strapped for money, the idiotic US has just imposed a big tax on people being tourists. What next? Tax people every time they walk out their front door? That has to be a security threat. By my calculation one in every trillion times somebody in the US has gone out a door a terrorist act has occurred. I say demand a "homeowner's ID" with a fee of $50 each. That could hit the US with an additional $15 billion "security" tax.

With that ID US authorities could have stopped all those Al Qaeda terrorist who were renting apartments and homes prior to 9/11 because the local cops would have know exactly who they were. OK, so the CIA already knew exactly who they were, but why would you expect the CIA to tell the FBI? Especially when the CIA had issued in the summer of 2001 a Presidential Dailyl Briefing entitle "Bin Laden Determined to Attack the US!" So maybe something more than an ID is needed. Maybe another bureaucracy to check on the checkers to make sure they are checking IDs. Yes that's it!!!

I can think of lots more of these "security programs" that the US should implement to really, really ensure "security". We can layer multi-billion dollar "security" on top of multi-billion dollar "security". Won't everybody feel safer with that?

Anyway... here's the Star article:
U.S. security czar softens stand on border

Laws same, enforcement techniques will be different at Canadian, Mexican borders, U.S. official says


A senior U.S. official who earlier stoked concerns that Canada's border would be treated no different than Mexico's now says that while the law governing the crossings is the same, the techniques used to implement it will be different.

U.S. Homeland Security Secretary Janet Napolitano's words — made in Detroit late yesterday — come less than a week before new rules kick in that require a passport or other secure document to enter the U.S.

"We're going to be using a different mix of manpower and technology between the ports of entry, for example, than we would at the southern border," Napolitano said at a joint news conference with Public Safety Minister Peter Van Loan.

"So, the law is the same but the techniques we use to implement that law will be differentiated because of the differences between Canada and Mexico."

In March, Napolitano told a Canada-U.S. border conference that the U.S. "shouldn't go light on one and heavy on the other," in reference to the Canadian and Mexican borders.

Those comments came after she testified at U.S. Senate hearings into growing drug violence at the U.S.-Mexican border that prompted President Barack Obama to deploy hundreds of federal agents to border posts.

Van Loan insisted at the time he was unconcerned about a thickening of the U.S. border based on those comments – which he said had been exaggerated by the media.

Yesterday, the two announced a pact, known as the Shiprider program, to allow officers from the RCMP and the U.S. Coast Guard to ride each other's vessels for joint patrols and specific enforcement operations.

The agreement would allow the countries to help enforce each other's laws.

With the new passport requirements coming into effect June 1 (next Monday) under the Western Hemisphere Travel Initiative, Napolitano held up the Shiprider program as an example of the special relationship Washington shares with Canada.

"I'd like to emphasize that security for the United States does not mean closing ourselves off from other countries," she said.

"It means working together as neighbours and allies, and it is because of our close and unique relationship with Canada that such closely co-ordinated programs like Shiprider can exist."

Napolitano and Van Loan have agreed to twice-yearly, high-level meetings between U.S. and Canadian officials to discuss northern border issues.

Steinbeck on our Current Crisis

I found this interesting bit tying Steinbeck to the present in a blog entry by Justin Wolfers at the Freakonomics site.
I was reading John Steinbeck’s Cannery Row last night, and I was really struck by how the following passage speaks to the forces behind our current economic predicament:
“It has always seemed strange to me,” said Doc. “The things we admire in men — kindness and generosity, openness, honesty, understanding, and feeling — are the concomitants of failure in our system. And those traits we detest — sharpness, greed, acquisitiveness, meanness, egotism, and self-interest — are the traits of success. And while men admire the quality of the first, they love the produce of the second.”
The usual cheap shot after citing a literary figure would be to argue that modern economics can’t possibly grapple with such issues. But it can. The incentives that Steinbeck describes are the incentives described in standard economic models. Agency theory is almost entirely devoted to developing mechanisms to deal with the fact that private and social interests often diverge; information economics tells us a lot about when these incentives are active; and behavioral economics tells us how people balance the opposing forces Steinbeck identifies.
I think Wolfers is cherry picking. Sure, these fields of economics are trying to deal with elements of economic behaviour that underlie the crisis, but they didn't alert anybody to the potential problem and they haven't guided any actions during the current crisis. Wolfer's comment would be like Einstein surmising during WWI that his famous equation held the solution for the war. Sure, but it was applied only 25 years later and many, many billions of dollars later.

The tragedy of this current crisis lines up better with the comments that Paul Krugman has been making that the economics profession -- the "fresh water" economists -- has regressed. It is unlearned the lessons of the 1930s. The macroeconomics taught for the last 30 years have removed historical lessons and set people, and the profession, up for the current castrophe since the dominant economic ideas going into this crisis were so fundamentally wrong.

If I remember my literary history well, it was the reverse of what Steinbeck surmised. The fiction coming out of the catastrophe of the 1930s was a gritty realism that looked squinty-eyed at the grasping Wall Streeters while it sang the praises of the people who were the salt of the earth. The fact is fiction began rejecting this viewpoint: propserity in the 1950s gave rise to the beat generation, the boom in the 1960s gave rise to the post-industrial hippies, the stagflation of the 1960s created the me-generation of EST and rolfing, the revival of the 1980s gave us yuppies and Gordon Gecko with the claim "greed is good", the boom of the 1990s created the self-satisfied neo-cons and Newt Gingerich's rabid right wing politics, and finally with Bush in this decade you had the cherry-on-the-top with a completely dysfunctional government that let corporate corruption run rampant.

Steinbeck's comment is ahistorical. In reality there have been eras when what we admire isn't just the concomitants of failure and those that we claim we hate aren't just those of worldly success.

Wednesday, May 27, 2009

Krugman on Sotomayor

I enjoy how Paul Krugman can ferret out what is going on. Here's Krugman's NY Time blog entry on the treatment that conservatives are giving Obama's Supreme Court nominee. I love the way he "reminds" us of how Bush was treated and how Bush treated the people:
The attacks on Sonia Sotomayor are getting crazier by the minute. The pronunciation of her name is unnatural. Her fondness for Puerto Rican cuisine — sorry, her “claimed” fondness (you never know) — may cloud her impartiality. She doesn’t have enough money in her retirement account.

But is this any crazier, when you come down to it, than the Cult of Bush that ruled much of Washington for years? It was positive, not negative (though there was plenty of that too), but it was similarly about identity politics — you were supposed to support Bush, not because of how he did his job, but because he was, drumroll, a regular guy. Remember Peggy Noonan
I was asked this week why the president seems so attractive to the heartland, to what used to be called Middle America. A big question. I found my mind going to this word: normal.

Mr. Bush is the triumph of the seemingly average American man. He’s normal. He thinks in a sort of common-sense way. He speaks the language of business and sports and politics. You know him. He’s not exotic. But if there’s a fire on the block, he’ll run out and help. He’ll help direct the rig to the right house and count the kids coming out and say, “Where’s Sally?” He’s responsible. He’s not an intellectual.
Of course, a year and a half later there really was a fire on the block — actually a flood in New Orleans, but basically the same thing — and what he actually said was, “Brownie, you’re doing a heck of a job.” But I digress.

The thing that is really driving conservatives crazy, I think, is that their identity politics just isn’t working like it used to. Their whole approach has been based on the belief that Americans vote as if they live in Mayberry, and fear and hate anyone who looks a bit different; now that the country just isn’t like that, they’ve gone mad.

Why Mother Gave You Piano Lessons

This is why your mother gave you piano lessons...

Corrupt Banks at it Again

Here is a Wall Street Journal article noting that the banks want to "game the system" that Obama's financial team (Geithner, Larry Summers, et. al.) has set up to get rid of the "toxic assets" (now called "legacy assets" as part of putting lipstick on a pig). When this PPIP program was set up, lots of people pointed out that it opened the door wide to corruption. Well, the WSJ is saying that the Wall Street bankers now want to play the corrupt game with PPIP:
Banks Aiming to Play Both Sides of Coin

Industry Lobbies FDIC to Let Some Buy Toxic Assets With Taxpayer Aid From Own Loan Books

Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves.

Banking trade groups are lobbying the Federal Deposit Insurance Corp. for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program.

PPIP was hatched by the Obama administration as a way for banks to sell hard-to-value loans and securities to private investors, who would get financial aid as an enticement to help them unclog bank balance sheets. ...

The lobbying push is aimed at the Legacy Loans Program, which will use about half of the government's overall PPIP infusion to facilitate the sale of whole loans such as residential and commercial mortgages.

Federal officials haven't specified whether banks will be allowed to both buy and sell loans ...

Some critics see the proposal as an example of banks trying to profit through financial engineering at taxpayer expense, because the government would subsidize the asset purchases. ...

"The notion of banks doing this is incongruent with the original purpose of the PPIP and wrought with major conflicts," said Thomas Priore, president of ICP Capital, a New York fixed-income investment firm overseeing about $16 billion in assets.

Seeing into Obama's Soul

Here is an opinion piece by E. J. Dionne of the Washington Post where he claims to see into Obama's political soul and find the outlines of where Obama is taking the US:
Over the last week, the true nature of Obama's political project has come into much clearer view. He is out to build a new and enduring political establishment, located slightly to the left of center but including everyone except the far right. That's certainly a bracing idea, since Washington has not seen a liberal establishment since the mid-1960s.

"Liberal establishment," of course, sounds terrible to many ears, and Obama would never use the term. But those who led it in its heyday accomplished a great deal, from Medicare to food stamps to Head Start to federal aid for schools. Its proudest achievements were civil rights laws that paved the way for the election of our first African American president.

But the liberal establishment was also resolutely tough-minded in its approach to foreign policy and national security. Not for nothing was the phrase "cold war liberalism" coined.


Last Thursday afternoon, for example, the White House invited in journalists, mostly opinion writers, to sell them on the substance of the president's big speech on Guantanamo and the treatment of detainees.

Unbeknown to the writers until afterward, they had been divided into two groups, one more centrist with a sprinkling of moderate conservatives, the other more liberal. (I was in the liberal group.) The president made an unscheduled appearance at each briefing. As is his way, he charmed both groups.

The idea, as far as I can determine, was to sell the liberal group on those aspects of Obama's plan that are a break from George W. Bush's policies, and to sell the centrist group on the toughness of the president's approach and the fact that it squares with Bush's more moderate moves later in his second term.

The dual selling job was helped along immensely by former vice president Dick Cheney's attacks on Obama right after the president delivered his own speech.

For the left, which is unhappy about Obama's decisions on such issues as preventive detention, Cheney's outlandish explosion was a reminder of how much better Obama is than the guys who came before. While civil libertarians grumbled about parts of Obama's speech, much of the left concentrated its fire on Cheney.

The center and near right, in the meantime, could have the satisfaction of dismissing the over-the-hill Cheney and comment knowingly on how basically "sound" and "realistic" the president's plans really were.


Obama's center-left two-step is also on display in the domestic sphere. He is pushing hard for programs progressives have sought for years -- and, in the case of health care, for decades. But on the economic crisis, he has tacked carefully to the center, pushing aside calls for nationalizing the banks and working closely with the financial establishment to revive the economy.

And there's subtlety within his subtlety: Obama wants a more regulated financial market, but he would not disrupt the basic arrangements of American capitalism. If Obama has his way, investment bankers will make a bit less money and pay more in taxes, but they'll continue to be rich.

The establishment Obama is trying to build would make the country better -- more equal, more just and more conscious of the government's constitutional obligations. The far right is being isolated, and Republicans are simply lost.

But establishments have a habit of becoming too confident in their ability to manipulate people and events, and too certain of their own moral righteousness. Obama's political and substantive gifts are undeniable. What he needs to realize are the limits of his own mastery.

Cheney, Torture, and Truth Missing in Action

Here is a very interesting video of an interview with Matthew Alexander, a military interrogator who played a key role in tracking down Abu Musab al-Zarqawi in Iraq:

Here is a bit from an article in the Huffington Post about this video:
Brave New Films released a short video Tuesday of Matthew Alexander taking apart Cheney's argument piece by piece. Alexander, who uses a pseudonym for security reasons, was a 14-year military interrogator who oversaw more than a thousand interrogations and conducted more than 300 in Iraq himself. He led the interrogation team that scored one of the United States' most high-profile captures, that of Abu Musab al-Zarqawi, and he did it using traditional methods.

Alexander easily takes down Cheney's arguments. The most immediate blow Alexander strikes is, of course, his obvious success, which undercuts Cheney's case for more brutal techniques. Alexander also engages on the level of principle. For Cheney, the suggestion that torture is a poor strategy because it aids terrorist recruitment is nothing more than old-fashioned blame-America-first cowardice.

"After a familiar fashion, it excuses the violent and blames America for the evil that others do," said Cheney.

The president and others who have condemned torture don't say that it "excuses the violent." Rather, they say it makes a violent reaction more likely -- and Alexander backed them up.

"At the prison where I conducted interrogations," responded Alexander, "we heard day in and day out, foreign fighters who had been captured state that the number one reason that they had come to fight in Iraq was because of torture and abuse, what had happened at Guantanamo Bay and Abu Ghraib."

Alexander put the number making this claim at 90 percent.

Alexander, however, made a broader point at the end of his interview, one that would certainly evade Cheney's grasp, convinced as he is that Al Qaeda recruits "hate us for our freedoms."

Cheney, said Alexander, fundamentally misunderstands the way America is viewed around the world. The American principles of freedom and democracy are cherished in the Muslim world and the idea, at least, of America is still a seductive one. But it is the behavior of the Bush administration at Guantanamo Bay, Abu Ghraib and secret prisons around the globe that undercuts that image, allowing Al Qaeda to make the argument that America isn't what it stands for.

"Remember," said Alexander, "one of Al Qaeda's goals, it's not just to attack the United States, it's to prove that we're hypocrites, that we don't live up to American principles. So when we use torture and abuse, we're playing directly into one of their stated goals."

The video is at once an effective rebuke of the former vice president and a sign of how the changing media landscape can flatten the field of political debate. In an earlier era, Alexander would likely lack the opportunity to respond to the vice president because he has already written on op-ed for the Washington Post about his opposition to torture and done the media rounds promoting his book "How to Break a Terrorist: The U.S. Interrogators Who Used Brains, Not Brutality, to Take Down the Deadliest Man in Iraq." The BNF video, and a rejoinder posted here over the weekend, reinserts a critic with deep credibility back into the debate.
I can't help thinking as I watch Cheney with his suave self-assurances that he gave the same performance back in 2002 and 2003 when he kept saying that Saddam Hussein had an active "weapons of mass destruction" program. Cheney used lies to get the US into a needless war. Cheney continues to put out lies. He is an obvious alpha male with dominating persona, but the reality is that he is a madman that has led the US over the precipice and into an abyss like many a madman before him (Robert Mugabe, Saddam Hussein, Pol Pot, Stalin, Mao, Kim Jong-il, Hitler, Napoleon, etc., etc.)

A Quick Review of American History

Here is an interesting review of American history applied to the current moment by David Sirota. He mobilizes the past to make a strong call for a political struggle to get American back on track. I sure hope people respond to this call...
It’s easy to think that the revolutionary birth of America materialized from the momentary benevolence and foresight of colonial aristocrats gathered in Philadelphia. But that break from the monarchy of King George III, and the populist Jeffersonian and Jacksonian eras that succeeded it, came from the first of the Manichean struggles between Teabags and Douches that mark American history.

Through pamphleteers like Thomas Paine and rabble-rousers like Samuel Adams, the radical colonial teabaggers who fought the British douches during the Revolutionary War sowed the political terrain for independence, adoption of the Bill of Rights, and then for the (relatively) radical pre-Civil War eras.

Likewise, decades of activism by abolitionists (teabaggers) forced the president to take on the South’s agricultural oligarchy (douchebags) and begin the process of ending the institution of slavery. Teabaggers like William Jennings Bryan, rural populist parties and labor activists railing against “crosses of gold” set the stage for Theodore Roosevelt to break from fellow Republicans and begin trust-busting the corporate douchebags of the early 20th century. And those same teabaggers helped set the stage for Franklin Roosevelt’s transformative douchebag rout in the 1930s.

Though the 30-year period between the two Roosevelts’ presidencies is portrayed as a halcyon era of country club Republican douchebaggery, the decades were also marked by teabaggers organizing on the left. Reactionary forces like the Ku Klux Klan and the right-wing nativists made their presence felt, but the zeitgeist of the period was embodied in militant labor activism, socialist and communist agitation for a bigger welfare state, Bonus Army revolts for veterans benefits, and feminist activism for suffrage and equality.

Thus, when the Great Depression hit, a political infrastructure and ideological ferment had already created the conditions that would channel the cataclysm’s angst through the prism of a progressive economic program. Progressives had laid the groundwork during the 1920s for the kind of political dynamic that moved the debate leftward and led to New Deal.

Progressives remained the dominant rabble-rousing teabaggers from the Great Depression until the 1970s, winning battles not only for the New Deal, but for civil rights legislation and the end of the Vietnam War. Slowly, however, through icons like William F. Buckley, Barry Goldwater and ultimately Ronald Reagan, conservatives figured out how to package their Establishment agenda of tax cuts, deregulation and privatization in the argot of outsider populism. By claiming “extremism is no vice,” railing on “welfare queens,” and insisting “government is the problem,” the Right discovered how to wrap corporate douchbaggery in a teabag.

With the help of conservative think tanks, columnists, television pundits and talk radio hosts, this sleight-of-bag created the politics of perpetual outrage predicated on the contradictions detailed by Thomas Frank in What’s the Matter With Kansas?,: impoverished rural states electing Senators on promises to cut inheritance taxes on millionaires and blue-collar workers supporting lawmakers who back job-killing trade deals—as Frank puts it, a country ”nailing itself to that cross of gold.”

Today, Republican congressmen champion a flat tax and embrace anti-immigrant xenophobia, media voices like Glenn Beck infuse their rhetoric with violent themes, and Texas Gov. Rick Perry (R) endorses the concept of secession—all while a so-called “tea party” movement against government is manufactured via Fox News and a team of lobbyists from FreedomWorks, a corporate front group in D.C.

This might be unimportant during times of relative prosperity. But if, as many economists predict, the current financial crisis becomes the second Great Depression, the period between 1980 and today will have been a crucial pre-depression era—the era whose teabaggers, like those of the pre-depression 1900-1932 period, could drive the policies that emerge from the crisis.

In terms of tactics, yesterday’s pre-New Deal labor organizers, Bonus Army marchers and communist agitators have become the militias, tax deniers, Ron Paul-followers and Minutemen who populate the right. And these new voices are being amplified by a powerful Fox News/talk radio noise machine that no teabagger ever had before.

The first 100 days of the Obama administration, the main target of the teabaggers ire has been punctuated by persistent establishment douchebaggery. Specifically, the new White House has supported another bank bailout, considered an attempt to undermine autoworkers’ unions, resisted implementing tough Roosevelt-esque financial regulations, and competed with Republicans to see who can float the biggest tax breaks.

Certainly, President Obama’s budget includes some progressive priorities, but the framing and overall direction of the policy debate reflects the pull of right-wing populism. The administration is still trying to out-tax-cut the GOP, still citing defense budget increases as proof of “toughness,” and still laughing off criminal justice reform proposals for fear of losing “tough on crime” battles.

In the lead up to and aftermath of the April 15 tea parties, progressives used their limited media resources (MSNBC programs, Air America shows, blogs, newspaper columns, etc.) to make fun of the conservative protestors. Many voices lamented that in railing on government and demanding more tax cuts, conservatives continue to champion the Establishment’s wish list—not genuine teabag populism.

On its merits that is true. The April tea parties were organized by corporate lobbyists and backed by the same moneyed Republican douchebags that drove the economy into the ground. But with stagecraft defining so much of contemporary politics, and with such a powerful media machine behind the image of conservative teabaggery, the truth doesn’t really matter.

That means until progressives stop spending their time ridiculing teabaggery and start co-opting it through their own brand of full-throated populism, we will continue to be portrayed as the inept douchebags in the Manichean struggle—and we may see any “new New Deal” opportunity pass us by.
This is a call from the left to put pressure on Obama to deliver the "change" and the "hope" that he promised. Too much of Obama's actions have been middle-of-the-road and not delivering real help to people who are hurting. The kind of pressure David Sirota is calling for is needed to make Obama live up to his promises. (Remember, Obama himself pointed out that he needed "the people" to lead the change. You can't just hope for "the government" to deliver it. You have to pressure the government to get it to deliver.)

Here's some background on Sirota taken from Wikipedia:
Rolling Stone national political correspondent Matt Taibbi said "Sirota is honest, uncompromising, passionate, and a brilliant communicator. He is the most important progressive voice we have in this country." Naomi Klein said "Sirota is a clear-headed and principled hell-raiser for economic justice." In a review of his book, The Newark Star-Ledger said "Sirota is an enterprising, resourceful reporter," while the Rocky Mountain News said "Sirota is a true 21st-century political journalist" whose latest book is "Grade A...[It] has an inflammatory title that sounds rebellious and insurgent. But it actually is much less in-your-face, covering a year jet-setting around the nation talking to politicians" and is "the perfect tome for rebels of all persuasions." MSNBC's Rachel Maddow, who has Sirota on as a frequent guest, has called him an "all-around smart guy" who "has been ahead of the curve on the red-hot failures written into the mammoth Wall Street bailout.

Medical Myths

The right in the US sows the seeds of a tale of dysfunctional "socialized" medicine in Canada. They like to paint a picture of long lineups and distressed people fleeing south to the US to get the kind of care that you supposedly can't get in Canada.

Here's a blog entry by Paul Krugman that blows up that myth:
Everyone knows that lots of Canadians come to America in search of medical care. But what everyone knows is wrong: a careful study concluded,
The numbers of true medical refugees—Canadians coming south with their own money to purchase U.S. health care—appear to be handfuls rather than hordes.
On the other hand:
Driven by rising health care costs at home, nearly 1 million Californians cross the border each year to seek medical care in Mexico, according a new paper by UCLA researchers and colleagues published today in the journal Medical Care.

Brooks on Obama

I've been hot-and-cold on David Brooks. I liked his book Bobos in Paradise. I've enjoyed some of his NY Times articles. But during the height of the Bush admin I came to loathe him. Towards the end of that crazed time, Brooks distanced himself from Bush. He has been edging back toward points of view that I can appreciate.

So, with that in mind, that Brooks is on the right, it is interesting to watch this interview of David Brooks by Charlie Rose dealing with the Obama-Cheney fight over US national security:

Here are bits from the Brooks op-ed in the NY Times that is referenced in the above interview:
President Obama and Dick Cheney conspired on Thursday to propagate a myth. The myth is that we lived through an eight-year period of Bush-Cheney anti-terror policy and now we have entered a very different period called the Obama-Biden anti-terror policy. As both Obama and Cheney understand, this is a completely bogus distortion of history.

The reality is that after Sept. 11, we entered a two- or three-year period of what you might call Bush-Cheney policy. The country was blindsided. Intelligence officials knew next to nothing about the threats arrayed against them. The Bush administration tried just about everything to discover and prevent threats. The Bush people believed they were operating within the law but they did things most of us now find morally offensive and counterproductive.

The Bush-Cheney period lasted maybe three years. For Dick Cheney those might be the golden years. For Democrats, it is surely the period they want to forever hang around the necks of the Republican Party. But that period ended long ago.

By 2005, what you might call the Bush-Rice-Hadley era had begun. Gradually, in fits and starts, a series of Bush administration officials — including Condoleezza Rice, Stephen Hadley, Jack Goldsmith and John Bellinger — tried to rein in the excesses of the Bush-Cheney period. They didn’t win every fight, and they were prodded by court decisions and public outrage, but the gradual evolution of policy was clear.


Cheney and Obama might pretend otherwise, but it wasn’t the Obama administration that halted the practice of waterboarding. It was a succession of C.I.A. directors starting in March 2003, even before a devastating report by the C.I.A. inspector general in 2004.

When Cheney lambastes the change in security policy, he’s not really attacking the Obama administration. He’s attacking the Bush administration. In his speech on Thursday, he repeated in public a lot of the same arguments he had been making within the Bush White House as the policy decisions went more and more the other way.

The inauguration of Barack Obama has simply not marked a dramatic shift in the substance of American anti-terror policy. It has marked a shift in the public credibility of that policy.
Go read the whole article. It is interesting.

Tuesday, May 26, 2009

Technocrats big on Crat small on Techno

I enjoy Dean Baker's blog for pointing out that the emperor has no clothes. Here he takes on the "economists" in Washington (the policy people who claim to factor economics into their decision-making) who show stunning ignorance of the real world.

Supposedly Washington is staffed by "technocrats" who bring technique (root: techne) to their power (root: crat). But Baker shows that have precious real technique to guide their idiotic use of power:
There is a bizarre theory circulating in high Washington circles, expressed today by Sebastian Mallaby in the Post, that China is concerned that the huge dollar reserves it holds will lose value. The reason this is bizarre is that the dollar already plunged in value over the years 2002-2008 and China just kept buying more dollars.

The euro went from being worth just over 80 cents at the dollar peak in 2002 to over $1.60 at its trough early last year. Through this whole slide, China just kept buying up more dollars. Does anyone think that China's leaders did not notice the plunge in the value of the dollar? This is not exactly secret information.

Obviously, China's central bank was fully aware that the dollar was losing value but was willing to buy dollars anyhow in order to preserve its export market in the United States. That is the reason that it continues to buy dollars even though its leaders know that they will lose money on the deal. The economy can easily afford the loss, contrary to the bizarre calculations Mallaby uses in his column.

If it seems strange that elite Washington types can push economic views that are far removed from reality, remember, these people could not see an $8 trillion housing bubble.
If you wonder how the SEC couldn't spot a $50 billion Ponzi scheme even though the whistleblower, Harry Markopolos, on multiple occasions gave them all the evidence necessary, the above gives you an idea of the breadth and depth of ignorance that passes for expertise in the US capital. It is a meritocracy gone sour, it is technocracy where real experts are barred while incompetents fight for position at the public trough. Sad.

Heritability of Wealth, and Greed

Here is an interesting blog posting by Bryan Caplan. He's an economist at George Mason U. and a libertarian, that a right wing political stance. I generally ignore right wingers, but libertarians tend to be more thoughtful than most, so I will read their material. Here's his thoughts on wealth, heredity, and greed:
Is Greed in the Genes?
Bryan Caplan

Behavioral geneticists will tell you that intelligence and personality are highly heritable. But at least for economists, intelligence and personality are mainly interesting insofar as they predict that variable that "really" counts - income. How heritable is that?

Quite. This 2002 paper by Bowles and Gintis reports that identical twins' incomes have a correlation of .56, versus .36 for fraternal twins. Using standard formulae, this implies that genes explains 40% of the variance of income, family environment 16%, and non-shared environment 44%. A recent working paper by David Cesarini gets income correlations of .545 for identicals versus .266 for fraternals, implying that genes explain 56% of the variance, shared environment -1%, and non-shared environment 45%.

It's easy at this point to say, "Of course! Intelligence has a large effect on income and is highly heritable, so it follows that income will be highly heritable, too." But Bowles and Gintis show that the heritability of income is far larger than the IQ effect can explain. (See Arnold's doubts here).

What if you add in personality measures? David Cesarini does just this - and finds that measures of IQ and personality explain a bit more than one-third of the heritaibility of income. That's a lot more than B&G got, but the glass is still two-thirds empty.

So where are the other two-thirds of the income heritability coming from? Here's an hypothesis that seems promising to me:

1. Standard personality tests largely neglect the personality trait of greediness. (Alternate labels: Orientation toward money, materialism...)

2. Greediness is moderately-strongly heritable.

3. Greediness strongly predicts income, all else equal.

Take me, for instance. IQ tests say I'm smart, and personality tests say I'm conscientious. But money doesn't matter much to me. When someone leaves academia to earn five times the income, I don't feel envious; I feel relieved not be to leaving academia! The end result: While I'm financially comfortable, I earn a lot less than many people with similar intelligence and work ethic.

So what do you think? If measured intelligence and conscientiousness account for one-third of the heritability of income, how much could measured greediness explain?
Go read the original to get the links embedded in the document.

Monday, May 25, 2009

A Difficult Point to Understand

Pity poor Dean Baker. He keeps harping on basic economics but can't get the Washington Post to understand it. Instead they obstinately push an economic agenda that infuriates poor Dean Baker.

Here is the latest installment of his on-going effort to educate the Washington Post:
Washington Post: Give the Rich More Money

The Washington Post regularly displays its contempt, in both the news and editorial sections, for ordinary workers, as well as its fondness for the wealthy, especially bankers. It does so yet again by running a column today by a "global financial strategist" who tells readers that we need the wealthy to have more money so that they will spend it.

Of course anyone can spend money if they have the money. If we want more moderate income people to spend money, instead of trying to push up the stock market, the policy implicitly endorsed by this column, we could have a policy of pushing up the price of old cars and small houses. The Fed could have a special fund that could be used to make zero interest loans to buy cars that are more than 20 years old or houses that cost less than $200,000. This would make moderate income people wealthier and cause them to spend more money.

Alternatively, we could apply similar measures internationally. We could have the Fed buy up $4 trillion worth of currencies of countries with per capita income of less than $3,000 a year. This would put money in these people's pockets and cause them to buy more things including more goods produced in the United States.

In short, there is no reason why we should try to make the wealthy happy to get them to spend more money. Anyone is capable of spending more money if we give them the means to do so, not just the rich.
As they say "it is hard to get a man to understand something when his salary depends on not understanding it". The owners & hacks at the Washington Post are in the pockets of the rich, so they have a really, really hard time understanding why they shouldn't act as waterboys for the rich.

Looking for a Bailout (Nation)

I'm eagerly champing at the bit waiting for my local library to get its copy of Barry Ritholtz's Bailout Nation.

Here's a bit from a blog entry where he explains the three versions of the book as the financial crisis tore up the ground under his feet:
The third version was the charm.

By now, the amount of bailout money going to mismanaged companies, reckless speculators, and incompetent corporate executives had skyrocketed to 14 trillion dollars. This was infuriating to anyone paying attention.

Astonishing things happened as the book progresses. The more I researched and wrote, the more it was apparent we were witnessing the greatest heist ever made. By the last section of the book, history’s biggest transfer of wealth — from the taxpayer to the Banksters — was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It was infuriating — and you will see as the book progresses my initial academic tone gets replaced with greater snark and anger.

I not only had my ending, I had a new cause — exposing those who caused this mess, be they Democrat or Republican, Corporate CEO or derivatives trader.
Go read the whole blog entry.

Then go read the book...

Political Spin

The following blog entry from Obsidian Wings is an excellent dissection of how the Republicans use trickery to mislead the public:
Robert Samuelson's Dishonest Jihad Against Social Security

by publius

If the country ever gets around to ending life tenure for Supreme Court Justices, I hope we add a provision ending it for Washington Post columnists too. Or at least ending it for Robert Samuelson. Today, again, we see another extremely misleading op-ed from him on the fiscal health of Social Security.

Here’s a good rule of thumb – anytime you see an op-ed whining about entitlements that uses the phrase “Medicare and Social Security,” it’s safe to stop reading. Samuelson’s is no exception.

This isn’t news, but let’s repeat it for the one millionth time. There is no Social Security crisis. None.

Medicare and Social Security’s fiscal outlooks are completely different. There is no Social Security funding emergency – even after the latest trustees report. Assuming historical rates of growth, there is no shortfall whatsoever for 75 years. Even under more conservative or pessimistic economic assumptions, extremely modest tweaks eliminate the modest shortfall entirely.

And finally – Social Security is not going “bankrupt.” Even assuming 2037 is the magic date, and assuming low growth and no tinkering before then, Social Security will still be able to pay 75% of scheduled benefits.

To lump Social Security together with the more problematic Medicare shortfall (which should be addressed through national health care reform) is blatantly misleading. It’s like saying the combination of a Big Mac and a jelly bean is an extremely high-calorie meal.

But that’s exactly what Samuelson is doing. In fact, Michael Lind had a Salon column a while back outlining all the rhetorical tricks that dishonest Social Security skeptics make. It’s as if Samuelson read that column, and decided to use them all.

For instance, here’s Lind:
In order to frighten gullible Americans, anti-Social Security crusaders conflate Social Security with Medicare and talk about the "entitlement crisis" in general. This masks the fact that Social Security's projected shortfalls are minor, compared to those of Medicare.
And Samuelson:
It's increasingly obvious that Congress and the president (regardless of the party in power) will deal with the political stink bomb of an aging society only if forced. And the most plausible means of compulsion would be for Social Security and Medicare to go bankrupt.
And Lind:
About a decade ago, conservative and libertarian economists who oppose Social Security, Medicare and other entitlements came up with a clever rhetorical strategy. They would calculate the gap between the payroll taxes that pay for these programs and estimated costs over time. But there was one problem: The gap isn't all that scary, at least in the near future. So in order to frighten the American people and their elected leaders, deficit hawks cite the sum total of Social Security's "unfunded liabilities" over 75 years. But even this -- a paltry $4.3 trillion over three-quarters of a century, according to the 2008 report -- isn't sufficiently terrifying. [So they combine Medicare and SS]. [This] produces a suitably spooky 75-year shortfall of $42.9 trillion. And if this is not alarming enough, deficit hawks can cite the truly apocalyptic figure of $101.7 trillion in combined "entitlement" spending over an infinite time horizon.

The anti-Social Security lobby always presents the "unfunded liabilities" of "entitlements" in scary dollar terms, rather than as percentage points of GDP. Here's why: Over the next 75 years, the Social Security shortfall at most hovers around 1 percent of total U.S. GDP over that same period.
And Samuelson:
That the programs will ultimately go bankrupt is clear from the trustees' reports. On Pages 201 and 202 of the Medicare report, you will find the conclusive arithmetic: Over the next 75 years, Social Security and Medicare will cost an estimated $103.2 trillion, while dedicated taxes and premiums will total only $57.4 trillion. The gap is $45.8 trillion. (All figures are converted to "today's dollars.")
[According to anti-Social Security advocates,] [w]e have only two choices, or a combination -- cutting benefits or raising the payroll tax. False. There are at least two other choices that the deficit hawks never mention. One is more rapid economic growth, which would make it easier to pay Social Security taxes in the future without either benefit cuts or tax increases.
And Samuelson:
The inadequate trust funds will steadily diminish. The government bonds in these trust accounts will be presented to the Treasury for payment. Those payments can be financed in only three ways: bigger deficits, higher taxes or spending cuts.
One more time – there is no Social Security crisis, no matter how much people like Robert Samuelson dislike the level of Social Security benefits.

Political Idiocy

This is what passes for "political dialog" from the Republicans in the US: character assassination, inuendo, using video to pick at personal foibles. Rather than talk issues, they sleazily use video clips with voice-over and text-over to distort facts. They aren't comfortable putting out a political platform and debating it. They use Madison Avenue manipulation instead...

The same is now happening in Canada...

Canada's Conservative Party has followed the Republican Party of the US. Here is their lastest "attack ad". This political slander dressed up as "political dialog".

Mary Roach on the Lazarus Effect

Here's one of my favourite authors, Mary Roach, giving a presentation called "Ten Things You Don't Know about Orgasm". This talk is based on her book "Bonk". She is speaking in February 2009 at a TED conference.

You can get an idea of her quirky personality, zesty and humourous approach, and deep interest in arcane facts from this video. But I warn you, this is a pale imitation of her books. She's a better writer than a speaker:

If you watch the video you will see her talk about the Lazarus effect. It is one of many wildly interesting tidbits she serves up.

Krugman's California

In his latest op-ed in the NY Times, Paul Krugman is pessimistic about politics in the US. The Republican party seems determined to turn the country into a banana republic. I've put in bold the key bits:
California, it has long been claimed, is where the future happens first. But is that still true? If it is, God help America.

The recession has hit the Golden State hard. The housing bubble was bigger there than almost anywhere else, and the bust has been bigger too. California’s unemployment rate, at 11 percent, is the fifth-highest in the nation. And the state’s revenues have suffered accordingly.

What’s really alarming about California, however, is the political system’s inability to rise to the occasion.

Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is — and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.

The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.

Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.

For California, where the Republicans began their transformation from the party of Eisenhower to the party of Reagan, is also the place where they began their next transformation, into the party of Rush Limbaugh. As the political tide has turned against California Republicans, the party’s remaining members have become ever more extreme, ever less interested in the actual business of governing.

And while the party’s growing extremism condemns it to seemingly permanent minority status — Mr. Schwarzenegger was and is sui generis — the Republican rump retains enough seats in the Legislature to block any responsible action in the face of the fiscal crisis.

Will the same thing happen to the nation as a whole?

Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it’s spending to rescue the economy and the banks. Is that a real possibility?

Well, in a rational world Mr. Gross’s warning would make no sense. America’s projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments — and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the current crisis, in other words, should be manageable.

But that presumes that we’ll be able, as a political matter, to act responsibly. The example of California shows that this is by no means guaranteed. And the political problems that have plagued California for years are now increasingly apparent at a national level.

To be blunt: recent events suggest that the Republican Party has been driven mad by lack of power. The few remaining moderates have been defeated, have fled, or are being driven out. What’s left is a party whose national committee has just passed a resolution solemnly declaring that Democrats are “dedicated to restructuring American society along socialist ideals,” and released a video comparing Speaker of the House Nancy Pelosi to Pussy Galore.

And that party still has 40 senators.

So will America follow California into ungovernability? Well, California has some special weaknesses that aren’t shared by the federal government. In particular, tax increases at the federal level don’t require a two-thirds majority, and can in some cases bypass the filibuster. So acting responsibly should be easier in Washington than in Sacramento.

But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?
For anyone outside the US, the politics inside the US are a kind of scary madness. Just like the Germans of the 1930s were haunted by the loss of WWI, mesmerized by the idiotic claim of a 'stab in the back', and the collapse of the German mark that destroyed the middle class, the US is haunted by a politics of fear fed by the Republicans. They sell the snakeoil of "tax cuts pay for themselves" and use the big lie technique of an America "burdened by high taxes". I sure hope the US gets through the current crisis without going off the rails like Germany in 1933.

On the one hand, history scares me. On the other hand, history shows me that the US has been caught up in crazy manias in the past and righted itself. Think of the wildfire spread of the KKK in the 1920s, the thuggery of Southern towns and the quiet red-lining of Northern cities in the great 1960s civil rights fight, the Palmer raids around 1920, the fascist rantings of Father Coughlin, the Rockerfellers flexing their anti-union arm in the Ludlow masscre, the infamous massacre by Carnegie of the striking workers at Homestead Pennsylvania, the religious mania caused by manipulators like Aimee Semple McPherson, etc. History is filled with sad stories and twisted politics and the elite manipulating things to their advantage. The good news is that life goes on. In the end, the tyrants die, the manipulators make their one big mistake, and the greedy fall because of one last over-reaching grasp. It is truly sad to see Paul Krugman disheartened. He is right to worry. But in the end, I believe the US will right itself yet again and get past this dark history.

The Dark Arts of Torture

In her latest NY Times op-ed, Maureen Dowd takes another swipe at the various malfactors of torture:
Dick Cheney has done many dastardly things. But presiding over policies so saturnine that they ended up putting the liberal speaker from San Francisco on the hot seat about torture may be one of his proudest achievements.

Nancy Pelosi's bad week of blithering responses about why she did nothing after being briefed on torture has given Republicans one of their happiest -- and harpy-est -- weeks in a long time. They relished casting Pelosi as contemptible for not fighting harder to stop their contemptible depredations against the Constitution. That's Cheneyesque chutzpah.

The stylish grandmother acted like a stammering child caught red-handed, refusing to admit any fault and pointing the finger at a convenient scapegoat. She charged the C.I.A. with misleading Congress, which is sort of like saying the butler did it, or accusing a generic thuggish-looking guy in a knit cap with gang tattoos to distract from your sin.

Although the briefing was classified, she could have slugged it out privately with Bush officials. But she was busy trying to be the first woman to lead a major party. And very few watchdogs -- in the Democratic Party or the press -- were pushing back against the Bush horde in 2002 and 2003, when magazines were gushing about W. and Cheney as conquering heroes.

Leon Panetta, the new C.I.A. chief, who is Pelosi's friend and former Democratic House colleague from California, slapped her on Friday, saying that the agency briefers were truthful. And Jon Stewart ribbed that the glossily groomed speaker was just another ''Miss California U.S.A. who's also been revealing a little too much of herself.''

It's discomfiting to think that the woman who's making Joe Biden seem suave is second in line to the presidency.

Of course, a lot of the hoo-ha around Pelosi makes it sound as if she knew stuff that no one else had any inkling of, when in fact the entire world had a pretty good idea of what was happening. The Bushies plied their dark arts in broad daylight.

Besides, the question of what Pelosi knew or didn't, or when she did or didn't know, is irrelevant to how W. and Cheney broke the law and authorized torture.

Philip Zelikow, who was State Department counselor for Condi Rice and executive director of the 9/11 Commission, testified last week before Congress that torture was ''a collective failure and it was a mistake,'' perhaps ''a disastrous one.''


Ali Soufan, the ex-F.B.I. agent who flatly calls torture ''ineffective,'' helped get valuable information from Abu Zubaydah, an important Al Qaeda prisoner, simply by outwitting him. Torture, he told Congress, is designed to force the subject to submit ''through humiliation and cruelty'' and ''see the interrogator as the master who controls his pain.''

It's a good description of the bullying approach Cheney and Rummy applied to the globe, and the Arab world. But as Soufan noted, when you try to force compliance rather than elicit cooperation, it's prone to backfire.


In The Washington Note, a political and foreign policy blog, Col. Lawrence Wilkerson, Colin Powell's former chief of staff at State, wrote that the ''harsh interrogation in April and May of 2002 ... was not aimed at pre-empting another terrorist attack on the U.S. but discovering a smoking gun linking Iraq and Al Qaeda.''

More and more the timeline is raising the question of why, if the torture was to prevent terrorist attacks, it seemed to happen mainly during the period when the Bush crowd was looking for what was essentially political information to justify the invasion of Iraq.

I used to agree with President Obama, that it was better to keep moving and focus on our myriad problems than wallow in the darkness of the past. But now I want a full accounting. I want to know every awful act committed in the name of self-defense and patriotism. Even if it only makes one ambitious congresswoman pay more attention in some future briefing about some future secret technique that is ''uniquely'' designed to protect us, it will be worth it.
The Cheney slight-of-hand trick to move focus away from torture and onto Nancy Pelosi makes me sick. The Bush/Cheney years were filled with this kind of cynical political manipulation. They successfully kept the media focused on minor issues while they made the world a darker, meaner place. Cheney is the same guy who went on the Sunday talk shows calming assuring everyone that weapons of mass destruction would be found in Iraq. Cheney is the one who had Bush fly all over kingdom come on 9/11 as if there were some spiffy technology that would allow a bunch of bearded religious nuts hiding in Afghanistan to track and shoot down a presidential plane.

The real joke on 9/11 was that Bush lamely read the book "My Pet Goat" as the US was attacked and then when his entourage finally left to get him to a "command centre" the presidential motorcade got lost and had to backtrack, pitiful!

The Katrina catastrophe showed Bush/Cheney as cynical as Nero fiddling while Rome burned. The push to torture to "prove" links between Saddam Hussein and Al Qaeda showed the kind of murderous monomania that rules in those dark years.

So having Cheney come back and use his swave voice and assured manner to sell his poisonous arts yet again is disgusting. And to she him succeed so effortlessly is frightening.

Sunday, May 24, 2009

The Trouble with Geithner

Here is a blog entry on the Calculated Risk website that points out the incredible obtuseness of Timothy Geithner...
A WaPo interview with Secretary Geithner ...

WaPo's Lois Romano: "You mentioned that Americans borrowed beyond their means. When you look at the collapse of the housing market, who do you think bears the greatest responsibility? Is it the banks for pushing these loans? Is it the consumer for borrowing over their means? The regulators? Where do you see the fault lines there?"

Geithner: "For something this big and damaging to happen it takes a lot of mistakes over time. And it is that combination of things. Interest rate here and around the world were kept too low for too long. Investors made - took a bunch of risks without understanding the risks. They were betting on the expectation that house prices would continue to go up - to go up forever. Rating agencies failed to rate these products adequately. Supervisors failed to underwrite loans with sufficiently conservative standards. So those basic checks and balances failed. And people borrowed too much. It took all those things for it to happen."

CR Note: (short transcript by CR). Although there were many factors in the housing and credit bubble, the two keys were: 1) rapid innovation in the mortgage industry (securitization, automated underwriting, rapidly expanded wholesale lending, etc), and 2) a complete lack of oversight by regulators. As the late William Seidman wrote in his memoir (published in 1993): "Instruct regulators to look for the newest fad in the industry and examine it with great care. The next mistake will be a new way to make a loan that will not be repaid."

Geithner failed to mention the rapid changes in lending and the failure of government oversight as the two critical causes of the bubble. Either Geithner misspoke or he still doesn't understand what happened - and that is deeply troubling.
Obama has made some stumbles and some mistakes. Geither is an outrageous pratfall by Obama. The guy was at the heart of the problem. To give him the keys to the kingdom is incredibly stupid. The above interview confirms it.