Tuesday, January 31, 2012

Looking Through Lovely Libertarian Glasses

When I was a kid the big complain was the bizarro world painted by "socialist realism". The hyped and deeply false world view sold by the commies.

Today the world is pervaded by its bizarro world version of reality, the kool-aid of Ayn Rand, that worships the individual and ignores any gummy social cohesion or social obligation. It is every man for himself in the wonder world of the political right. No mushy leftist "it takes a village to raise a child" in the libertarian worldview.

Here is a bit from a NY Times op-ed by Paul Krugman that shows the application of this libertarian "individualist realism" to politics in the US:
Mr. Daniels first berated the president for his “constant disparagement of people in business,” which happens to be a complete fabrication. Mr. Obama has never done anything of the sort. He went on: “The late Steve Jobs — what a fitting name he had — created more of them than all those stimulus dollars the president borrowed and blew.”

...

A big report in The Times last Sunday laid out the facts. Although Apple is now America’s biggest U.S. corporation as measured by market value, it employs only 43,000 people in the United States, a tenth as many as General Motors employed when it was the largest American firm.

Apple does, however, indirectly employ around 700,000 people in its various suppliers. Unfortunately, almost none of those people are in America.

...

Germany remains a highly successful exporter even with workers who cost, on average, $44 an hour — much more than the average cost of American workers. And this success has a lot to do with the support its small and medium-sized companies — the famed Mittelstand — provide to each other via shared suppliers and the maintenance of a skilled work force.

The point is that successful companies — or, at any rate, companies that make a large contribution to a nation’s economy — don’t exist in isolation. Prosperity depends on the synergy between companies, on the cluster, not the individual entrepreneur.

But the current Republican worldview has no room for such considerations. From the G.O.P.’s perspective, it’s all about the heroic entrepreneur, the John Galt, I mean Steve Jobs-type “job creator” who showers benefits on the rest of us and who must, of course, be rewarded with tax rates lower than those paid by many middle-class workers.

...

So we should be grateful to Mr. Daniels for his remarks Tuesday. He got his facts wrong, but he did, unintentionally, manage to highlight an important philosophical difference between the parties. One side believes that economies succeed solely thanks to heroic entrepreneurs; the other has nothing against entrepreneurs, but believes that entrepreneurs need a supportive environment, and that sometimes government has to help create or sustain that supportive environment.

And the view that it takes more than business heroes is the one that fits the facts.
For some reason most people want a cartoon cut-out version of reality. They want a simplified story that consoles them with a happy ending. The real world, just like Nature, is totally indifferent to humans, their aspirations, their needs, or their ideological fantasies. The real world is "red in tooth and claw" because it is so different from the normal human social world of cooperation and empathy. Humans have the ability to create a safe harbour from the cruelties of the world. Sadly, right wing nuts want to destroy the paradise and replace it with a fantasy of "the big man" who creates and destroys for his own pleasure with indifference to others. That is a cruel reality that is offered up by the libertarians as a "better future". Nuts!

Monday, January 30, 2012

Neville Chamberlain, the Hero

You would think in 70 years the world would "progress" and leaders would have incorporated the lessons of the past and we would have a better world.

But, as Brad DeLong points out, despite Chamberlain's horrible appeasement policy with Hitler, he did get one thing right which leaders today in the UK have got horribly wrong:
Neville Chamberlain is remembered today as the British prime minister who, as an avatar of appeasement of Nazi Germany in the late 1930’s, helped to usher Europe into World War II. But, earlier in that fateful decade, relatively soon after the start of the Great Depression, the British economy was rapidly returning to its previous level of output, thanks to Chancellor of the Exchequer Neville Chamberlain’s reliance on fiscal stimulus to restore the price level to its pre-depression trajectory.

Compare that approach to the expansion-through-austerity policy being pursued nowadays by British Prime Minister David Cameron’s government (with Chancellor of the Exchequer George Osborne leading the cheering squad). The country’s real GDP has flat-lined, and the odds are high that British real GDP is headed down again.

Indeed, in less than a year, if current forecasts are correct, Britain’s Cameron-Osborne Depression will not merely be the worst depression in Britain since the Great Depression, but probably the worst depression in Britain…ever.

Willful Ignorance

Here is a bit from a NY Times op-ed by Paul Krugman that slams what he calls "the serious people", the ideological right, that has called for austerity as the magic elixir for recovering from the worldwide George Bush-induced Depression:
How could the economy thrive when unemployment was already high, and government policies were directly reducing employment even further? Confidence! “I firmly believe,” declared Jean-Claude Trichet — at the time the president of the European Central Bank, and a strong advocate of the doctrine of expansionary austerity — “that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.”

Such invocations of the confidence fairy were never plausible; researchers at the International Monetary Fund and elsewhere quickly debunked the supposed evidence that spending cuts create jobs. Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas.

Thus in October 2010 David Broder, who virtually embodied conventional wisdom, praised Mr. Cameron for his boldness, and in particular for “brushing aside the warnings of economists that the sudden, severe medicine could cut short Britain’s economic recovery and throw the nation back into recession.” He then called on President Obama to “do a Cameron” and pursue “a radical rollback of the welfare state now.”

Strange to say, however, those warnings from economists proved all too accurate. And we’re quite fortunate that Mr. Obama did not, in fact, do a Cameron.

Which is not to say that all is well with U.S. policy. True, the federal government has avoided all-out austerity. But state and local governments, which must run more or less balanced budgets, have slashed spending and employment as federal aid runs out — and this has been a major drag on the overall economy. Without those spending cuts, we might already have been on the road to self-sustaining growth; as it is, recovery still hangs in the balance.

And we may get tipped in the wrong direction by Continental Europe, where austerity policies are having the same effect as in Britain, with many signs pointing to recession this year.

The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.
The tragedy is that policy makers and right wing economists prefer lies and "the confidence fairy" more than the simple truth and hard won economic truths. The economics profession has shown itself to be in the hands of charlatans who are willing to corrupt truths won from the Great Depression experience in order to push a political agenda. Tragic!

As always it is the bottom 99% who die when the 1% "generals" order a charge into an open field where they are gunned down by withering machine gun fire (aka reality). But the generals blame the troops and order up another charge. The 99% are expendable. Everybody knows that the 1% are the "cream of society" and must be protected in their ideological bubble at all costs.

Sunday, January 29, 2012

Why the Media is Useless

Here is a post by Dean Baker in his Beat the Press blog:
The Post devoted a business section article to Newt Gingrich's supply side economics. It would have been useful to note the findings of the research on this topic, for example this Congressional Budget Office study. It found that even in a best case scenario the additional growth sparked by a tax cut could replace less than a third of the lost tax revenue. Even this effect would be temporary, with slower growth in later years implying larger deficits.

The Post should not just throw Gingrich's assertions out to readers as though they might be true. There is extensive research on this topic which the Post's business reporters should be familiar, its readers almost certainly are not.
A democracy works only if it has an informed electorate. The reason why "the press" was acknowledged and highlighted in the First Amendment to the Constitution. A free press is important. But a commercial press that prints only what corporations and the rich elite want the people to hear is not a truly "free" press. The Constitution called for "freedom of the press". Only with a free press that prints facts, truths, revelations, analysis, criticism will the electorate be empowered to vote responsibly.

Sadly, Dean Baker is pointing out that the US now fails the test of democracy. The US is rapidly becoming a banana republic.

Saturday, January 28, 2012

For the Love of Art

It is amazing what people will do for the love of art (and maybe a cash payout)...

Mortgage Fraud: A Glimmer of Hope

Here is an interview of Matt Taibbi:

Friday, January 27, 2012

Mortgages: Canada vs. US

Here is a bit by Sherry Cooper, chief economist for the Bank of Montreal. From BMO's weekly publication Focus:
Amid concern about a Canadian housing bubble, the question of the financial strength of the major Canadian mortgage insurer, CMHC, has come to the forefront. The bottom line is that CMHC is solid. CMHC has very prudent underwriting standards and the quality of its insured mortgage portfolio is strong. The rate of delinquencies is very low and stable, remaining in line with the levels for Canadian banks—under 0.5%, compared to 8% in the U.S.

CMHC is governed by a Board of Directors and accountable to Parliament through the Minister of Human Resources and Skills Development. As a Crown corporation, CMHC is also required to meet a number of governance and accountability requirements under the Financial Administration Act and the CMHC Act.

CMHC’s capital is funded by its insurance premiums, fees and investment income on the securitization portfolio of the Canada Housing Trust (CHT). It holds capital at a level nearly three times the mandatory minimum level set by OSFI to protect Canadian taxpayers from the costs arising from the risk of mortgage defaults1. CMHC has an internal (self-imposed) capital target of 150% of the OSFI Minimum Capital Test (MCT) and a capital holding target of 200% of MCT. In addition, they maintain additional capital reserves in retained earnings and unearned premiums and fees.

If CMHC is uncomfortable with the terms of a mortgage loan presented by lenders, then mitigating measures, such as an additional down payment or reduced amortization, would be requested—the minimum standard for the latter was officially reduced in Q1 of last year.

CMHC is also subject to stress testing for extreme circumstances similar to the banks. Even under the most extreme tests, with house prices plunging 30% and the economy going into a deep recession (with spiking interest rates—highly unlikely), CMHC comes through without relying on taxpayer funding.

Indeed, historically, CMHC earns an annual budget surplus that reduces the federal government’s outstanding deficit. Over the last decade, CMHC contributed over $14 billion to the government’s coffers.
The difference between Canada and America is very simple: Canadians believe in government and our regulators take their job seriously. In the US the people hate government and taxes and the regulators drank the kool-aid of "deregulation". Simply put: Canada believes in civil society while the US is a Hobbesian struggle of all-against-all.

Wednesday, January 25, 2012

A Real Bird's Eye View

Technology marches on with fancy new airborne platforms for fancy camera shots...

Tuesday, January 24, 2012

Brain in a Box

There is no ghost in the machine. It is turtles all the way down. Or as Julien Offray de La Mettrie put it Man a Machine:



The above needs to be tempered. Our positivist and reductionist scientific worldview makes claims that go too far for a pragmatist. From a section in Lecture 47 of Daniel N. Robinson's The Great Ideas of Philosophy, 2nd Edition:
[William] James the pluralist is not a relativist of the modern stripe. He countered the reigning positivism of his day with fallibilism. There is always more to the account than any current version can include, because there are always other experiences, other beliefs, and needs. We must conduct ourselves in such a way as to record what we take to be our highest interests, while never knowing if we have them right or have matched our interests by our actions. There is no final word.

William James was, above all, a realist: We must accept what is. Unlike the positivists, however, James took this to mean that we must accept that there is a religious element to life, because credible report points to the existence of one, as well as to a striving to perfect oneself and to needs that go beyond the individual soul or body. There are, however, things that we cannot finally know. The fallibilist doesn't deny that there is some absolute point of focus on which human interests can converge, but we are warned to be suspicious of those who come to us with final answers.
The most profound lesson of modernism is to recognize the limits of our reason, the limits to knowlege, and the ultimate fallibility or each of us. The existentialist is right in noting that we project ourselves into our future with a hope that has no foundation. In the end we all die, but we live as if we would live forever. We theorize as if there is "ultimate truth" when in fact we live in a very small corner of an inconceivably huge universe in which we don't even know how many physical dimensions exist or whether there are other "universes out there" beyond our ken.

In some deep sense we are a "brain in a box" but science has not plumbed the depths of what this means. Yes, we are "only" matter in motion. But that matter, the brain, is so infinitely more complex than a figure like de La Mettrie had not a hint of what it truly means. And just as de La Mettrie claimed more than he really knew, so today's scientists and philosophers make claims far beyond what will be ultimately revealed. The universe is far more complex and mysterious than the human mind will ever comprehend. But that doesn't mean that we don't enjoy the quest. Knowledge and truth are still the shining lights on high that we strive to attain.

Sunday, January 22, 2012

America Has a Choice of Victims

Maureen Dowd has a good op-ed in the NY Times in which she looks at the Obamas since of "underappreciation" by the American public. Then she widens it to include Newt Gingerich who feels he is similarly underappreciated and misprepresented by the press:
The Obamas, especially Michelle, have radiated the sense that Americans do not appreciate what they sacrifice by living in a gilded cage. They’ve forgotten Rule No. 1 of politics: No one sheds tears for anyone lucky enough to live at the White House. And after four or eight years of public service, you are assured membership in the 1 percent club.

The Obamas truly feel like victims. But Newt Gingrich, who campaigns by attacking the culture of victimization, plays one on stage. He soared at the Charleston CNN debate by brazenly proclaiming himself the victim of “the elite media protecting Barack Obama” (the same Obama who told Time he was victimized by the press). Newt’s gambit was a calculated way of deflecting attention from a charge by his second wife, Marianne, that the family values he preaches are hypocritical platitudes, given his cheating ways with two wives he divorced when they were ill.

Could 2012, remarkably, be a race between two powerful victims yearning to be lonely at the top?
This is ridiculous. A leader needs to be psychological secure and have a joy in backslapping and glad-handing with people. But the dsyfunctional US political system is giving the American people a choice between flub and flop in the November poll.

Voting in introverts, narcissists, or those who see themselves as victims is asking for perverted politics and a poisoned civil society.

Thursday, January 19, 2012

Tilting at Windmills

Here is Robert Reich, ex-Secretary of Labor under Clinton making a call from the political left for people to take back control of their government from the corruption of money and power by corporations and the ultra-rich.



Sadly, it looks like the plutocrats have got things pretty well sewn up and only if there is real revolution with blood in the streets will the clock be turned back to a true republic. The US over the last few decades has passed over the Rubicon and like the age of Imperial Rome, there is a pretense of "republican" government, but the real control is in the hands of very few, very very rich people. There is no going back. There is only collapse and decay in America's future. I've given up any pretense of optimism. Dark days are ahead.

Clay Shirky on America's Proposed Insane Property Rights

Here is Clay Shirky talking about SOPA and PIPA:










How the US Plans to Nuke the Rest of the World

The SOPA/PIPA legislation is in effect a "weapon of mass destruction" that will easily destroy the world as we know it. Here is a very nice description of just how dangerous and "creepy" the proposed SOPA and PIPA laws are:



The above is just one of many, many wonderful instructional videos available from the Khan Academy.

From Wikipedia:
The Khan Academy is a not-for-profit educational organization, created in 2006 by Bangladeshi American educator Salman Khan, a graduate of MIT. With the stated mission of "providing a high quality education to anyone, anywhere", the website supplies a free online collection of more than 2,600 micro lectures via video tutorials stored on YouTube teaching Mathematics, History, Healthcare & Medicine, Finance, Physics, Chemistry, Biology, Astronomy, Economics, Cosmology and Computer Science.

Tuesday, January 17, 2012

Measuring the "Success" of American Foreign Policy

The Americans blindly go around the world making bad situations worse while slapping themselves on the back and congratulating themselves about "spreading democracy" and "American values" throughout the world. The poor American public has no idea and little interest in the failed policies of their political leaders.

Here is a bit from an excellent article in the UK's Guardian newspaper giving an example of how Iraq has been "lifted up" from the horrors of Saddam Hussein's dark torture state to the light of a... what? a new torture state...
The walls of Um Hussein's living room in Baghdad are hung with the portraits of her missing sons. There are four of them, and each picture frame is decorated with plastic roses and green ribbons as an improvised wreath for the dead.

Um Hussein had six children. Her eldest son was killed by Sunni insurgents in 2005, when they took control of the neighbourhood. Three of her remaining sons were kidnapped by a Shia militia group when they left the neighbourhood to find work. They were never seen again.

She now lives with the rest of her family – a daughter, her last son, Yassir, and half a dozen orphaned grandchildren – in a tiny two-room apartment where the stink of sewage and cooking oil seeps through a thin curtain that separates the kitchen from the living room.

Um Hussein looks to be in her 60s and has one milky white eye. She is often confused and talks ramblingly about the young men in the portraits as if they are alive, then shouts at her daughter to bring tea. She told the Guardian how she had to fight to release Yassir from jail.

Yassir was detained in 2007. For three years she heard nothing of him and assumed he was dead like his brothers. Then one day she took a phone call from an officer who said she could go to visit him if she paid a bribe. She borrowed the money from her neighbour and set off for the prison.

"We waited until they brought him," she said. "His hands and legs were tied in metal chains like a criminal. I didn't know him from the torture. He wasn't my son, he was someone else. I cried: 'Your mother dies for you, my dear son.' I picked dirt from the floor and smacked it on my head. They dragged me out and wouldn't let me see him again.

"I have lost four. I told them I wouldn't lose this one."

Afterwards, the officers called from prison demanding hefty bribes to let him go while telling the family he was being tortured. Um Hussein told the officers she would pay, but they kept asking for more. First it was 1m Iraqi dinars (£560), then 2m, then 5m.
George Bush was an idiot whose ideology blinded him and allowed him to create horrors under the flag of "nation building" and "bringing democracy to the Middle East".

Obama is a much more sophisticated thinker who actually understands foreign policy, but sadly Obama continues the blunder and outrages of American "policy". It is clear that these horrors go deeper than just an "administration". What the US is doing around the world is obviously driven by a cynical need to control the world for the benefit of the rich elites in the US. The veneer of ideology or the cynical use of worlds like "freedom" and "democracy" and "women's rights" are rolled out to plaster a veneer of respectability to what is in fact a horror story passing for "foreign policy".

Selling Black is White, Up is Down

Here is a bit from a post by Robert Reich that nails the big lie that the political right in the US is selling to gullible electors:
Mitt Romney is casting the 2012 campaign as “free enterprise on trial” – defining free enterprise as achieving success through “hard work and risking-taking.” Tea-Party favorite Senator Jim DeMint of South Carolina says he’s supporting Romney because “we really need someone who understands how risk, taking risk … is the way we create jobs, create choices, expand freedom.” Chamber of Commerce President Tom Donahue, defending Romney, explains “this economy is about risk. If you don’t take risk, you can’t have success.”

Wait a minute. Who do they think are bearing the risks? Their blather about free enterprise risk-taking has it upside down. The higher you go in the economy, the easier it is to make money without taking any personal financial risk at all. The lower you go, the bigger the risks.

Wall Street has become the center of riskless free enterprise. Bankers risk other peoples’ money. If deals turn bad, they collect their fees in any event. The entire hedge-fund industry is designed to hedge bets so big investors can make money whether the price of assets they bet on rises or falls. And if the worst happens, the biggest bankers and investors now know they’ll be bailed out by taxpayers because they’re too big to fail.

But the worst examples of riskless free enteprise are the CEOs who rake in millions after they screw up royally.

Near the end of 2007, Charles Prince resigned as CEO of Citgroup after announcing the bank would need an additional $8 billion to $11 billion in write-downs related to sub-prime mortgages gone bad. Prince left with a princely $30 million in pension, stock awards, and stock options, along with an office, car, and a driver for five years.

Stanley O’Neal’s five-year tenure as CEO of Merrill Lynch ended about the same time, when it became clear Merrill would have to take tens of billions in write-downs on bad sub-prime mortgages and be bought up at a fire-sale price by Bank of America. O’Neal got a payout worth $162 million.

Philip Purcell, who left Morgan Stanley in 2005 after a shareholder revolt against him, took away $43.9 million plus $250,000 a year for life.

...

But as economic risk-taking has declined at the top, it’s been increasing at the middle and below. More than 20 percent of the American workforce is now “contingent” – temporary workers, contractors, independent consultants – with no security at all.

Even full-time workers who have put in decades with a company can now find themselves without a job overnight – with no parachute, no help finding another job, and no health insurance.

Meanwhile the proportion of large and medium-sized companies (200 or more workers) offering full health care coverage continues to drop – from 74 percent in 1980 to under 10 percent today. Twenty-five years ago, two-thirds of large and medium-sized employers also provided health insurance to their retirees. Now, fewer than 15 percent do.

The risk of getting old with no pension is also rising. In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed a fixed amount of money every month after they retired. Now it’s down to under 10 percent. Instead, they offer “defined contribution” plans where the risk is on the workers. When the stock market tanks, as it did in 2008, the 401(k) plan tanks along with it. Today, a third of all workers with defined-benefit plans contribute nothing, which means their employers don’t either.

And the risk of losing earnings continues to grow. Even before the crash of 2008, the Panel Study of Income Dynamics at University of Michigan found that over any given two-year stretch about half of all families experienced some decline in income. And the downturns were becoming progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.

What Romney and the cheerleaders of risk-taking free enterprise don’t want you to know is the risks of the economy have been shifting steadily away from CEOs and Wall Street – and on to average working people. It’s not just income and wealth that are surging to the top. Economic security is moving there as well, leaving the rest of us stranded.
Go read the whole post.

Pundits like to push the idea that "you get the government you deserve". But the reality is that the average voter doesn't have the time or resources to follow the political fluff thrown at him and sort the wheat from the chaff. When a corrupt political party like the Republicans in the US (and to a lesser degree the Democrats) deliberately sell a false message, it is very hard for the average person to uncover the truth.

Sunday, January 15, 2012

Death Knell for America

Here are the opening paragraphs of a very good article by Nobel Prize-winning economics Joseph Stiglitz:
The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment checks had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labor force – meant little to the 50 year olds with little hope of ever holding a job again.
This article goes on to spell out the dangers and horrors to be expected in 2012.

Here is his vision of the future:
Even before the crisis, there was a rebalancing of economic power – in fact, a correction of a 200-year historical anomaly, in which Asia’s share of global GDP fell from nearly 50% to, at one point, below 10%. The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the West’s misguided policies, which, driven by a combination of ideology and vested interests, almost seem to reflect a commitment not to grow.
Tragic.

Radicalism: How to Do Effective Politics

Here is a lecture by Lawrence Lessig:

Saturday, January 14, 2012

Technological Innovation

I need a "set up" like this to help me in my reading. I'm wearing myself out turning pages when a wonderful newfangled contraption like this would alleviate me of the strain and struggle of page-turning...

Why America is Confused

Here is the start of a post by Dean Baker on his Beat the Press blog that incisively identifies why the average American is completely confused about the economy, the role of big business, and who politics works:
David Brooks Is Projecting His Self Indulgence Again

Undoubtedly projecting from the fact that he can draw a nice 6-figure income for little obvious work, David Brooks complained in his column:

"Today, the country is middle-aged but self-indulgent. Bad habits have accumulated."

For the most part the column is a confused diatribe against the Obama administration's economic policies with a lecture on moral rectitude thrown in for good measure. He starts by condemning the efforts to stimulate the economy by telling readers:

"Today, Americans are more likely to fear government than be reassured by it.

"According to a Gallup survey, 64 percent of Americans polled said they believed that big government is the biggest threat to the country. Only 26 percent believed that big business is the biggest threat. As a result, the public has reacted to Obama’s activism with fear and anxiety. The Democrats lost 63 House seats in the 2010 elections."

One might think that the fact that the Obama administration relied on a stimulus that was only designed to lower the unemployment rate by 1.5-2.0 percentage points might have played a big role in the election defeat. (Read the number of jobs the stimulus was projected to create, not the baseline forecasts for the economy.) If the government had used bigger stimulus to get the unemployment rate down to say -- 7 percent -- it is difficult to believe that the Democrats would have suffered such a big defeat last year, in spite of people's fear of big government.

After dismissing the stimulative policies of the Great Depression, Brooks then gives us a beautifully crafted grand misunderstanding of economics comparing the economy today with the economy of the Progressive era:

"the underlying economic situations are very different. A century ago, the American economy was a vibrant jobs machine. Industrialization was volatile and cruel, but it produced millions of new jobs, sucking labor in from the countryside and from overseas.

"Today’s economy is not a jobs machine and lacks that bursting vibrancy. The rate of new business start-ups was declining even before the 2008 financial crisis. Companies are finding that they can get by with fewer workers. As President Obama has observed, factories that used to employ 1,000 workers can now be even more productive with less than 100."

The fact that factories can produce large amounts of output with 100 workers is in fact evidence of economic vibrancy, not the opposite. This is called "productivity growth." It is the main measure of the economy's ability to raise living standards through time. The fact that 100 people in a factory can produce the same output as 1000 people did 30 years ago means that we are potentially much richer than we were 30 years ago. We can have the other 900 people doing other productive work. Alternatively, we can all work many fewer hours.

Whether or not this productivity growth generates jobs depends on the structure of the economy. If the productivity growth translates into wage growth, as was the case with the very rapid productivity growth of early post-war period, then it is likely to be associated with a vibrant jobs machine. On the other hand, if the One Percent pocket most of the benefits of productivity growth, then we may have real problems of stagnation and lack of job growth, since the Bill Gateses of the world will probably not increase their spending much if they get another billion or two. The key issue here is the distribution of the gains of productivity growth, a simple fact that totally escapes Brooks.
Go read the whole article. There is much more to learn from Dean Baker.

One reason why Americans keep electing the right wing Republicans is because the media is dominated by fools with a glib and seductive writing style like David Brooks. I confess that I was seduced by his book Bobos in Paradise but I've since had the scales fall from my eyes. Brooks is a seductive writer much like William F. Buckley. It is easy to be seduced by those who dismiss the gritty reality and instead focus on grandiose generalities that blame the victim and put robber barons on pedestals.

Friday, January 13, 2012

How to be Successful by Being Consistently Wrong

Only the big industries can be consistently wrong and continue to be big and dominate their industry. Here is a post by Steve Blank on his blog that nails how the anti-Internet movie industry has made lots of money on technological innovation in the past and despite its current crusade against the Internet will most likely make a killing off the Internet:
This year the movie industry made $30 billion (1/3 in the U.S.) from box-office revenue.

But the total movie industry revenue was $87 billion. Where did the other $57 billion come from?

From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.

The Movie Industry and Technology Progress
The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.
  • 1920’s – the record business complained about radio. The argument was because radio is free, you can’t compete with free. No one was ever going to buy music again.

  • 1940’s – movie studios had to divest their distribution channel – they owned over 50% of the movie theaters in the U.S. “It’s all over,” complained the studios. In fact, the number of screens went from 17,000 in 1948 to 38,000 today.

  • 1950’s – broadcast television was free; the threat was cable television. Studios argued that their free TV content couldn’t compete with paid.

  • 1970’s – Video Cassette Recorders (VCR’s) were going to be the end of the movie business. The movie businesses and its lobbying arm MPAA fought it with “end of the world” hyperbole. The reality? After the VCR was introduced, studio revenues took off like a rocket. With a new channel of distribution, home movie rentals surpassed movie theater tickets.

  • 1998 – the MPAA got congress to pass the Digital Millennium Copyright Act (DMCA), making it illegal for you to make a digital copy of a DVD that you actually purchased.

  • 2000 – Digital Video Recorders (DVR) like TiVo allowing consumer to skip commercials was going to be the end of the TV business. DVR’s reignite interest in TV.

  • 2006 - broadcasters sued Cablevision (and lost) to prevent the launch of a cloud-based DVR to its customers.

  • Today it’s the Internet that’s going to put the studios out of business. Sound familiar?
Why was the movie industry consistently wrong? And why do they continue to fight new technology?
There is more. Go read the whole article.

What upsets me is that the luddites in the MPAA and RIAA and other big cartels are only too willing to destroy the Internet in their belief that it will make them more money. They are dead wrong. Worse, they are destroying one of the great advances of the past century all for a quick profit. Tragic.

Go read about SOPA. Follow up the leads that Steve Blank highlights in his article. This insane push to destroy the Internet needs to be stopped.

Thursday, January 12, 2012

Inside the Divided Brain

Here is an interesting lecture on brain asymmetry:

Tuesday, January 10, 2012

Funny

Here's the future. Beauty has been democratized!

One of Mitt Romney's Houses

He's got a $12 million house in California and all he wants to do is tear it down and build a bigger and fancier house!

Monday, January 9, 2012

From Cold Fusion to Widom-Larsen

Here is a bit from an excellent post by Steven Krivit in his excellent blog NewEnergyTimes. This reviews the history of investigations and thinking about the unexpected energy production by the Fleischmann–Pons experiment to the latest thinking centred on Widom-Larsen theory. Here is the history as understood by Krivit and presented at Mitre Corp (an R&D outfit for the US government):
The first phase is 1989-1993. The initial problem is that nuclear experts had never known of any kind of nuclear energy that did not produce commensurate levels of dangerous radioactive emissions. Few people at this time were aware of weak interactions, let alone the possibility that weak interactions could lead to high reaction rates. So, for most scientists, the claimed results were inexplicable according to what they knew at the time.

Nuclear physicists couldn't conceive of a way that deuterons could penetrate or overcome the Coulomb barrier at room temperature. Some people, like Hagelstein, tried to come up with explanations for this, but they all relied on imaginary physics.

From the experimental side, the field suffered early on from "experimenter's regress," which is explained by author Harry Collins: "When the normal criterion - successful outcome - is not available, scientists disagree about which experiments are competently done."

When the field emerged in 1989, there was a lot of initial opposition. Many people in science academia responded to it unprofessionally and with outright hostility. Some of these opponents lacked the courage to consider something so radically new and potentially disruptive; some lacked imagination. On a psychological level, it threatened their fundamental understanding of physics. On a practical level, it threatened their stature and funding. It threatened to make their textbooks and coursework obsolete. There were also some other opponents who were researchers who attempted to replicate the initial claim but failed and then may have felt embarrassed and frustrated and then became angry.

The second phase is 1993-2004. During this period, the field was largely neglected by mainstream science and mainstream media. To a great degree, although the researchers would certainly have liked to receive more financial support, I think they were happy to be left alone. However, significant misinformation which occurred from the onset of the field was never corrected in the broader public awareness [during this time]. But that started changing as of [the publication of] Charles Beaudette's Excess Heat & Why Cold Fusion Research Prevailed in 2000 and Steven B. Krivit and Nadine Winocur's The Rebirth of Cold Fusion in 2004. These books began to help correct some of the historical record.

The third phase starts in 2005, when Widom and Larsen came out with their theory, and has continued to the present. During this phase, the field has been experiencing bitter factionalism between two groups. One group is people who maintain their belief in "cold fusion" or, if not [in name], at least the idea of deuterons somehow overcoming the Coulomb barrier. Sometimes, they seem to have loyalty only to the name of "cold fusion." [Often, many of these proponents defend either the concept or the term "cold fusion," much like adherents to a religion defend their right to their beliefs.]

The other group of people, whom you don't hear much about, recognizes low-energy nuclear reactions as real, but they don't presume or assert that it’s a fusion mechanism.
Here is a presentation from SPAWR that gives a more technical view of developments in LENR:



Follow developments of LENR at Steven Krivits NewEnergyTimes blog.

Sunday, January 8, 2012

Crystal Balling America's Future

Blogger The Big Picture has a post that notes that five years ago the Wall Street Journal had an article by Robert Frank clearly identifying the brave new world of "plutonomy" that the US, UK, Canada, and Australia were entering.
Exactly 5 years ago today, the WSJ published this post (Plutonomics) about a rather fascinating study on wealth inequality.

It was written by of all folks, Citigroup global strategist Ajay Kapur. In 2005, Kapur’s research team “came up with the term ‘Plutonomy’ in 2005 to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.”

What are the basic characteristics of Plutonomies? According to Kapur:
1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.
Kapur also noted the impact massive income and wealth inequality had on other aspects of the economy: Savings rates, national debt level, spending patterns, reaction to high commodity prices, and more. All of these, he claimed are substantially affected by the ultra wealthy.

Note that this was from 5 years ago today — circa January 2007 was, ten months before the market peaked, 11 months before the Great Recession began, and 15 months before Bear Stearns, 21 months before Wall Street (AIG BAC C FNM LEH, etc.) collapsed, and about 55 months before Occupy Wall Street began.

Quite fascinating . . .
It is worth your time to go read the entire Robert Frank post in the WSJ. I haven't read his upcoming book The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust but I've got a hold on it at the library and expect to be entertained and appalled.

Here is a different Robert Frank, this is Robert H. Frank who teaches at Cornell University in a PBS Newshour interview with Paul Solman:



If you listen to 8:00 into the above video you find an interesting straddling of the middle. He argues from the right for the value of the free market and from the left for the importance of government in regulating the market and ensuring a fair playing field. (Funny, this isn't Darwinian. This is Adam Smith who has been misconstrued by the political right to be only the "invisible hand" guy when, in fact, he very much appreciated the role of government in helping to establish the possibility of a market.)

Don't confuse the Robert Frank who writes for the Wall Street Journal with the Cornell professor. Both have something interesting to say, but they are two different voices, but unfortunately with the same name.

As for America's future, it will succeed only if it gets off the destructive path that is creating a more and more unequal society and gets back to something more like the 1950s and 1960s when the middle class bloomed, America was prosperous, and the future looked unlimited. The future requires a more pragmatic politics that isn't dogmatic right or dogmatic left. It needs a politics that overthrows the idiocy of Reaganism and that overthrows the idiocy of a nanny state. The US needs a renewed robust middle, a real middle class, and a real political middle.

What Does 2012 Hold for Employment in the US?

Here is an excellent post by the Calculated Risk blog:
Question #5 for 2012: Employment

by CalculatedRisk

Earlier I posted some questions for next year: Ten Economic Questions for 2012. I'm trying to add some thoughts, and a few predictions for each question.

5) Employment: The U.S. economy added 1.64 million total non-farm jobs or just 137 thousand per month in 2011. There were 1.92 million private sector jobs added in 2011, or about 160 thousand per month. Although this was an improvement from 2010, this was still weak payroll growth for a recovery. How many payroll jobs will be added in 2012?

First a little "good" news. It appears that most of the state and local government job cuts will be over by mid year 2012. Just eliminating the employment drag from these job cuts will help.

from: Calculated Risk
Click to Enlarge

Here is a graph of the annual change in government payrolls since 1970. Over the last 3 year government employment has decreased significantly (this is a combination of Federal, State and local government). It appears job cuts will slow in the first half of 2012, and government employment might be neutral in the 2nd half of this year.

For 2011, the BLS reported 280 thousand government jobs lost, and my guess is this will slow to around 100 thousand in 2012 and most of the jobs lost will be in the first half of the year.

As predicted a year ago, construction employment increased in 2011. Although the increase was small - just 46 thousand jobs - this was the first increase for construction employment since 2006, and the first increase for residential construction employment since 2005.

I expect construction employment to increase at a faster rate in 2012 - not a boom - but better than in 2011. Unfortunately employment growth will probably slow in some other sectors. As an example, although auto sales will probably continue to increase in 2012, the rate of increase will slow since most of the recovery in auto sales has already happened. This suggests that private job creation will probably be about the same in 2012 as in 2011, even with some pickup in construction.

Private Payroll JobsHere is a graph of the annual change in private payrolls since 1970.

From: Calculated Risk
Click to Enlarge

Last year was disappointing given the high level of unemployment, but it was still the 2nd best year for private job creation since the 1990s.

My guess is private employment will increase around 150 to 200 thousand per month on average in 2012; about the same rate as in 2011.

With over 13 million unemployed workers - and 5.6 million unemployed for more than 26 weeks - adding 2 million private sector jobs will not seem like much of job recovery for many Americans. Hopefully I'm too pessimistic.
One of the tragedies of the "too small to succeed" stimulus of 2009 was that it didn't include enough money covering a long enough period to prevent the massive firing of state and local public workers including teachers, police, firement, etc. The Republicans have been intransigent on stimulating the economy because for them "job #1" was hurting the economy to prevent Obama being re-elected. They weren't interested in helping the 99% who are suffering from the greatest unemployment since the Great Depression or the ten million homes that were repossessed by the banks throwing people out onto the street. Their only concern is to make sure that the top 0.01% continue to make the multi-million incomes and hold on to the hundreds of millions and billions in wealth.

The only economic stimulus the Republicans believe in is the trickle down effect of activites such as the new boom in super-sized yachts. The only "jobs" that the ultra-rich want to hand on to are those personal service jobs where people "service" the rich for meagre wages while all the good wages, the middle class wages, disappear in the "new economy" that trickle down Reaganism has delivered over the last 30 years.

An Honest Assessment of the US's Federal Reserve

From a post at the Eschaton blog:
If this really is the Fed's view, then they're saying that monetary policy is generally going to be utterly useless in fighting recessions as they won't be willing to do anything. Time to rewrite all the textbooks. As in, instead of the usual "fiscal policy is less likely to be useful during recessions due to lags in recognition, implementation, and impact" claptrap, we should have "monetary policy is unlikely to be useful during recessions due to the fact that modern central bankers are sociopaths whose only concerns are inflation and the economic wellbeing of the creditor class."
It is clear that all central banks are more concerned about the creditor class than the debtor class. The tragedy of the 2008 financial crisis is that central bankis have shown themselves more dedicated to ensuring the wealth of the rich than the economic well-being (jobs, houses, retirement, education, etc.) of the bottom 99%. Sad.

Saturday, January 7, 2012

A Canadian Solution to American Political Travails

Here is a reasonable proposition from a decent people to solve the insoluble problems of Americans in the upcoming elections...

The "Complexities" of American Law

With the full unveiling of the concept of corporations are "people" (as Mitt Romney happily repeats on the presidential nomination trail), the Citizens United case settled by the Supreme Court has demonstrated the wondefully "complex" nature of American law.

Here is a bit from a post by UC Berkeley economist Brad DeLong expatiating on the subtleties:
Justinian: How does this Fourteenth Amendment read?

Edward Coke: Like this:
Section. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens.... No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Section. 2. Representatives shall be apportioned... counting the whole number of persons in each State....
Justinian: So if you have more corporations in your state, you get more representatives in the legislature?

John of Salisbury: No, no, no! "Persons" in Section 2 refers only to human beings...

Edward Coke: And "persons" at the start of Section 1 refers only to human beings...

John of Salisbury: Only "persons" at the end of Section 1 refers to legal persons, i.e. corporations, as well as human beings...
If the US were consistent in its "law" then there would be a rush by the ultra-rich to incorporate all kinds of "companies", millions of companies, so that at the next election the ballot boxes could be happily stuffed with all kinds of votes from the corporate "persons" acting under the full weight of the law as laid down by the Fourteenth Amendment. If ever the poor organized themselves, it would simply require a renewed effort to incorporate some one "instant corporations" to help the "people" of America to keep the 99% in their place. Because... as the Supreme Court has affirmed, corporations are "people" too!

Thursday, January 5, 2012

The 1% Attack on Public Goods

Here is a bit from a post by Robert Reich on his blog:
America no longer values public goods as we did before.

The great expansion of public institutions in America began in the early years of 20th century when progressive reformers championed the idea that we all benefit from public goods. Excellent schools, roads, parks, playgrounds, and transit systems would knit the new industrial society together, create better citizens, and generate widespread prosperity. Education, for example, was less a personal investment than a public good — improving the entire community and ultimately the nation.

In subsequent decades — through the Great Depression, World War II, and the Cold War — this logic was expanded upon. Strong public institutions were seen as bulwarks against, in turn, mass poverty, fascism, and then communism. The public good was palpable: We were very much a society bound together by mutual needs and common threats. (It was no coincidence that the greatest extensions of higher education after World War II were the GI Bill and the National Defense Education Act, and the largest public works project in history called the National Defense Interstate Highway Act.)

But in a post-Cold War America distended by global capital, distorted by concentrated income and wealth, undermined by unlimited campaign donations, and rocked by a wave of new immigrants easily cast by demagogues as “them,” the notion of the public good has faded. Not even Democrats any longer use the phrase “the public good.” Public goods are now, at best, “public investments.” Public institutions have morphed into “public-private partnerships;” or, for Republicans, simply “vouchers.”

Mitt Romney’s speaks derisively of what he terms the Democrats’ “entitlement” society in contrast to his “opportunity” society. At least he still envisions a society. But he hasn’t explained how ordinary Americans will be able to take advantage of good opportunities without good public schools, affordable higher education, good roads, and adequate health care.

His “entitlements” are mostly a mirage anyway. Medicare is the only entitlement growing faster than the GDP but that’s because the costs of health care are growing faster than the economy, and any attempt to turn Medicare into a voucher — without either raising the voucher in tandem with those costs or somehow taming them — will just reduce the elderly’s access to health care. Social Security, for its part, hasn’t contributed to the budget deficit; it’s had surpluses for years.

Other safety nets are in tatters. Unemployment insurance reaches just 40 percent of the jobless these days (largely because eligibility requires having had a steady full-time job for a number of years rather than, as with most people, a string of jobs or part-time work).

What could Mitt be talking about? Outside of defense, domestic discretionary spending is down sharply as a percent of the economy. Add in declines in state and local spending, and total public spending on education, infrastructure, and basic research has dropped from 12 percent of GDP in the 1970s to less than 3 percent by 2011.

Only in one respect is Romney right. America has created a whopping entitlement for the biggest Wall Street banks and their top executives — who, unlike most of the rest of us, are no longer allowed to fail. They can also borrow from the Fed at almost no cost, then lend the money out at 3 to 6 percent.

All told, Wall Street’s entitlement is the biggest offered by the federal government, even though it doesn’t show up in the budget. And it’s not even a public good. It’s just private gain.

We’re losing public goods available to all, supported by the tax payments of all and especially the better off. In its place we have private goods available to the very rich, supported by the rest of us.
America is becoming a banana republic. As the public sphere melts away, little fiefdoms are left where private armies control access. The rich get "special treatment" and the masses are left to mob the gates and beg for a crust of bread. Sad.

Wednesday, January 4, 2012

Obama's Persecution of Whistleblowers

Here is a talk given by whistleblower Jesselyn Radack:



As Racack points out in the video, the chilling fact is that "supposed left-leaning" Obama has brought more charges against whistleblowers than all previous administrations combined. With "friends" like Obama, the political left has no need for enemies.

Psychopaths Are Among Us

Here is a bit from an excellent article by William D. Cohan in Bloomberg News:
Did Psychopaths Take Over Wall Street Asylum?: William D. Cohan

It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame.

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

As a result, Boddy argues in a recent issue of the Journal of Business Ethics, such people are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”

How do people with such obvious personality flaws make it to the top of seemingly successful corporations? Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”
Go read the whole article because the reporter includes a great deal more detail about Brody's thesis.

I found the book Snakes in Suits: When Psychopaths Go to Work to be useful in exposing this problem with modern corporations. This book has Robert D. Hare as co-author. It is Hare who developed the Psychopath Check List - Revised (PCL-R) which is the standard instrument for identifying psychopaths.

Bottom line is that these monsters create havoc and ruin many, many lives:
Then, according to Boddy’s “Corporate Psychopaths Theory of the Global Financial Crisis,” these men were “able to influence the moral climate of the whole organization” to wield “considerable power.”

They “largely caused the crisis” because their “single- minded pursuit of their own self-enrichment and self- aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

Boddy doesn’t name names, but the type of personality he describes is recognizable to all from the financial crisis.

He says the unnamed “they” seem “to be unaffected” by the corporate collapses they cause. These psychopaths “present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings and investments, and as lacking any regrets about what they have done. They cheerfully lie about their involvement in events, are very convincing in blaming others for what has happened and have no doubts about their own worth and value. They are happy to walk away from the economic disaster that they have managed to bring about, with huge payoffs and with new roles advising governments how to prevent such economic disasters.”
And if you need more scare put into you. Here is a bit from an article in The Los Angeles Times by Andrew Malcolm:
Using his law enforcement experience and data drawn from the FBI's behavioral analysis unit, Jim Kouri has collected a series of personality traits common to a couple of professions.

Kouri, who's a vice president of the National Assn. of Chiefs of Police, has assembled traits such as superficial charm, an exaggerated sense of self-worth, glibness, lying, lack of remorse and manipulation of others.

These traits, Kouri points out in his analysis, are common to psychopathic serial killers.

But -- and here's the part that may spark some controversy and defensive discussion -- these traits are also common to American politicians. (Maybe you already suspected.)

Yup. Violent homicide aside, our elected officials often show many of the exact same character traits as criminal nut-jobs, who run from police but not for office.

Kouri notes that these criminals are psychologically capable of committing their dirty deeds free of any concern for social, moral or legal consequences and with absolutely no remorse.

"This allCapitol Hill Domeows them to do what they want, whenever they want," he wrote. "Ironically, these same traits exist in men and women who are drawn to high-profile and powerful positions in society including political officeholders."

Good grief! And we not only voted for these people, we're paying their salaries and entrusting them to spend our national treasure in wise ways.

2011 as a Turning Point

Here is a bit from an interesting article by Rick Salutin in The Toronto Star:
Time magazine named The Protester its 2011 “Person of the Year” because, for decades till recently, most protests “seemed ineffectual and irrelevant.” That’s just silly. You can always find resistance and, depending on how you judge, it’s often relevant. ...

What may have been unique this past year was something else: a collapse of the conventional fountains of authority and respect. In the Arab world that meant governments. But in the West, it meant big business and finance. The brilliance of Occupy Wall Street was that it didn’t go to Washington. The Tea Party did; it directed its rage toward politicians and so it was eclipsed by the Occupiers, who targetted the bankers and financiers who control governments. That clearly resonated, but it wouldn’t have, 20 or 30 years ago.

Think back to the torrent of bestselling business bios and takeover epics like Iacocca or Barbarians at the Gate that began around 1980. Business was the hero; government was the “problem” because it impeded business’s freedom (even if business icons like Lee Iacocca demanded and relied on public money). Pro-business think-tanks proliferated; they disgorged “educational” series, often on public TV, by advocates like Milton Friedman. This accelerated through the Clinton-Bush years and beyond. Disdain for the ├╝ber-rich was unthinkable until —

It wasn’t the crash of 2008 that led to their fall from grace, nor exposure of the greed and stupidity that required a massive public rescue. It was their graceless reaction to the bailouts: no apologies, remorse or gratitude — even faked; just more arrogance, bonuses, takeovers, foreclosures. Wall Street begged to be occupied. The Unrepentant Financier could have been Time’s Person.

...

Whose authority has also declined? How about Time magazine? The newsmag style used to sound authoritative and serenely confident. Now it sounds inane. “Everywhere, it seems, people said they’d had enough. . . . They dissented; they demanded —” Everywhere? Like out my window right now? And “it seems”? Seems to who(m)? Who makes these claims? What voice would you need to actually say words so pompous and vacuous? You can see Jon Stewart (if he did print) wincing as he reads it. Where did that invincible authority go?

The power of authority diminishes when you can hear credible, contesting voices. Print tends to be monotonal and univocal, unlike the oral tradition that preceded it. But the Internet, though it often lacks actual speech, is oral in the sense of interactive, like a Socratic dialogue. In oral mode, less is often more because speech is so laden with gesture, tone etc.; even something as short as a tweet can suffice. That too diminishes normal authority, which likes to rumble on.
Go read the whole article. It is very thought-provoking.

I personally like the analysis that says that our culture is moving from hierarchy where the "experts" dictate to a collective where everybody's voice gets a chance to contend for attention and authority. I understand the need for an organizing principle to reduce the cacophony, but I'm also aware that elitism tends to suffocate the voice of the dissenter and prevents the rise of the new. We need diversity. Life is a race and we need change and innovation to help us to get from here with all its problems to there with its promise of a better future.

Tuesday, January 3, 2012

Politics in the "Land of the Free (to be Bought & Sold)"

America loves to thump its chest about its "democracy". But the facts say something else. Here is a bit from an article by Matt Taibbi in Rolling Stone magazine:
But the ugly reality, as Dylan Ratigan continually points out, is that the candidate who raises the most money wins an astonishing 94% of the time in America.

That damning statistic just confirms what everyone who spends any time on the campaign trail knows, which is that the presidential race is not at all about ideas, but entirely about raising money.

The auctioned election process is designed to reduce the field to two candidates who will each receive hundreds of millions of dollars apiece from the same pool of donors. Just take a look at the lists of top donors for Obama and McCain from the last election in 2008.

Obama’s top 20 list included:

Goldman Sachs ($1,013,091)
JPMorgan Chase & Co ($808,799)
Citigroup Inc ($736,771)
WilmerHale LLP ($550,668)
Skadden, Arps et al ($543,539)
UBS AG ($532,674), and...
Morgan Stanley ($512,232).

McCain’s list, meanwhile, included (drum roll please):

JPMorgan Chase & Co ($343,505)
Citigroup Inc ($338,202)
Morgan Stanley ($271,902)
Goldman Sachs ($240,295)
UBS AG ($187,493)
Gibson, Dunn & Crutcher ($160,346)
Greenberg Traurig LLP ($147,437), and...
Lehman Brothers ($126,557).

Obama’s list included all the major banks and bailout recipients, plus a smattering of high-dollar defense lawyers from firms like WilmerHale and Skadden Arps who make their money representing those same banks. McCain’s list included exactly the same banks and a similar list of law firms, the minor difference being that it was Gibson Dunn instead of WilmerHale, etc.

The numbers show remarkable consistency, as Chase, Morgan Stanley, and Citigroup all gave roughly twice or just over twice as much to Obama as they did to McCain, almost perfectly matching the overall donations profile for both candidates: overall, Obama raised just over twice as much ($730 million) as McCain did ($333 million).

Those numbers tell us that both parties rely upon the same core of major donors among the top law firms, the Wall Street companies, and business leaders – basically, the 1%. Those one-percenters always give generously to both parties and both presidential candidates, although they sometimes will hedge their bets significantly when they think one side or the other has a lopsided chance at victory. That’s clearly what happened in 2008, when Wall Street correctly called Obama as a 2-1 (or maybe a 7-3) favorite to beat McCain.

The 1% donors are remarkably tolerant. They’ll give to just about anyone who polls well, provided they fall within certain parameters. What they won’t do is give to anyone who is even a remote threat to make significant structural changes, i.e. a Dennis Kucinich, an Elizabeth Warren, or a Ron Paul (hell will freeze over before Wall Street gives heavily to a candidate in favor of abolishing their piggy bank, the Fed). So basically what that means is that voters are free to choose anyone they want, provided it isn’t Dennis Kucinich, or Ron Paul, or some other such unacceptable personage.
Go read the original to get the whole story and the links to follow up.

When will the American public wake up to the charade that passes for "democracy" where the rich have bought and sold the whole process and only let the "little people" play bit roles before they are shuffled aside to let the big boys milk the system for what they want.

The whole process is so predictable that Taibbi can already read the presidential election results ten months before the election is held:
Most likely, it’ll be Mitt Romney versus Barack Obama, meaning the voters’ choices in the midst of a massive global economic crisis brought on in large part by corruption in the financial services industry will be a private equity parasite who has been a lifelong champion of the Gordon Gekko Greed-is-Good ethos (Romney), versus a paper progressive who in 2008 took, by himself, more money from Wall Street than any two previous presidential candidates, and in the four years since has showered Wall Street with bailouts while failing to push even one successful corruption prosecution (Obama).
When the "voice of the people" can be ignored because the rich have already bought the result, that isn't "democracy". That is plutocracy.

The Story of America

The great middle class society known as "America" is dead. Dead as a dodo. Buried by the "greed is good" 1980s and the glorification of "me first" family values of the political right over the last few decades.

Here is a nice summary by Bob Lefsetz in his blog The Lefsetz Letter:
What Happened To My Country?

My father was a real estate appraiser.

He started out as an engineer, but that lasted less than a year, he wasn’t an ass-kisser, he couldn’t play the game, he was bounced out.

So he opened a liquor store and tried his hand at commercial real estate. Unsuccessfully, because he didn’t have enough money to purchase property.

Trying to improve his lot in life, he relocated the package store next to an exit by the newly-finished I-95, otherwise known as the Connecticut Turnpike. And when redevelopment hit Bridgeport, his friend Maury Magilnick said no one knew as much about local real estate as my dad, and if he became an appraiser, he’d hire him.

My father spent a week at UConn. Another at the University of Chicago. He got licensed. And with his engineering background and his natural acumen he became a legend in the state, Attorneys General feared him, and my dad garnered the income of a doctor or a lawyer, he sent three children to private universities and graduate schools.

That dream is dead today.

I’m in Vail, Colorado. My family started skiing when I was ten. Used to be an egalitarian sport, you saw Beetles in the parking lot, sandwiches were de rigueur in the base lodge, brought from home. Skiers were not the upper crust, they were us.

No more.

So I’m riding up the lift with a fourth year medical student. I ask him what he’s gonna be.

"An anesthesiologist."

Why? Because he loves it? No, because he can make good bread and vacation and live the high life.

I’d like to tell you I met some musicians on the lift, some regular people, but I kid you not when I tell you the only people I met were in finance. Oh, and there was one dentist.

They traded for the family account. They were "consultants". They worked for hedge funds. They had their own private ski instructors, at $700 a day. They were the 1%.

And everybody in America is scrambling to get into the club.

That’s what’s wrong with the music business. The executives want to be as rich as the bankers, they too want to fly in private jets and tip with hundred dollar bills. What is the right tip these days? For a ride through town? I’m thinking $20, because the bankers have driven up the rate and the employees expect it and they’re struggling to make ends meet.

I grew up in the sixties. We were all in it together. Sure, my dad told me to be a lawyer, so he didn’t have to worry about me, but instead of taking the LSAT, I went to Montreal. There were no corporate recruiters on campus. Life was about personal fulfillment.

But now life is about money.

Either you’ve got it or you’re struggling to get it.

That wannabe anesthesiologist? He’s a Republican. He doesn’t want socialized medicine and he doesn’t want taxes.

Nobody wants taxes. Everybody thinks life is a personal struggle, that there’s no common infrastructure, no freeways, no police department, no power utility.

What’s mine is mine.

And if you don’t watch out, I’m gonna take yours.

No wonder musicians sell out to the Fortune 500. They too want to be rich. But the joke is upon them, they can never be that rich, the corporations laugh at them, they’re pawns in their game.

We live in a completely duplicitous country where no one’s honest, no one does what he believes in, everybody’s just motivated by the money.

And the problem?

PUBLIC EMPLOYEES!

Those teachers ruined the economy. Hell, you can barely make it on a teacher’s salary, you can’t vacation in Vail, Colorado, you’re closed out.

And somehow we accept all this. We shrug our shoulders and say it’s the way it is and will always be.

Why?

I feel like I’ve been asleep for thirty-odd years. While I was pursuing my dream, everybody else was pursuing the dollar. Reagan made greed legitimate and the baby boomers filled that hole and now their kids want more of the same. They just want to play on their hand-helds and feed at the trough. No one wants to innovate, they just want to get rich.

Ever speak to someone in finance? It’s a rare bird who likes it.

They do it for the money.

And with this money they buy up those concert tickets so you can’t get a good seat. They’ve got a shortage of time. When they get to the amusement park, they want to close you out. Get concierge treatment, cut the line…and you think this is okay because you think you’re gonna be rich too.

Ain’t that a laugh.

At least at Middlebury I saw what rich was.

Most people can’t afford a private college education any longer. 50k a year? Hell, public education keeps going up and up. Most people never even get into the game they think they’re gonna win.

There’s a ruling class, pulling the strings, and you’re not a member.

This is not a Democratic or Republican issue. This is a money issue. Money’s corrupted the system. You’ve got to be on the take to get elected. So you’re beholden to the corporations, not the people.

But you’ve read Steve Jobs’s biography and you think you’re gonna make it.

Don’t you get it? The odds of music success are infinitesimal, all the things you want most musicians haven’t got, a house, a spouse, kids, health insurance…

Don’t be angry with me.

And don’t be angry with the music business titans, keeping you out. They’re just worrying about themselves, they don’t care about you, they just want to live in a gated community and vacation where you aren’t.

They’re revolting in Russia. And they overthrew the government in a bunch of Middle Eastern countries. And if you don’t think it can happen here, you’re nuts.

Everybody thinks just because people have flat screens, they’re happy. But have you been following the shenanigans in cable? You’re paying for all this stuff you don’t watch just to keep rich people rich.

Music is a game for the poor. A place where the uneducated with no status can get a bit of notoriety and money. And as long as someone makes it, no one pays attention to the real problem.

The game is rigged.

You’re gonna be left behind unless you start making yourself number one and doing what’s expedient to get ahead.

What kind of country is that?

Not one I want to live in.

P.S. That great middle class of yore? It created the classic rock you’re still listening today. Music was a reasonable pursuit, rock stars were as rich as anybody in America. That framework expired decades ago, rock stars are no longer rich. There are bankers who make $20 million a year every year! So the Grace Slicks of today, people born with a silver spoon in their mouths, don’t go into the arts, it just doesn’t pay. Tom Rush was a Harvard graduate. He revolutionized the folk circuit, he pioneered the singer-songwriter game. Now we’ve just got poor people rapping about Benzes and boats. How fulfilling is that? I get it, they want in. But you used to follow your dreams, not the dollar. But now if you ain’t got the moolah, you’re gonna have a heart attack and no health insurance and you’re gonna be bankrupted. Hell, the dirty little secret is one health episode puts many people in bankruptcy even when they have insurance! But we’ve got to have less corporate regulation and as far as health insurance goes…you’re on your own. Don’t you see, health insurance is a metaphor for our entire country! Can you imagine someone writing "Get Together" today? Come on people now, smile on your brother, everybody get together and love one another right now… Who sings about that? Chumps.
The Occupy movement is trying to raise the dead, get the 99.99% to rise up against the rapacious 0.01% who have bought the politicians and dictate the rules that has put America on a path careening downwards towards doom.

Europe as the Apocalypse

Here is a doom-and-gloom view of the world from the Wall Street Journal. They look at the problems in Europe and spin a tale of imminent calamity for the whole world. I, however, see the WSJ as a Cassandra:



The WSJ is like those prophets in mid 1940 wrote off England and proclaimed the end of the world as we know it and the start of a new age of barbarism. On the other hand, I believe in "muddle through". The Brits muddled, Hitler over-reached in Russia, and finally America joined the fray and the world managed to find a way to avoid the obvious bleak tragedy that all the experts foretold.

Monday, January 2, 2012

Excusing Rogue Cops

Here is a nice post on The Agitator blog citing a new low in police "professionalism" in the US:
Maybe there’s a legitimate law enforcement reason to strip a man naked, strap him to a chair, tie a “spit hood” around his mouth, put a hood over his head (see video at the link), and douse him with pepper spray until he dies. That’s what sheriff’s deputies in Lee County, Florida did to 62-year-old Nick Christie two-and-a-half years ago.


I certainly can’t think of any such legitimate reason. But Lee County State’s Attorney Stephen Russell apparently can. Because he cleared the deputies involved of any wrongdoing.

Christie’s family just filed a lawsuit.
The cop's crime is obvious. But the more insidious crime is the State Attorney who looked but could find no "crime" in this brutal case.

Intro to Global Warming

Here is a nice hour video that explains the ins and outs of "global warming". It is by Warren Meyer who runs climate-skeptic.com:



I like the point he makes at 28:00 into this video: In twenty years environmentalists and conservationists are going to look back on this era of "global warming" and see it as a period when that single issue "sucked the air" out of the movement. Put simply, the fanatics have seized one issue and are driving the "green movement" over a cliff with an issue which they over-hyped and which won't pan out. This will undermine legitimate environmental and conservation issues that could have profited from the energy and attention which was stolen by the "global warming" crowd.

Canadian Senate Hearing on Global Warming

Here is testimony by Ross McKitrick on global warming. You should skip to 4:40 in the video to get to the start of his testimony and it ends by 16:00. This is well worth watching:



The various presenters:
  • Ross McKitrick, Department of Economics, University of Guelph

  • Ian Clark, Department of Earth Science, University of Ottawa

  • Jan Veizer, Department of Earth Science, University of Ottawa

  • Timothy Patterson, Department of Earth Sciences, Carleton University
I find it amusing to see respected senior scientists in Canada giving testimony that the IPCC story of "global warming" is incomplete, misleading, and wrong. Unlike the fanatics who claim "the science is settled", these researchers make it very clear that the science is still very much open to debate and in need of serious research.

In the video at 1:24:00 a senator has laid out the extreme cases and asks the panel "what to do". Ross McKitrick very intelligently replies that under those extremes it is very hard to know what to do. But he does a very clever thing, an economic trick, to force everybody to pay attention to climate and do the right thing:
He proposes a carbon tax that will be moved up or down based on real measurements. That forces corporations and institutions and people who deal with long term planning to build in expectations to their plans. This is the "invisible hand" of economics being used to control people to do the right thing. It is very clever and it should be implemented everywhere.
I sure would like to see governments around the world adopt this kind of stabilizing, automatic economic guidance for "doing the right thing" with respect to climate change. The tax would go down if the data shows no temperature increase, and it would steeply go up if temperatures showed an alarming rate of rise. Perfect.

Misrepresenting Debt

Here is a bit from a NY Times op-ed by Paul Krugman that tries to explain why the political right's obsession with deficits and debt is wrong-headed:
Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

But isn’t this time different? Not as much as you think.

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

Now, the fact that federal debt isn’t at all like a mortgage on America’s future doesn’t mean that the debt is harmless. Taxes must be levied to pay the interest, and you don’t have to be a right-wing ideologue to concede that taxes impose some cost on the economy, if nothing else by causing a diversion of resources away from productive activities into tax avoidance and evasion. But these costs are a lot less dramatic than the analogy with an overindebted family might suggest.

And that’s why nations with stable, responsible governments — that is, governments that are willing to impose modestly higher taxes when the situation warrants it — have historically been able to live with much higher levels of debt than today’s conventional wisdom would lead you to believe. Britain, in particular, has had debt exceeding 100 percent of G.D.P. for 81 of the last 170 years. When Keynes was writing about the need to spend your way out of a depression, Britain was deeper in debt than any advanced nation today, with the exception of Japan.

Of course, America, with its rabidly antitax conservative movement, may not have a government that is responsible in this sense. But in that case the fault lies not in our debt, but in ourselves.

So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.
It is utterly amazing how many times Krugman has made this point and those on the political right simply ignore him and continue with their lies and deceits. The media never call the Republicans to task for their lies. The poor people of America live in an intellectual ghetto because powerful forces conspire to treat them like mushrooms: keep them in the dark and feed them shit.