The Nice Side of No More Mr Nice Blog

I thought this was nicely put by the blog "No More Mister Nice Blog"...

SO WHY HASN'T OBAMA ORDERED THE FBI TO STAND DOWN?

The FBI has apparently disrupted a terror plot centered on Najibullah Zazi of Colorado; it conducted a sting operation that led to the arrest yesterday of a man charged with attempting to blow up a Dallas skyscraper; and it conducted another sting that led to the arrest of a Muslim convert (and apparent admirer of John Walker Lindh) in Illinois who allegedly tried to detonate what he believed was a bomb outside a federal courthouse.

Odd that this is all happening while we supposedly have a president who loves our enemies and hates America.

No, really -- why didn't B. Hussein Osama, pinko commie and bestest friend of domestic terrorists, order the FBI to stop pursuing these cases? Wouldn't that just follow logically? For a man dedicated to the destruction of America, wouldn't allowing the pursuit of these cases fly in the face of everything he holds dear?

Isn't it high time we demanded an explanation of this apparent contradiction from those who literally believe Obama is a treasonous America-hater? I don't just mean teabaggers or Beck or Limbaugh -- I mean "respectable" people like barking lunatic Michael Ledeen ("I think that [Obama] rather likes tyrants and dislikes America").

But I suppose that, for them, all that treason talk is like the verbal nastiness in sexual sadomasochism -- we're supposed to just know that they don't really mean it and it's all posturing and playacting; surely there's a "safe word" that can be uttered before someone takes it all too literally and decides Obama is a genuine menace to the Republic who's earned a bullet in the head. (See, e.g., John McCain, who gets a lot of credit for ultimately acknowledging Obama's patriotism on the campaign trail, even though he did so only after tolerating and encouraging the build-up of a hell of a lot of rage based on fantasies.) It's all theater; it's all sport. All fun and games -- until what?

I've been so sickened by mad dog Cheney running around saying "Obama has made the US less safe". This hopefully puts that to rest. You don't have to sign up for torture to be a "patriot". Cheney is a fool. He and Bush did more to make the US unsafe than the previous 40 administrations.

If you liked the above, try out this.

Click on the above headline to go to the original and follow up the links.

The Truth Comes Out Now, about 8 Years Too Late!

It is fun to read the kiss & tell books that reveal the "secrets" of a presidential administration. But I'm annoyed when an incompetent holds office for eight years and nothing comes out. But once he loses his grip on power, the truth comes out in all its shocking, horrifying detail. It is too late now. That stuff should have come out when it first came up in the Bush admin so that voters could have tossed the bum out early before he completed his full five acts of tragedy wherein he pretty well destroyed America...

Here's the right winger Bruce Bartlett reviewing the right winger Matt Latimer's book on Bush:

I am reading Matt Latimer's book, just out today, Speech-Less: Tales of a White House Survivor. Two things struck me. First is confirmation of the portrait of George W. Bush that I painted in my Impostor book of a bully who cannot stand to be contradicted, who thinks he knows everything despite being grossly ignorant most of the time, and who browbeats those beneath him into agreeing with him.
Second is how different the Bush White House was from the Reagan White House where I worked. Reagan's WH was a model of thoroughness, adherence to proper procedure, and respect for the office of the president. Bush's WH seems amazingly slipshod, showing total disregard for all of the things that were important to Reagan in terms of how his administration functioned.
On the first point, I was struck by this paragraph as the author discusses his first session with Bush reviewing a draft speech he had written:
"The president's editing sessions went like this: he talked, you listened and scribbled furiously whatever he said. On occasion, he might ask a question. But usually he wasn't too interested in the answer. Sometimes in the middle of your explaining something, if he felt he wasn't getting what he wanted, he'd interrupt and say, 'Okay, here's what we need to do.' This wasn't a process that encouraged dialogue or pushback on an important point. This was George W. decisively telling you what he wanted to say, and you writing it down. Got it?"
The problem with such a bullying method is that the president isn't just some guy expressing a personal opinion when he speaks. If he were, then it would be perfectly appropriate for him to demand that his speechwriters wrote whatever he damn well told them to say. But the president of the United States speaks not just for himself, not just for his administration, but for the country as a whole. His words carry weight. Consequently, it is appalling to see him treating those words in such a cavalier manner.

...

I continue to believe that a great many of Bush's screw-ups, most especially on Iraq, resulted from his personal style, which eventually permeated throughout his entire administration. It disdained facts and analysis and glorified decisiveness and action. "Shoot first and ask questions later" could have been its motto.

Of course the true believers will poke their fingers in their ears and whistle Dixie rather than listen to reason. The political process in the US is broken. Starting with Goldwater and the hard turn to the right in the Republican party, things have been going downhill for nearly 50 years. The bus is over the cliff and careening off the cliff wall, but it hasn't hit bottom yet. That is going to be one sad day when the next yahoo Republican takes power and finishes the job of destroying America.

Absolute Hypocrisy

John Yoo was the lawyer who argued for extraordinary powers of the President under a theory of the "unitary executive". In effect, Yoo denied the Constitution's division of powers into three branches by saying:

In its most extreme form, unitary executive theory can mean that neither Congress nor the federal courts can tell the President what to do or how to do it, particularly regarding national security matters.

(from Wikipedia. Note: the Wikipedia article does not quote Yoo directly, but it does reference Yoo, so you have to dig to get the specific words used by Yoo, but the above is completely in line with Yoo's allegiance to the idea of a 'unitary executive'.)

This is the same ideological right wing nut who argued that Clinton, as president, exceeded the powers available. Here's Yoo speaking out of the other side of his mouth:

But in The Rule of Law in the Wake of Clinton, a book published in 2000 by the libertarian Cato Institute, John Yoo took an entirely different view of "The Imperial Presidency Abroad," as his contribution was titled.

Yoo wrote: "President Clinton has exercised the powers of the imperial presidency to the upmost ... [and] undermine[d] notions of democratic accountability and respect for the rule of law ... ."

It's a provocative claim, especially coming from Yoo. How does he claim that Clinton did so? By using his powers as commander in chief to place American troops under the command of British NATO generals. "War power questions to one side, President Clinton's military adventures raise a second legal and constitutional difficulty—their unprecedented reliance on multilateral cooperation," Yoo writes. "That position has serious constitutional and policy defects .... [T]he Constitution nowhere permits the president ... to delegate federal power completely outside of the national government."

(from an article by Brad DeLong in The Week Magazine)

Here is the stark contrast between the rabid anti-Clinton Yoo and the sycophantic pro-Bush Yoo:

Yoo's Bush-era writings support presidential powers so wide-ranging that the president can order the torture of captives regardless of what treaties the U.S. has signed or what laws the U.S. Congress has passed. Yet we are expected to accept that Yoo previously believed that the president's power as commander in chief is so puny and circumscribed that he cannot lawfully put American troops under the command of allies?

DeLong goes on to show how ignorant Yoo is of history by pointing out:

Dwight D. Eisenhower—not the commander in chief but merely the theater commander—in December 1944 placed the U.S. First Army under the command of British Field Marshal Montgomery. President Wilson put the army of Gen. Pershing under the command of French Field Marshal Foch. Commander in chief George Washington put American troops under the command of Jean-Baptiste Donatien de Vimeur and Marie-Joseph Paul Yves Roch Gilbert du Motier. And let's not talk about the command authority over the Continental Army exercised by Friedrich Wilhelm Ludolf Gerhard Augustin von Steuben at Valley Forge.

Yoo is the ignoramus which the Stanford University UC Berkeley Law Faculty has "adorned" itself with. This is the guy that they dare not get rid of because it would affront "academic freedom". Nutty!

Go read the whole of DeLong's article. It is very enlightening!

Getting the Right Perspective

This is funny... I saw a reference to the following on the Brad DeLong site which pointed me off to another site. From there I tried to track down the original, and wonders of wonders, it was a Brad DeLong posting. So I tried to open that, but the original from 14 May 2003 is missing. A little more digging and I found it resurrected on 21 February 2008 on the DeLong website. Bizarre.

Here's the factoid that sent me chasing my tail:

The hideously depressing thing is that Cuba under Battista--Cuba in 1957--was a developed country. Cuba in 1957 had lower infant mortality than France, Belgium, West Germany, Israel, Japan, Austria, Italy, Spain, and Portugal. Cuba in 1957 had doctors and nurses: as many doctors and nurses per capita as the Netherlands, and more than Britain or Finland. Cuba in 1957 had as many vehicles per capita as Uruguay, Italy, or Portugal. Cuba in 1957 had 45 TVs per 1000 people--fifth highest in the world. Cuba today has fewer telephones per capita than it had TVs in 1957.

...

Thus I don't understand lefties who talk about the achievements of the Cuban Revolution: "...to have better health care, housing, education, and general social relations than virtually all other comparably developed countries." Yes, Cuba today has a GDP per capita level roughly that of--is "comparably developed"--Bolivia or Honduras or Zimbabwe, but given where Cuba was in 1957 we ought to be talking about how it is as developed as Italy or Spain.

My heart is on the left, but I learned in my youth that there are some truly evil people on the far left. Just like there are some truly evil people on the far right. And, indeed, there are some truly evil people who are apolitical. Life is full of pitfalls.

There are not Cliff Notes version where you can "check the facts". Sadly, people lie. Sadly their ideology blinds them to the fact that they lie. Sadly, we can only get at the truth by hard, lonely work. Being told that you are wrong doesn't mean you are wrong. Being told by your buddies that you are part of the enlightened few who really have truth by the tail does not mean that you are right. Life is complicated. It is struggle from your first breath to your last. And like Diogenes you can carry a lantern your whole life trying to find 'honest man' and never find one. That is the sad truth.

If you think I'm cynical, go read this. In particular, this bit:

Diogenes took Antisthenes' anti-worldliness to what is now foolishly considered an extreme, turning the latter's disregard for wealth and worldliness into complete rejection. He believed that virtue (the goal of most Greek philosophers but an irrelevance to consumer-societies) could be attained only by fighting hypocrisy, greed and corruption - i.e. conventional morality. He is famously said to have gone around Athens with a lantern by day, vainly looking for an honest man. He would have agreed with Khayyám that society is merely knots of people on puppet-strings of systems of belief.

The Next Bubble

Here is a key bit from an interesting article by Steven Pearlstein in the Washington Post. He points out that the Bush/Obama financial maneuvering is setting us up for another big bubble and crash:

Less encouraging is what's happening on Wall Street. It turns out that all those bold and necessary steps by the Federal Reserve to prevent the financial system from collapsing wound up creating so much liquidity that it has now spawned another financial bubble.

Let's start with the $1.45 trillion that the Fed has committed to propping up the mortgage market -- money that, for the most part, was simply printed. Effectively, most of that has been used to buy up bonds issued by Fannie Mae and Freddie Mac from investors, who turned around and used the proceeds to buy "safer" U.S. Treasury bonds. At the same time, the Fed used an additional $300 billion to buy Treasurys directly. With all that money pouring into the market, you begin to understand why it is that Treasury prices have risen and interest rates fallen, even at a time when the government is borrowing record amounts of new money.

As it was printing all that money, the Fed was also lowering the interest rate at which banks borrow from the Fed and each other, to pretty close to zero. What didn't change was the interest rate banks charged everyone else. As a result, "spreads" between what banks pay for money and what they charge are near record highs.

So who is borrowing? By and large, it's not households and businesses, which are reluctant to borrow during a recession. Rather, it's hedge funds and other investors, who have been using the money to buy stocks, corporate bonds and commodities, driving prices to levels unsupported by the business and economic fundamentals.

The excess liquidity is even being used to finance a new "carry trade" in which global investors borrow at U.S. rates and buy government bonds in places like Australia, where prevailing rates are higher. Because the carry trade involves exchanging dollars for foreign currencies, it has been a major contributor to the recent decline in the dollar.

Naturally, this has been a blessing for Wall Street's biggest banks, whose trading desks have not only made big money executing and financing the investment strategies of others, but have also been trading actively for their own accounts. And with bubble profits come bubble bonuses.

Back at the Fed, the attitude has been to welcome anything that strengthens the balance sheets of banks, particularly while they continue to write off billions of dollars in soured loans each quarter. Nor is the central bank in any rush to begin pulling back from its current policies. Citing the mistakes made by their predecessors during the Great Depression and by the Bank of Japan during the "lost decade" of the 1990s, Fed officials are determined not to snuff out the economic recovery by moving too early to raise interest rates and reduce liquidity.

But the lesson I prefer to focus on is the one from this decade, which is that central bankers ignore financial bubbles at their peril. Given the new architecture of global finance, the Fed can no longer think of its job solely in terms of the trade-off between inflation and unemployment. Nor should it become complacent about restrained consumer prices while ignoring rapidly rising prices for financial assets. As Alan Greenspan discovered, it is also a mistake for central bankers to assume that they can quickly sop up excess liquidity whenever they decide the moment is right.

Alan Blinder, the Princeton economist and former Fed vice chairman, may be right when he says it's too early for the Fed to begin raising interest rates. The economy is still too weak, he says, the threat of deflation still too real.

But it is certainly not too early for the Fed, at the conclusion of its meeting Wednesday, to warn Wall Street that its current policies cannot, and will not, continue indefinitely -- particularly if the money is used to inflate bubbles rather than finance real, sustainable economic growth.

I worry about inflation. It is a tax on everybody who lives within their means. The only people who benefit from inflation are those holding debt since they can replay loans with inflated dollars. Meanwhile, the government is fighting this current financial crisis using a hidden tax on everybody who holds financial assets. By keeping interest rates artificially low to allow banks to make profits to climb out of the hole they created for themselves, it taxes the rest of us by denying us the income from our savings that we deserve. Instead, we are being taxed both through federal spending and indirectly through the artificially low interest rates on our savings. All this is being done to make whole the malfactors who created this problem. They get no punishment. Instead they get rewards. While the average Joes, who had no responsibility, are paying both through taxes and through a hidden tax to put money into the pockets of the bankers who created the problem. This is evil.

It may be needed in the short term, but it should be openly acknowledged. (Where is all that "transparency" that Obama promised?) The government should make known what it is going to do to punish the evil doers and how quickly it can stop punishing the innocent with this two-handed tax grab.

Chopping Ralph Nader Down to Size

People love to put their "heros" on pedestals. But all "big men" have feet of clay. It's in the job description (as in, "power corrupts, absolute power corrupts absolutely").

Here's an excellent blog posting by Doug Henwood that points out Ralph Nader's feet of clay:

I’ve long been struck by Ralph Nader’s imperious view of politics—his preference for progressive change via litigation, not legislation, and a career (during which he accomplished many very good things, don’t get me wrong) capped by a few celebrity presidential campaigns in which he never made any effort to build a movement out of the crowds and publicity they generated. So now he’s out with a “novel” that apparently argues that a small posse of enlightened plutocrats will save us. Citizens’ groups aren’t up to the task, Ralph tells Amy Goodman. Only enlightened businesspeople, working from inside (with the assistance of a perky parrot), can.

...

So the problem isn’t private ownership and a competitive system driven by profit maximization—it’s simply scale (small good, big bad) and temperament (replace the evil bizpeople with the good ones). He seems to have no idea that competition and profit maximization make people, who may be perfectly warm and lovely in their private lives, do monstrous things. I once heard a very similar line from Ben “Ben & Jerry’s” Cohen, who couldn’t understand how CEOs could both go to church and be nice to their families and then go to work and exploit and pollute.

Of course, as Liza Featherstone pointed out long ago, when faced with a union organizing campaign in crunchy Vermont, B&J fought it as roughly as any thuggish Southern mill owner would. “It’s business, man!,” as Liza’s title explained. Oh, and Ralph did pretty much the same thing when faced with organizing campaigns in a couple of his own shops, Multinational Monitor and Public Citizen. He fired the troublemaking editor of MM, Tim Shorrock, and spread nasty rumors about him, which led Shorrock to this conclusion about Nader:

Ralph Nader may look like a democrat, smell like a populist, and sound like a socialist – but deep down he’s a frightened, petit bourgeois moralizer without a political compass, more concerned with his image than the movement he claims to lead: in short, an opportunist, a liberal hack. And a scab.

And now he’s fully out of the closet as an admirer of the nice sort of plutocrat.

I was never a fan of Ralph Nader. I liked the idea of going against the corporations for the evil they do. But there was alway a "holier than thou" aura around Ralph Nader that bothered me. I'm a down-in-the-dirt democrat. I accept that people are imperfect. I think we are all in this together. But Nader was always an elitist.

Doug Henwood is an interesting fellow. His writing are always worth reading.

Deconstructing a Faulty Paradigm

I'm only too happy to see the multiple efforts underway to tear down the myth of the "rational market" and of a all-knowing, calculating homo economicus.

Here's a bit from an article by Robert Shiller making this very point:

The widespread failure of economists to forecast the financial crisis that erupted last year has much to do with faulty models. This lack of sound models meant that economic policymakers and central bankers received no warning of what was to come.

As George Akerlof and I argue in our recent book Animal Spirits, the current financial crisis was driven by speculative bubbles in the housing market, the stock market, energy and other commodities markets. Bubbles are caused by feedback loops: rising speculative prices encourage optimism, which encourages more buying and hence further speculative price increases — until the crash comes.

You won’t find the word “bubble,” however, in most economics treatises or textbooks. Likewise, a search of working papers produced by central banks and economics departments in recent years yields few instances of “bubbles” even being mentioned. Indeed, the idea that bubbles exist has become so disreputable in much of the economics and finance profession that bringing them up in an economics seminar is like bringing up astrology to a group of astronomers.

The fundamental problem is that a generation of mainstream macroeconomic theorists has come to accept a theory that has an error at its very core — the axiom that people are fully rational. As the statistician Leonard “Jimmie” Savage showed in 1954, if people follow certain axioms of rationality, they must behave as if they knew all the probabilities and did all the appropriate calculations.

So economists assume that people do indeed use all publicly available information and know, or behave as if they know, the probabilities of all conceivable future events. They are not influenced by anything but the facts, and probabilities are taken as facts. They update these probabilities as soon as new information becomes available and so any change in their behavior must be attributable to their rational response to genuinely new information. If economic actors are always rational, then no bubbles — irrational market responses — are allowed.

Abundant psychological evidence, however, has now shown that people do not satisfy Savage’s axioms of rationality.

In fact, people almost never know the probabilities of future economic events. They live in a world where economic decisions are fundamentally ambiguous, because the future doesn’t seem to be a mere repetition of a quantifiable past. For many people, it seems that “this time is different.”

I'm happy with science trying to push back the borders of ignorance. But that needs to be built on foundations of solid science. The myths that drove economic theory for the last 30 years were laughable. But they were above reproach because so many bought into it. It is a sad commentary on the illusions of academics. They love their math more than they love the truth.

It should be noted that one of the most poignant criticisms of string theory in physics is that these scientists are more in love with their math than the truth. So this is a common ailment and not simply localized to economists.

John Emerson in his blog Trollblog goes into a frenzy while making the point that contemporary economics has a corrupted foundation:

Akerlof and Schiller ask, “Why did most of us utterly fail to foresee the current economic crisis?”, and their answer is that we failed to take animal spirits into account.

My own response is: “What do you mean ‘we’, white man?” Lots of us were uneasy about the twenty-year boom/crash cycle we found ourselves stuck in, but few of us are economists. Lots of people also tried to tell the economists that their models were dangerously unrealistic, but economists were securely protected by tenure and were being rewarded very well by the malefactors who controlled the economy, so why should they care what anyone else said? Economists are smarter than anyone know tons and tons of math, you know.

What are “animal spirits”? According to Keynes (A&S, p.3) animal spirits are the “spontaneous urges to action” of large numbers of people which have unpredictable effects on the greater economy, whereas for Akerlof and Schiller (p. 4) they are “the restless and inconsistent element in the economy”. Thus stated, “animal spirits”, whatever it is that causes the economy to behave erratically, might seem merely to be the active equivalent of the dormitive element in morphine — a big fudge-factor, and just a way of kicking the can over to the psychologists and saying “We didn’t do it! The Second Great Depression is your fault, not ours!” However, in fairness, it’s not quite as bad as that. Akerlof and Schiller do describe several of the factors interfering with economic rationality: variations in levels of confidence, considerations of fairness, bad faith, the money illusion, and the ways people understand their world by means of constructing and telling stories:

But the current crisis bears witness to the role of such changes in our thinking. It was caused precisely by our changing confidence, temptations, envy, resentment, and illusions — and especially by changing stories about the nature of the economy. [A&S, p. 4]

They seem to think of these factors primarily as impurities or contaminants which unfortunately have disrupted the otherwise perfect descriptive / prescriptive rational economy which economists discovered / created / imposed, rather than as evidence that the economic model they’ve been working with for fifty years is no damn good. Almost sixty years ago, in the “Introduction” to Positive Economics, Milton Friedman claimed philosophically that scientists can make shit up and get away with it. For decades this has been professional dogma, and economics grad students who have had trouble believing this have been weeded out. As one consequence of this, during the last several decades economists have been working with a risible notion of individual economic rationality which is neither empirical nor normative, and which was chosen purely because it makes mathematical modeling possible.

Emerson may be extreme, but there is going to have to be a lot of fundamental re-work done before economists can walk in the sunshine again. They have failed miserably. All that mountain of "research" and so little of it of any use in the real world. That's not science. The test of science is the powers it gives us over nature. As scientists, economists are a pathetic failure.