Peering into the Crystal Ball

I find the following very interesting. It reinforces what I learned from reading Dan Gardner's book Future Babble. And I was pleased to see that my favourite economist/political commentator Paul Krugman topped the list as "most accurate".

Here's the low-down on prognostication:

A Hamilton College class and their public policy professor analyzed the predicts of 26 pundits — including Sunday morning TV talkers — and used a scale of 1 to 5 to rate their accuracy. After Paul Krugman, the most accurate pundits were Maureen Dowd, former Pennsylvania Governor Ed Rendell, U.S. Senator Chuck Schumer (D-NY), and former House Speaker Nancy Pelosi. “The Bad” list includes Thomas Friedman, Clarence Page, and Bob Herbert.

Press release

Pundits predict no more accurately than a coin toss
Krugman tops, Cal Thomas bottom of accurate predictors, according to study at Hamilton College

CLINTON, N.Y. – Op-ed columnists and TV’s talking heads build followings by making bold, confident predictions about politics and the economy. But rarely are their predictions analyzed for accuracy.

Now, a class at Hamilton College led by public policy professor P. Gary Wyckoff has analyzed the predictions of 26 prognosticators between September 2007 and December 2008. Their findings? Anyone can make as accurate a prediction as most of them if just by flipping a coin.

Their research paper, “Are Talking Heads Blowing Hot Air? An Analysis of the Accuracy of Forecasts in the Political Media” will be presented via webcast on Monday, May 2, at 4:15 p.m., at www.hamilton.edu/pundit. The paper will also be available at that address at that time. Questions during the presentation can be posed via Twitter using #hcpundit.

The Hamilton students sampled the predictions of 26 individuals who wrote columns in major print media and who appeared on the three major Sunday news shows – Face the Nation, Meet the Press, and This Week – and evaluated the accuracy of 472 predictions made during the 16-month period. They used a scale of 1 to 5 (1 being “will not happen, 5 being “will absolutely happen”) to rate the accuracy of each, and then divided them into three categories: The Good, The Bad, and The Ugly.

Go read the whole article to get all the details. And, as a bonus, here is Paul Krugman's take on this glory and fame.

I've read most of Krugman's books and I've followed him on the NY Times since he got his column there. I remember going to the "unofficial" archive of Paul Krugman's writings and reading through most of the material. (Sadly that archive appears to have gone dead late in 2010 and is now offline.) All of Krugman's writing is superbly lucid and usually ends up teaching you something new. Krugman is a jewel. It is tragic that most of the powerful ignore him. His isn't the sociable schmoozing type and apparently that is a career killer if you want to have real political power or have the ear of those in power.

Christopher Hitchens on Osama bin Laden

From an article in Slate magazine:

In what people irritatingly call "iconic" terms, Bin Laden certainly had no rival. The strange, scrofulous quasi-nobility and bogus spirituality of his appearance was appallingly telegenic, and it will be highly interesting to see whether this charisma survives the alternative definition of revolution that has lately transfigured the Muslim world. The most tenaciously lasting impression of all, however, is that of his sheer irrationality. What had the man thought he was doing? Ten years ago, did he expect, let alone desire, to be in a walled compound in dear little Abbottabad?
Ten years ago, I remind you, he had a gigantic influence in one rogue and failed state—Afghanistan—and was exerting an increasing force over its Pakistani neighbor. Taliban and al-Qaida sympathizers were in senior positions in the Pakistani army and nuclear program and had not yet been detected as such. Huge financial subventions flowed his way, often through official channels, from Saudi Arabia and other gulf states. As well as running a nihilist international, he was the head of a giant and profitable network of banking and money-laundering. He could order heavy artillery wheeled up to destroy the Buddhist treasures of Afghanistan in broad daylight. A nexus of madrassas was spreading the word from Indonesia to London, just as a nexus of camps was schooling future murderers.
And he decided to gamble all these ripening strategic advantages in a single day. Then, not only did he run away from Afghanistan, leaving his deluded followers to be killed in very large numbers, but he chose to remain a furtive and shady figure, on whom the odds of a successful covert "hit," or bought-and-paid-for betrayal, were bound to lengthen every day.

It seems thinkable that he truly believed his own mad propaganda, often adumbrated on tapes and videos, especially after the American scuttle from Somalia. The West, he maintained, was rotten with corruption and run by cabals of Jews and homosexuals. It had no will to resist. It had become feminized and cowardly. One devastating psychological blow and the rest of the edifice would gradually follow the Twin Towers in a shower of dust. Well, he and his fellow psychopaths did succeed in killing thousands in North America and Western Europe, but in the past few years, their main military triumphs have been against such targets as Afghan schoolgirls, Shiite Muslim civilians, and defenseless synagogues in Tunisia and Turkey. Has there ever been a more contemptible leader from behind, or a commander who authorized more blanket death sentences on bystanders?

There is more, go read the whole article.

Hitchens makes it clear that US policy helped fund Osama bin Laden through the much more than $15 billion that was given to Pakistan from which a fair chunk then flowed into the al Qaeda network. The US really needs to rethink its relationship with Pakistan. That is a murderous state where you can't trust anybody. I still have the image of the assassination of Benazir Bhutto burned into my mind. And I know that destabilizing proliferation of nuclear technology by A. Q. Khan was tolerated and shouldn't have been. There is just too much intrigue and back-stabbing going on in Pakistan. That country should be isolated and put on a watch list for rogue states.

State of the US Economy

This headline is the best summary of the state of the US economy that I've seen...

McDonalds Hires 62,000, Turns Away Over 938,000 Applicants For Minimum Wage, Part-Time Jobs

This is what the US economy has been reduced to: McDonalds reports that as part of its employment event to hire 50,000 minimum wage, part-time (mostly) workers, subsequently raised to 62,000 it received a whopping 1 million applications, or a Tim Geithner jealousy inducing 6.2% hit rate (h/t X. Kurt. OSis). Alas, the US economy is now so pathetic that the bulk of the population will settle for anything. Literally anything. And the saddest part: over 938,000 applicants were turned away. Here's hoping to Burger King needs a few million janitors in the immediate future too. And yes, aside from reality, things in America are really recovering quite nicely.

There is been minimal job growth in the US and actual income taken home (ignoring the Wall Street billionaires) has been falling since 2008 as people get kicked out of good paying jobs and end up taking part time or minimum wage jobs. This is the "recovery" that is supposedly taking place in the US.

The Collapse and Failure of Modern "Economics"

Here is a bit from an article in Foreign Affairs magazine which is reprinted in the blog Crooked Timber. The article looks at how monetary and economic policy in Europe is failing as that continent falls under the sway of "austerity" and the incompetence of "modern" economics:

The EU is now drifting toward a thinly disguised version of the gold standard, which wreaked economic havoc in the 1920s and led to a toxic political fallout. Under that system, European states had fixed exchange rates. During economic crises, they refused to increase government spending because of a failure to either understand or care that monetary disturbances and shocks to demand could lead to joblessness. The result was generalized misery. Governments responded to economic crises by allowing unemployment to go up and cutting back wages, leaving workers to bear the pain of adjustment. As Golden Fetters, Barry Eichengreen’s classic history of the period, shows, the gold standard began to collapse when workers in Europe gained the power to vote out of office the parties that supported austerity.

...

This approach cannot be sustained for long. The EU has never had much popular legitimacy: many voters have gone along with it so far only out of the belief that their politicians knew best. Today, they are more suspicious. And if they come to think that further European integration is causing more economic hardship, their suspicion could harden into bitterness and perhaps even xenophobia. Ireland’s new finance minister, Michael Noonan, has told voters that the EU is a game rigged in Germany’s favor; editorials in major Irish newspapers warn of Germany’s return to racist imperialism. As economic shocks hit other EU countries, politicians in those states will also look for someone to blame.

If the EU is to survive, it will have to craft a solution to the eurozone crisis that is politically as well as economically sustainable. It will need to create long-term institutions that both minimize the risk of future economic crises and refrain from adopting politically unsustainable forms of austerity when crises do hit. They must offer the EU countries that are the worst hit a viable path to economic stability while reassuring Germany, the state currently driving economic debates within the union, that it will not be asked to bail out weaker states indefinitely.

...

Contrary to the beliefs of nearly all anti-Keynesians—and, regrettably, some Keynesians, too—Keynesianism demands more, not less, fiscal rectitude in normal times than does the orthodox theory of balanced budgets that underpins the EU. John Maynard Keynes argued that surpluses should be accumulated during good years so that they could be spent to stimulate demand during bad ones. This lesson was well understood during the golden age of Keynesian social democracy, after World War II, when, aided by moderate inflation, the governments of the countries in the Organization for Economic Cooperation and Development greatly reduced their ratios of public debt to GDP. This approach should not be confused with the opportunistic support for large budget deficits evident, for example, among advocates of supply-side economics. If anything, “hard” Keynesianism suggests that the problem with the macroeconomic rules governing the euro is not that they are too tough and too detailed but that they are not tough or detailed enough. States in the eurozone should not be allowed to run moderate budget deficits in boom years, the Keynesian argument goes; instead, they should be compelled to run budget surpluses. The surpluses could then be saved in rainy-day funds or used to pay down government debt or, if the country had reached a satisfactory debt-to-GDP ratio, spent as a fiscal stimulus in the event of a crisis. Unlike the kind of budget management advocated by the German government, this approach does not seek to eliminate or minimize governments’ leeway to conduct fiscal policy. It gives governments up-front the means to manage demand whenever they might need to.

The call for "hard Keynesianism" is the right call. It is the call that points out that the last 80 years of "economics" has been a disaster and a mistake built around lovely mathematics but an idiotic understanding of markets and humans.

I think it is funny. The call for "hard Keynesianism" is the call to go back to Joseph in Egypt in 1000 BC when during the 7 fat years the Pharaoh stored up surpluses from the land to feed the people during the 7 lean years. That "modern" economics doesn't understand this need to lean against the wind says volumes about the incompetence of "modern economics".

True Believers

Here is a big chunk of an article by John Hari in the UK's Independent newspaper:

Since the election of Barack Obama, the Republican Party has proved that one of its central intellectual arguments was right all along. It has long claimed that evolution is a myth believed in only by whiny liberals – and it turns out it was on to something. Every six months, the party venerates a new hero, and each time it is somebody further back on the evolutionary scale.

Sarah Palin told cheering rallies that her message to the world was: "We'll put a boot in your ass, it's the American way!" – but that wasn't enough. So the party found Michele Bachmann, who said darkly it was an "interesting coincidence" that swine flu only breaks out under Democratic presidents, claims the message of The Lion King is "I'm better at what I do because I'm gay", and argues "there isn't even one study that can be produced that shows carbon dioxide is a harmful gas."

That wasn't enough. I half-expected the next contender to be a lung-fish draped in the Stars and Stripes. But it wasn't anything so sophisticated. Enter stage (far) right Donald Trump, the bewigged billionaire who has filled America with phallic symbols and plastered his name across more surfaces than the average Central Asian dictator. CNN's polling suggests he is the most popular candidate among Republican voters. It's not hard to see why. Trump is every trend in Republican politics over the past 35 years taken to its logical conclusion. He is the Republican id, finally entirely unleashed from all restraint and all reality.

The first trend is towards naked imperialism. On Libya, he says: "I would go in and take the oil... I would take the oil and stop this baby stuff." On Iraq, he says: "We stay there, and we take the oil... In the old days, when you have a war and you win, that nation's yours." It is a view that the world is essentially America's property, inconveniently inhabited by foreigners squatting over oil-fields. Trump says America needs to "stop what's going on in the world. The world is just destroying our country. These other countries are sapping our strength." The US must have full spectrum dominance. In this respect, he is simply an honest George W Bush.

The second trend is towards dog-whistle prejudice – pitched just high enough for frightened white Republicans to hear it. Trump made it a central issue to suggest that Obama wasn't born in America (and therefore was occupying the White House illegally), even though this conspiracy theory had long since been proven to be as credible as the people who claim Paul McCartney was killed in 1969 and replaced with an imposter. Trump said nobody "ever comes forward" to say they knew Obama as a child in Hawaii. When lots of people pointed out they knew Obama as a child, Trump ridiculed the idea that they could remember that far back. Then he said he'd "heard" the birth certificate said Obama was Muslim. When it was released saying no such thing, Trump said: "I'm very proud of myself."

The Republican primary voters heard the message right: the black guy is foreign. He's not one of us. Trump answered these charges by saying: "I've always had a great relationship with the blacks."

The third trend is towards raw worship of wealth as an end in itself – and exempting them from all social responsibility. Trump is wealthy because his father left him a large business, and since then companies with his name on them have crashed into bankruptcy four times. In 1990, the Pulitzer Prize-winning journalist David Cay Johnston studied the Trump accounts and claimed that while Trump claimed to be worth $1.4bn, he actually owed $600m more than he owned and you and I were worth more than him. His current wealth is not known, but he claims he is worth more than $2.7bn.

Johnston says that in fact most of Trump's apparent fortune comes from "stiffing his creditors" and from government subsidies and favours for his projects – which followed large donations to the campaigns of both parties, sometimes in the very same contest. Trump denies these charges and presents himself as an entrepreneur "of genius".

Yet for the Republican Party, the accumulation of money is proof in itself of virtue, however it was acquired. The richest 1 per cent pay for the party's campaigns, and the party in turn serves their interests entirely. The most glaring example is that they have simply exempted many of the rich from taxes. Johnston studied four of Trump's recent tax returns, and found he legally paid no taxes in two of them. In America today, a janitor can pay more income tax than Donald Trump – and the Republicans regard that not as a source of shame, but of pride.

How are these tax exemptions for the super-rich paid for? Here's one example. The Republican budget that just passed through the Senate slashed funding to help premature babies to survive. The rich riot while the poor shrivel. Trump offers the ultimate symbol of this: he won't even shake hands with any ordinary Americans out on the stump, because "you catch all sorts of things" from them. Yes: the Republican front-runner is a billionaire who literally won't touch the poor or middle class.

The fourth trend is to insist that any fact inconvenient to your world view simply doesn't exist, or can be overcome by pure willpower. Soon, the US will have to extend its debt ceiling – the amount of money the government is allowed to borrow – or it will default on its debt. Virtually every economist in the world says this would cause another global economic crash. Trump snaps back: "What do economists know? Most of them aren't very smart." Confront the Republicans with any long-term social or economic problem, and they have one response: it would go away if only we insisted on our assumptions more aggressively.

There's a bit more in the original. Go read the whole article.

Funny. Outside the US the media is willing to be very clear how mean, deceiving, and illegitimate the Republican party and its ideology truly is. But within the US, the media defers to the Republicans and treats them as if they are serious politicians with a real policy for the country. Tragic.

How Bad is Bad?

If you want a picture instead of words to understand how bad the Great Recession is, then this graph from the Calculated Risk blog is the best clear and simple picture possible:

Click to Enlarge
The little dips are all the post-WWII recessions. The big dip at the bottom, the one that drags on for years and years and is so very, very deep is the 2008 Great Recession caused by Wall Street greed and three decades of right wing propaganda calling to "shrink government" and "deregulate, deregulate, deregulate". Mission accomplished. The lunatics took charge of the asylum and you got the Great Recession.

Sadly, the lunatics still haven't given back the keys. The same right wing nuts who help prepare the groundwork for this financial disaster are still selling the poisonous intellectual fare of "freshwater economics". It still has the upper hand when you look at the vicious austerity programs of the Republican dominated state legislatures and when you survey the outrageous Ryan "budget" which is more a political dictat than a budget plan which could be followed.

The Film "Rendition"

Here is the trailer for the film Rendition.

This is about the insane US policy of rendition started by Bush that grabbed some terrorist, maybe, but certainly grabbed a lot of innocent men and shipped them off to secret CIA prisons around the world for torture and passed them on to favoured Middle East regimes for more intensive torture.

From a 2007 article by the Voice of America:

Daniel Benjamin, of The Brookings Institution in Washington, D.C. says rendition harms U.S. credibility.

"The issues of rendition and torture have become intertwined in the public imagination in our nation and in the minds of our friends abroad," he said. "Abuses that have been committed in the name of the Global War on Terror trouble the conscience of those who care about America's reputation and those who have been proud of our nation's role as a champion of the rule of law."

Frederick Hitz of the Center for National Security Law at the University of Virginia, says rendition should be illegal.

"I view it much as I do the executive order prohibition on political assassination," he said. "We should not be in the business of coercive torturous interrogations, directly or indirectly."

Another witness, David Cole of Georgetown University's Law Center suggested that Congress should call for an independent investigation of the Bush administration's rendition policy.

This article mentions a real human being, the Canadian Maher Arar, who was snatched off a plane transiting through the US between Tunisia and Canada. After many years Maher Arar got public hearings in Canada to expose the RCMP and CSIS involvement in his mistreatment, he got an official apology from the government, and he got an cash settlement from the government. What he didn't get back was the lost years, the pain, and memories of the cruelties he underwent "by mistake".

Of course, the US refuses to this very day, to take responsibility for the wrongs it did. It refuses to acknowledge the facts. It refuses to pay any restitution. It refuses to give back the good name of these people it has so irreparably harmed. It refuses to give justice to its victims... just another cruel torture added to those already meted out by the government of the people of the United States.

The cruel joke of the heinous US policy is that an innocent person like Maher Arar continues to be harrassed and mistreated by the us as the Voice of America article makes clear:

Testifying by video link from Canada, because he remains barred from the United States, Arar condemned what he calls the immoral practice of rendition.

"Let me be clear, I am not a terrorist, I am not a member of al-Qaida or any other terrorist group," he said. "I am a father, a husband, and an engineer. I am also a victim of the immoral practice of rendition."

U.S. lawmakers offered Arar apologies and regrets, and voiced disappointment that the U.S. government has not done the same.

But "regrets" given informally are not justice. There has been no justice for Maher Arar or any of the other innocent victims of this cruel, inhumane, unjust, vicious, an illegal US policy started under Bush (and supposedly ended under Obama, but who knows, it may still continue but be more "efficiently" executed in the sense that any innocents are never seen or heard from again so any "mistakes" are never known).

The film Rendition gives the "Hollywood view" of this crime. It ends with the "good American official" who realizes that this one case was wrong and who rights end so that the poor guy can get home to his loving wife and kids. In the real world, some of these injustices end in judicial murder. Nobody gets to go home. The wife and kids are left in limbo never even knowing that a judicial crime was committed against them. In other cases, the unfortunate innocent does finally get home, but as a broken man who may not be a gibbering fool, but is psychologically devastated and will never get his previous life back. In the real world, the bureaucrats under Clinton, Bush, and Obama (sure Obama put an executive order out to stop the "torture" but I don't believe it has ended, I think they have simply gone into blacker "black ops" to make it hard for the world to find out). Americans don't realize that something like 2% of the federal budget goes into "secret" operations which are effectively beyond the control of the legislators and even the President. The US is a rogue state. I have no explicit "proof" of this other than that history has shown that the US has gone down this path of illegality for many, many decades.

Somebody who has a very dark view of this black ops & black budget side of the US is Catherine Austin Fitts who said the following in an interview:

What we do know is that under the laws of the Constitution, which say money cannot be spent unless it is appropriated. It is essentially a violation of the Constitution to do that, with one exception. And this is where the black budget comes up. There are provisions under the National Security Act of 1947 and the CIA Act of 1949 for military and military intelligence to crawl money from outside of different agencies’ budgets, and spend it on non-transparent purposes. That’s sometimes why it’s called the “black budget”.

And what I found out both as Assistant Secretary of Housing, and then what I found with my company … and with the group of honest guys kicked out of HUD, was you had an agency whose legal purpose and political purpose was to help finance the mortgage markets, whose mortgage insurance programs were increasingly caught up in financing black budget operations. And this is very much tied to what’s going on in the mortgage markets.

She's gone a little wacky from my viewpoint, but her concern about how much the US has gone rogue is a legitimate concern and is something that voters have no way of knowing because all of this is "secret" and can't and won't be told so voters have no way of knowing what "their government" is doing on their behalf.