The Real Political Bloodsport in America

Paul Krugman writes in his NY Times op-ed about the rage that big corporations have against Obama and his administration. This is "class war" but unlike the boogyman version where the lower classes rise up against the upper classes, this is the real deal: the ultra-rich versus a popular government seeking blood and to bring them down to replace them with lap dog Republicans:

Much reporting on opposition to the Obama administration portrays it as a sort of populist uprising. Yet the antics of the socialism-and-death-panels crowd are only part of the story of anti-Obamaism, and arguably the less important part. If you really want to know what’s going on, watch the corporations.

How can you do that? Follow the money — donations by corporate political action committees.

Look, for example, at the campaign contributions of commercial banks — traditionally Republican-leaning, but only mildly so. So far this year, according to The Washington Post, 63 percent of spending by banks’ corporate PACs has gone to Republicans, up from 53 percent last year. Securities and investment firms, traditionally Democratic-leaning, are now giving more money to Republicans. And oil and gas companies, always Republican-leaning, have gone all out, bestowing 76 percent of their largesse on the G.O.P.

These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine. What’s going on?

One answer is taxes — not so much on corporations themselves as on the people who run them. The Obama administration plans to raise tax rates on upper brackets back to Clinton-era levels. Furthermore, health reform will in part be paid for with surtaxes on high-income individuals. All this will amount to a significant financial hit to C.E.O.’s, investment bankers and other masters of the universe.

Now, don’t cry for these people: they’ll still be doing extremely well, and by and large they’ll be paying little more as a percentage of their income than they did in the 1990s. Yet the fact that the tax increases they’re facing are reasonable doesn’t stop them from being very, very angry.

There's much more. Go read the original article.

To give you a taste, here's how he ends this article:

So where does that leave the president and his party? Mr. Obama wanted to transcend partisanship. Instead, however, he finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”

And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared. It’s time for President Obama to find his inner F.D.R., and do the same.

Refugees and Immigration

I knew about the Perimeter Institute but I hadn't looked too deeply. But today I'm watching videos of Leonard Susskind lecture on physics and I noticed on his Wikipedia page that he is a member of the Perimeter Institute.

So I looked that up and discovered that this Institute was set up by a Greek refugee, Mike Lazaridis, fleeing from Turkish persecution. That refugee ended up being the CEO of RIM and gave $100 million to set up the Institute. That is a pretty big "investment" return to Canada for accepting this refugee.

But there is more... Lazaridis has given over $100 million to the University of Waterloo where he attended but dropped out. The University has returned the favour by granting him an honorary degree.

I'm always hard pressed to understand the anger that the US public has against refugees and immigrants. It is a streak that has run through the country from nearly the beginning. It is especially odd because the US has so obviously benefited from the immigrants that made the US a home.

When I worked in high-tech R&D we had staff from Europe, Israel, Iran, China, etc. The native Canadians were well in the minority on the staff. Canada has been influenced by the US and is making it harder to immigrate to this country. The guys we were hiring with PhDs had to pay $2000 to the Canadian government to get their paperwork done. This is a hurdle, but a small one, with a PhD diploma. But for the hardworking poor, it is an insurmountable hurder. This is a tragedy. As the Mike Lazaridis story makes clear, if you turn away immigrants, you are throwing away wealth creation.

The new immigration law in Arizona that targets Mexican illegals is a shame. It would have effectively kept people like the following from coming to the US:

Alfredo Quinones-Hinojosa is an example of an illegal immigrant who came to the US and has done wonderful things. Read this article in NPR:

The life of Alfredo Quinones-Hinojosa, a former illegal immigrant, may sound like a movie script, but it is no fiction.

Twenty years ago, he hopped a border fence from Mexico into the United States and became a migrant farmworker.

Today, he is a neurosurgeon and professor at Johns Hopkins University, and a researcher who is looking for a breakthrough in the treatment of brain cancer.

Hector de Jesus Ruiz is an example of an immigrant who was wildly successful:

Ruiz was born in the border town of Piedras Negras, Coahuila, Mexico. As a teenager, he walked across the Mexico – United States border every day to attend a high school in nearby Eagle Pass, Texas, from which he graduated as valedictorian just three years after beginning to learn English. Ruiz earned a B.S. and M.S. in electrical engineering from the University of Texas at Austin in 1968 and 1970 respectively and a Ph.D. from Rice University in 1973. In 2002 he was CEO of the chip maker AMD and in 2004 became Chairman of the Board.

The modern US reaction to this wealth of energy, talent, and enthusiasm surging across the border? Well, watch how John McCain is willing to welcome the wealth creation and hard work on offer...



The joke is that anti-immigrant laws only keep the hard-working value-creating immigrants out. Those criminals who seek to rape & pillage won't be stopped by a law.

In my mind, the right to vote is a fundamental right that allows people to control their government. But that right sometimes fails because fanatics take control. The last line of defense is "open borders". If people can vote with their feet, bad governments would fall. Think of how much richer the US would have been if those desperate Jews from Europe were accepted instead of boxed in and ultimately rounded up and killed by the Nazi killing machine. If people could have freely left Germany and freely immigrated to a better country, the Nazis would have ruled a rump state, impotent to carry out its plans for a "Thousand Year Reich".

As for those who think that opening borders would result in a rush on their borders and a collapse of their country, I don't think so. The vast majority of people would really prefer to stay near where they are born. The numbers who want to flee because of political repression or a madman like Mugabe destroying their local economy is not that great. These economic migrants are self-limiting. They come because they believe they can better their lives. They won't come if there are no jobs an no prospect of a job.

Justice Delayed is Justice Denied

The following video is from a story that has played on Canadian TV for several years as a documentary called "The Murdered Bride". I notice that MSNBC now carries an updated version under its Dateline documentaries as "Forbidden Love". Here is a teaser that introduces the story:



Warning:The above only is an introduction and not the whole hour long Dateline story. Here is the CBC version which is about three years older so it ends up with loose ends that the Dateline version ties up and settle. If the MSNBC teaser got your interest up, watch the CBC video and then keep an eye out for a repeat of the MSNBC Dateline documentary.

You can read the details on the MSNBC Dateline site here.

There is a site with a petition calling for justice, for the police to move against the uncle and mother who directed this "honour killing" and paid the killers $50,000 for it.

What bothers me is the fact that big money is behind this. I can understand why police and the judicial system could be bought off in India. What I can't understand is the fact that apparantly money has bought off the "justice system" in Canada. There is no other rational reason why the police here, after eight years, have not acted on the arrest warrants from India and the clear evidence of culpability. Years ago I wrote letters to my MLA (Member of the Legislative Assembly) and to the Minister of Justice urging them to push the police to act. I see that the "Justice for Jassi" site has 20,000 signees for the petition, but nothing has moved the police to act. I can only conclude that justice in Canada is bought and sold and that this family had the money to buy off the RCMP (Royal Canadian Mounted Police). I'm disgusted.

Models and Their Discontents

Here are some bits out of a posting about climate models by Roy W. Spencer on his blog:

The strongest piece of evidence the IPCC has for connecting anthropogenic greenhouse gas emissions to global warming (er, I mean climate change) is the computerized climate model. Over 20 climate models tracked by the IPCC now predict anywhere from moderate to dramatic levels of warming for our future in response to increasing levels of atmospheric carbon dioxide. In many peoples’ minds this constitutes some sort of “proof” that global warming is manmade.

Yet, if we stick to science rather than hyperbole, we might remember that science cannot “prove” a hypothesis….but sometimes it can disprove one. The advancement of scientific knowledge comes through new hypotheses for how things work which replace old hypotheses that are either not as good at explaining nature, or which are simply proved to be wrong.

Each climate model represents a hypothesis for how the climate system works. I must disagree with my good friend Dick Lindzen’s recent point he made during his keynote speech at the 4th ICCC meeting in Chicago, in which he asserted that the IPCC’s global warming hypothesis is not even plausible. I think it is plausible.

And from months of comparing climate model output to satellite observations of the Earth’s radiative budget, I am increasingly convinced that climate models can not be disproved. Sure, there are many details of today’s climate system they get wrong, but that does not disprove their projections of long-term global warming.

Where the IPCC has departed from science is that they have become advocates for one particular set of hypotheses, and have become militant fighters against all others.

They could have made their case much stronger if, in addition to all their models that produce lots of warming, they would have put just as much work into model formulations that predicted very little warming. If those models could not be made to act as realistically as those that do produce a lot of warming, then their arguments would carry more weight.

Unfortunately, each modeling group (or the head of each group) already has an idea stuck in their head regarding how much warming looks “about right”.

...

One of the first conferences I attended as a graduate student in meteorology was an AMS conference on hurricanes and tropical meteorology, as I recall in the early 1980’s. Computer models of hurricane formation were all the rage back then. A steady stream of presentations at the conference showed how each modeling group’s model could turn any tropical disturbance into a hurricane. Pretty cool.

Then, a tall lanky tropical expert named William Gray stood up and said something to the effect of, “Most tropical disturbances do NOT turn into hurricanes, yet your models seem to turn anything into a hurricane! I think you might be missing something important in your models.”

I still think about that exchange today in regard to climate modeling. Where are the model experiments that don’t produce much global warming? Are those models any less realistic in their mimicking of today’s climate system than the ones that do?

If you tell me that such experiments would not be able to produce the past warming of the 20th Century, then I must ask, What makes you think that warming was mostly due to mankind? As readers here are well aware, a 1% or 2% change in cloud cover could have caused all of the climate change we saw during the 20th Century, and such a small change would have been impossible to detect.

...

It seems to me that all the current crop of models do is reinforce the modelers’ preconceived notions. Dick Lindzen has correctly pointed out that the use of the term “model validation”, rather than “model testing”, belies a bias toward a belief in models over all else.

It is time to return to the scientific method before those who pay us to do science — the public — lose all trust of scientists.

I spent a number of years building models of computer system performance as part of engineering complex systems. Back in the early 1980s I had some confidence that my models were correct. But by the time the year 2000 rolled around, I realized that most of my models were wishful thinking. The underlying systems had gotten much more complicated. At the same time, the computer vendors were supplying less and less engineering data to support model building. The bottom line: it is extremely hard to model complex systems. Physicists are lucky in that their systems at root are simple, it is the interactions that are complex. But in most real world systems you have complex systems where the details of the elements at the bottom are murky at best. Models can't predict but they can show sensitivity and point out potential problems. They don't represent "reality".

Welfare for the Rich

Those who lived through the Reagan years remember how he played the race card with his "welfare queen" complaint. How dare these people live off the taxpayer. They should get a job.

But those same people have no problem with "hedge fund kings", guys who get to pretend that their income isn't income and instead is "capital gains" so they can be taxed at a much lower rate: 15% instead of 35%.

And this isn't peanuts. The very largest incomes in 2009 were for hedge fund managers. The top few make well over $1 billion. So these "hedge fund kings" each got to pocket at least $200,000 as a gift from the taxpayers.

That sure makes "welfare queens" look like pikers.

Here's a bit from an article by Robert Reich on this loophole, this welfare for the rich:

Who could be opposed to closing a tax loophole that allows hedge-fund and private equity managers to treat their earnings as capital gains – and pay a rate of only 15 percent rather than the 35 percent applied to ordinary income?

Answer: Some of the nation’s most prominent and wealthiest private asset managers, such as Paul Allen and Henry Kravis, who, along with hordes of lobbyists, are determined to keep the loophole wide open.

The House has already tried three times to close it only to have the Senate cave in because of campaign donations from these and other financiers who benefit from it.

...

It’s not as if these investment fund managers are worth a $20 billion subsidy. Nonetheless they argue that if they have to pay at the normal rate they’ll be discouraged from investing in innovative companies and startups. But if such investments are worthwhile they shouldn’t need to be subsidized. Besides, in the years leading up to the crash of 2008, hedge-fund and private equity fund managers weren’t exactly models of public service. Many speculated in ways that destabilized the whole financial system.

...

There is also a moral issue here. Call me old fashioned but I just think it’s wrong that a single hedge fund manager earns a billion dollars, when a billion dollars would pay the salaries of about 20,000 teachers.

Reich is optimistic that maybe something will be done to fix this. Go read the rest of the article for that glimmer of hope.

Creative Destruction

The term "creative destruction" was invented by Joseph Schumpeter to explain the upheavals of capitalism as new method and new products displace the old and individual lives are destroyed.

Here's a bit from a NY Times article by Catherine Rampell entitled "In Job Market Shift, Some Workers Are Left Behind":

Many of the jobs lost during the recession are not coming back.

Period.

For the last two years, the weak economy has provided an opportunity for employers to do what they would have done anyway: dismiss millions of people — like file clerks, ticket agents and autoworkers — who were displaced by technological advances and international trade.

The phasing out of these positions might have been accomplished through less painful means like attrition, buyouts or more incremental layoffs. But because of the recession, winter came early.

The tough environment has been especially disorienting for older and more experienced workers...

...

This “creative destruction” in the job market can benefit the economy.

Pruning relatively less-efficient employees like clerks and travel agents, whose work can be done more cheaply by computers or workers abroad, makes American businesses more efficient. Year over year, productivity growth was at its highest level in over 50 years last quarter, pushing corporate profits to record highs and helping the economy grow.

But a huge group of people are being left out of the party.

...

Economists have seen this type of structural change, which happens over the long term but is accelerated by a downturn, many times before.

“This always happens in recessions,” says John Schmitt, a senior economist with the Center for Economic and Policy Research. “Employers see them as an opportunity to clean house and then get ready for the next big move in the labor market. Or in the product market as well.”

...

But there is reason to think restructuring may take a bigger toll this time around. The percentage of unemployed workers who were permanently let go has hovered at a record high of over 50 percent for several months.

Additionally, the unemployment numbers show a notable split in the labor pool, with most unemployed workers finding jobs after a relatively short period of time, but a sizable chunk of the labor force unable to find new work even after months or years of searching. This group — comprising generally older workers — has pulled up the average length of time that a current worker has been unemployed to a record high of 33 weeks as of April. The percentage of unemployed people who have been looking for jobs for more than six months is at 45.9 percent, the highest in at least six decades.

...

Of course, just as there is a structural decline in some industries, others enjoy structural growth (the “creative” part of “creative destruction”). The key is to prepare the group of workers left behind for the growing industry.

“You can bring the jobs back for some of these people, but they won’t be in the same place,” says Thomas Anton Kochan, a professor of management at the Massachusetts Institute of Technology.

The White House has publicly challenged the idea that structural unemployment is a big problem, with Christina D. Romer, the Council of Economic Advisers chairwoman, instead emphasizing that stronger economic growth is what’s needed. Still, the administration has allocated dollars for retraining in both the 2009 stimulus package and other legislation, largely for clean technology jobs.

To the individual steamrollered by history, this isn't much of a consolation. It is like a soldier who loses his life in a war. A personal tragedy, but if you pull the frame back it may represent a war that's been won. Good for society, but a disaster for the individual.

Most developed countries recognize this paradox, so they have a social safety net to protect the innocent victims of an economic recession. But for some crazy reason, the US has a hypertrophied sense of individual liberty and responsibility, so it lets the victims of a big event like a recession suffer alone, usually ashamed for their personal "failings", when in fact the individual is up against the impersonal forces of economic history.

One parting shot: again the Obama administration is showing up a day late and a dollar short. They just don't recognize the wrenching adjustment that this Great Recession is imposing on roughly 10% of the population. I compare this to WWII while 10% of the population was at the front fighting a desperate war risking life daily while the other 90% were at home working -- long shifts to be sure -- but partying, and socializing, and feeling good because times were definitely better than the Great Depression. The burdens of war fell unevenly and unfairly on the generation of young men who fought to save their country for those at home safe from the ravages of war. This current economic storm is very much the same story.

Or... to put it grimly in the words of this article while reflecting on one victim of the financial catastrophe:

With so few local job prospects and most of her possessions of value already liquidated she has considered selling her blood to help pay for the move. But she says she cannot find a market for that, either; blood collection agencies, she said, told her they do not buy her blood type.

“Sometimes I think I’d be better off in jail,” she says, only half joking. “I’d have three meals a day and structure in my life. I’d be able to go to school. I’d have more opportunities if I were an inmate than I do here trying to be a contributing member of society.”

Put that grim reality up against those raking in big incomes while grousing about Obama's socialism, those dead set again any "tax increases" or "big government". They remind me of those partying late into the night in the early 1940s and complaining about gasoline rationing and how tough it was to buy a car or new tires.

Critique of Libertarianism

Here is a nice, short, to the point criticism of the libertarian ideology:

The folks who believe in libertarianism are like the folks who believe in Bigfoot. They can point to respected academics who share their delusion. They never let reality get in the way of a good story. And ultimately, libertarianism, like Bigfoot is nothing other than a white guy cavorting around in a cheap gorilla suit, an obvious fake.

I've said just about all I want to say about libertarianism here. Short version: The only good ideas in libertarianism are those that are already part and parcel of liberalism. The rest is poppycock. But someone who suffers fools far better than I has written a useful takedown in case you think there's any there there. The nub:

never, and I mean never, has there been capitalist enterprise that wasn't ultimately underwritten by the state. This is true at an obvious level that even most libertarians would concede (though maybe not some of the Austrian economists whom Rand Paul adores): for the system to work, you need some kind of bare bones apparatus for enforcing contracts and protecting property. But it's also true in a more profound, historical sense. To summarize very briefly a long and complicated process, we got capitalism in the first place through a long process of flirtation between governments on the one hand, and bankers and merchants on the other, culminating in the Industrial Revolution. What libertarians revere as an eternal, holy truth is in fact, in the grand scheme of human history, quite young. And if they'd just stop worshiping for a minute, they'd notice the parents hovering in the background.

Libertarians like Paul are walking around with the idea that the world could just snap back to a naturally-occurring benign order if the government stopped interfering. As Paul implied, good people wouldn't shop at the racist stores, so there wouldn't be any.

This is the belief system of people who have been the unwitting recipients of massive government backing for their entire lives. To borrow a phrase, they were born on third base, and think they hit a triple. We could fill a library with the details of the state underwriting enjoyed by American business -- hell, we could fill a fair chunk of the Internet, if we weren't using it all on Rand Paul already.

One of the problems with taking the trouble to refute bad rightwing nonsense - intelligent design creationism, birtherism, libertarianism - is that it is a complete waste of time. Everyone, including most of the people propagating them, knows these ideas are ludicrous.

I have spent time trying to argue with libertarians. It is very frustrating. It sure feels like a waste of time. You certainly aren't going to change the mind of a diehard, but the debate is not for the benefit of the opponent. It is for the benefit of those new on the scene and are just trying to get oriented and understand what political points of view are available. But once you get your bearings, it should be pretty clear that libertarians of fanatics. They are superficially rational, but they are missing a soul, empathy, groundedness in community. They live in cloud cuckoo land.