al Qaeda in Albuquerque

new blog

2009-01-19T23:50:00.001-08:00

Countdown clock at 0 days 0 hours 0 minutes 00.0 sec...

2009-01-19T20:55:00.000-08:00

... I think it's off by about 12 hours!

With many of my fellow citizens, I'll be watching PRESIDENT Obama take the oath of office tomorrow (10 a.m. local time).

Here 'tis:

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."
[U.S. Constitution, Article II, Section 1]

Note: the "so help me God" bit was added by Washington, setting a so-far unbroken precedent.

Pursuing W

2009-01-19T20:38:00.000-08:00

Yes - it would be easier to forget him & move on.

BUT the damage he has done cannot be set right without a full accounting.

Rep. John Conyers, Jr., said it well:

"I understand that many feel we should just move on. They worry that addressing these actions by the Bush administration will divert precious energy from the serious challenges facing our nation. I understand the power of that impulse. Indeed, I want to move on as well -- there are so many things that I would rather work on than further review of Bush's presidency. But in my view it would not be responsible to start our journey forward without first knowing exactly where we are.

"We cannot rebuild the appropriate balance between the branches of government without fully understanding how that relationship has been distorted. Likewise, we cannot set an appropriate baseline for future presidential conduct without documenting and correcting the presidential excesses that have just occurred."
[Why We Have to Look Back, WaPo, 16 Jan 2009]

One of my correspondents just sent me an email stating that he'd just sent a note to his Representative & Senators urging them to support Rep. Conyers's initiative.

I recall a perhaps apocryphal FDR anecdote:

FDR was, of course, a consummate political leader. In one situation, a group came to him urging specific actions in support of a cause in which they deeply believed. He replied: I agree with you, I want to do it, now make me do it.
[Franklin Delano Roosevelt: A Man of the Century, an address by William J. vanden Heuvel to the Monthly Meeting of The Century Association, 4 Apr 2002; emphasis added]

President Obama has indicated a reluctance to drag the nation through what would almost certainly be an ugly investigation.
Perhaps if he believed he had been forced to do it - forced by us, his constituents - he would be less reluctant.

Largely plagiarized from my correspondent's email, here's the letter I just sent Rep. Martin Heinrich, Sen. Tom Udall, and Sen. Jeff Bingaman:

I fully agree with Rep. John Conyers's call for a full and complete investigation of Bush Administration misconduct ("Why We Have to Look Back", John Conyers Jr., Washington Post, 16 Jan 2009; http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011503152.html).

We cannot just forget about it & move forward. We cannot just say mistakes were made. Recall George Santayana's quote, "Those who do not learn from history are doomed to repeat it." No one should be above the law. Especially the President of the United States and his administration.

Please initiate or support a full investigation of President Bush's actions as recommended by Rep. Conyers.
And please urge President Obama to allow the Department of Justice to pursue this investigation wherever it may lead.

Thank you.

For those of you in NM1, here's contact info:

Senator Jeff Bingaman
703 HART SENATE OFFICE BUILDING
WASHINGTON DC 20510
(202) 224-5521
E-mail: senator_bingaman@bingaman.senate.gov

Senator Tom Udall
B40D DIRKSEN SENATE OFFICE BUILDING
WASHINGTON DC 20510
(202) 224-6621

Congressman Martin Heinrich
1505 Longworth HOB
Washington, DC 20515
(202) 225-6316
[email contact form at: https://forms.house.gov/heinrich/contact-form.shtml]

Have a nice day.

MLK Day plans: doing my part

2009-01-16T19:37:00.000-08:00

I've been informed that Monday is MLK Day.
I'll commemorate it as W's LAST DAY - time to clean house.

Though it's not a particularly public-spirited gesture, I think I'll take the "clean house" bit literally, and clean the house.
The symbolism is worth it.

Have a nice day.

On second thought...

2009-01-16T01:25:00.000-08:00

... I may ask for Treasury to take over some "troubled assets".

Contest: can any of my readers suggest a multi-word, multi-syllabic, financial-instrument-sounding name for a PowerBall ticket? Using Enron-esque accounting I can value it at $20Mn - which value I honestly believe to be "impaired". If Treasury could take it off my hands at 10% of valuation, I'd be really happy.

Sing a song.

Just for fun...

2009-01-16T00:43:00.001-08:00

... I hit the U.S. Treasury's TARP website today, hoping to find some way to apply for TARP funds... without being indicted for fraud.

It's not clear that this is possible - all the posted deadlines have passed.
Maybe with the new funds (the next $350Bn) now available there'll be a window of opportunity. I'll visit Treasury again after the Inauguration.

My plan is simple: represent my current situation honestly. Use my SSN whenever magic ID numbers are sought. It'd be nice if I could come up with multi-syllabic, multi-word, bureaucratic-sounding synonym for "retired statistician & homeowner" as the name of my "privately held institution".
I'd be asking for direct infusion of $$$, not to unload "troubled assets".
I'd be more than happy to guarantee that funds would NOT be used to acquire other entities, to pay executive bonuses, or to fund extravagant weekend team-building exercises.

Have a nice day.

US Airways Flight 1549: Good news

2009-01-15T19:17:00.000-08:00

Not only did 150 + 5 crew walk off the plane thanks to expert response of captain & crew, BUT...

Nobody paid much attention to W's farewell address: all news focused on the 'miraculous' ditching of Flight 1549!

(... AND: W did NOT appear on the scene with bullhorn!!!)

W's farewell speech

2009-01-15T17:23:00.000-08:00

Sorry - I didn't watch it.
Did he use complete sentences?

Me? I'll be lunching with former colleague on Tues to celebrate, in his words, "the screen door hitting W’s ass on his way out."

I'll wait till Obama is formally sworn in to celebrate - I'm still waiting for a surprise that may keep W around longer.

Our MBA President at work

2009-01-12T02:19:00.000-08:00

[As previously noted, I'm going to miss that header - might as well use it frequently while I still can!]

Quick tapping of unspent $350 billion in works
By ANDREW TAYLOR and PHILIP ELLIOTT,
Associated Press Writer
Sunday, Jan 11, 2009
WASHINGTON – Senate Democratic leaders said a vote could come as early as this week on providing a second $350 billion for the financial industry, after assurances Sunday by President-elect Barack Obama and one of his top economic advisers that the money would be better monitored and spent.

Confession: My first read of this was that W was asking for the cash to spend in his final week in office.

... BUT- "Our MBA President at work" is still an okay header.
On Friday, 9 Jan 2009, the Congressional Oversight Panel published its second report on TARP.
The conclusions?
Shortened, paraphrased: Paulson's Treasury hasn't a clue!

A previous post noted Paulson's take on the situation:

"There is no playbook for responding to turmoil we have never faced," Paulson said in prepared remarks before the House Financial Services Committee.

This same previous post took the liberty of suggesting to SecTreas Paulson just what his job ought to be:

SecTreas Paulson, not that it's my place to tell you your job, but: isn't it a reasonable expectation that your top priority over the past 2 months ought to have been drafting a playbook???
This calls to mind a time-worn biz adage: "If there’s no time to do it right the first time, when will you find the time to do things over?"

So far I've seen no evidence that he's taken my advice!

Meanwhile, my email inbox features this purportedly true account:

The Mustang Ranch and $750 billion bail-out.

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

They failed and it closed. Now, we are trusting the economy of our country and 850+ Billion Dollars to a pack of nit-wits who couldn't make money running a whorehouse and selling booze. Now if that don't make you nervous, what does???

Note: this was under Bush 41 - like father, like son.
[FYI: previous post noted that W has presided over worst economic fiasco in modern U.S. history. The linked article notes that income growth showed similar stagnation only under Bush 41!... if anyone's interested, I've got nice Excel graphs that confirm this contention!]

Meanwhile, David Brooks insists that there's no evidence supporting a belief that fiscal stimulus works - pretty much ignoring the New Deal & JFK's response to 1960 recession.

"The Keynesian policies enacted under the Kennedy administration in the early 1960s had all the hallmarks of a successful economic experiment."
[Great Experiments in American Economic Policy: From Kennedy to Reagan]

In Brooks's world, the only reason we're talking fiscal policy is because we've run out of monetary policy options.

It's true that we've run out of monetary policy options - but that doesn't erase at least two very real examples of Keynesian fiscal policy success!

Have a nice day.

Our MBA President at work

2009-01-12T02:04:00.001-08:00

I'm going to miss being able to use that header!... Meanwhile:

Economy Made Few Gains in Bush Years
Eight-Year Period Is Weakest in Decades
By Neil Irwin and Dan Eggen
Washington Post Staff Writers
Monday, January 12, 2009
President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation's thorniest fiscal challenges.

Who'd a thunk?

Thankfully, this long national nightmare is ending soon.
[See Countdown Clock to the left!]

Galileo, redux

2009-01-11T22:39:00.000-08:00

In the latter half of the 20th century, historians of science questioned whether, in fact, Galileo had carried out the experiments he cited as evidence for his theories of falling bodies.
This perhaps healthy skepticism was put to rest with the discovery of "a manuscript page obviously containing experimentat data."

Galileo's own description suggests that he used both his pulse and a clepsydra (water-clock) to measure time:

"... We repeated this experiment more than once in order to measure the time with an accuracy such that the deviation between two observations never exceeded one-tenth of a pulse-beat...
...
"For the measurement of time, we employed a large vessel of water placed in an elevated position; to the bottom of this vessel was soldered a pipe of small diameter giving a thin jet of water which we collected in a small glass during the dime of each descent, wheter for the whole length of the channel or for part of its length; the water thus collected was weighed, after each descent, on a very accurate balance; the differences and ratios of these weights gave us the differences and ratios of the times, and this with such accuracy that although the operation was repeated many, many times, there was no appreciable discrepancy in the results."

That seems to settle the matter: Galileo used a water-clock.

But wait! Modern attempts to replicate Galileo's results have been unsuccessful - the accuracy he asserts cannot be replicated. Now - it could be that the moderns are less adept at experiment than was Galileo. This is not altogether improbable - as noted previously, Galileo is the experimental physicist par excellence.
[For what it's worth: Galileo mentions repeating his experiments "a full hundred times". If he averaged the results of these hundred trials, his asserted accuracy could easily have been attained. Indeed - as a professional statistician, I rather like this explanation. Galileo himself, however, makes no mention of averaging, and seems to suggest that each individual reading met his standard for reliabilty/accuracy.]

Nevertheless, a second, plausible method for determining the inverses of the required time ratios has been proposed (... by these same moderns who failed to reproduce Galileo's water-clock accuracy!). That is, a method whereby only distances need be measured directly, the time intervals being held constant.

I happen to find the alternative plausible.

Think: train on track, or car on segmented pavement - click-clack, click-clack... if traveling at constant velocity, the click-clack providing a constant beat.

Suppose that moveable 'frets' could be introduced into Galileo's inclined plane - such frets sufficiently small as to not significantly impede the descent of the marble... say, thin threads strung across the track. By adjusting these frets so that, to the human ear, the resulting click-clacks were equally spaced in time, Galileo could easily measure the distances between successive click/clacks to arrive at his laws of falling bodies - essentially holding time constant.

The moderns used this technique to achieve Galileo's stated accuracy. They further note that Galileo, coming from a family of musicians, "may have used rhythms in order to measure very short time intervals."

For a much fuller discussion (with photos, footnotes, and all that jazz), see Reconstructing Galileo’s Inclined Plane Experiments for
Teaching Purposes.

Me - I like the rhythm method!

Galileo's telescope: an anniversary

2009-01-09T02:34:00.000-08:00

Galileo did not invent the telescope.
Rather, he realized the telescope's potential for astronomy.

In his own words:

About ten months ago a report reached my ears that a certain Fleming had constructed a spyglass by means of which visible objects, though very distant from the eye of the observer, were distinctly seen as if nearby... A few days later the report was confirmed to me in a letter from a noble Frenchman at Paris, Jacques Badovere, which caused me to apply myself wholeheartedly to inquire into the means by which I might arrive at the invention of a similar instrument. This I did shortly afterwards, my basis being the theory of refraction...
...
It would be superfluous to enumerate the number and importance of the advantages of such an instrument at sea as well as on land. But forsaking terrestrial observations, I turned to celestial ones...
["The Starry Messenger" (1610), Discoveries and Opinions of Galileo, Translated with and Introduction and Notes by Stillman Drake]

Galileo discovered the moon to be mountainous and cratered; Venus to have phases, like the moon; and Jupiter to have moons, in a system neatly analogous to the Copernican universe.
Galileo is a delightful read (via English translation... I lack the capacity to read him in his original Italian.)

Why Galileo just now?

This was suggested by a loyal reader (see comments below).

"The Starry Messenger" was published in 1610. In it, Galileo states that he learned of "a Fleming's" invention of the telescope "about ten months ago".
It is likely that Galileo constructed his telescope, based on the theory of refraction, in 1609.

2009, then, is the 400th anniversary of Galileo's "discovery" of the telescope - and the revolution in astronomy which followed.

A digression.
Galileo represents the experimental physicist par excellence. In addition to his telescopic observations of the heavens, Galileo also discovered, empirically, the basic laws of motion.
By rolling marbles down inclined planes, timing & measuring the descent, Galileo discovered the relationship between time, distance, velocity, and acceleration later implied by Newton's Laws.

Note: Time is a dimension that Galileo considered.
Just how did he measure time?
Recall - Galileo is perhaps most famous for noticing that a pendulum's cycle defines a more-or-less constant unit of time.
For calculus freaks: pendulum clocks work because

limit[t -> 0] sin(t)/t = 1.

Okay - back to the question:
Given his lack of a clock, how did Galileo measure time?
[I know the answer... or, more correctly, I know a plausible answer - not necessarily the true answer.]

... my original intent was to keep writing - to reveal Galileo's secret for measuring time without a clock...

But then I thought better of it.
Best to leave this puzzle for my loyal readers.
Please - if you've an idea, post a comment!

I'll reveal Galileo's secret (or at least, as previously stated, a plausible version of Galileo's secret) in a later post...

Sing a song!

I lied... again

2009-01-05T20:51:00.000-08:00

... sort of...

look for 2-3 more posts on AQA, then for a new blog.

AQA is still retiring, for reasons previously cited... BUT i'll still be writing - just on a new, yet-to-be-named blog.

meanwhile: W's wonderful year-old peace initiative in the MidEast has certainly borne fruit: 10 days of carnage in Gaza!!! Way to go, W!!! (... and he & his minions are still calling for a "permanent" solution as precondition for cease-fire - just like in Lebanon a couple of years ago!)

Bye!

2008-12-31T21:18:00.000-08:00

Happy New Year!

Unless something very strange happens, AQA is retiring.

W shows no signs of sticking around - I'm happy to give him & his minions a couple of weeks of respite from my brilliantly scathing commentary.

Thanks to all!

Channeling Tom Lehrer

2008-12-20T00:09:00.000-08:00

"Political satire became obsolete when Henry Kissinger won the Nobel Peace Prize."
[Tom Lehrer]

That pretty much sums up my response to most recent headlines.

Self-parody quickly puts parodists out of work.
What can one say in response to headlines like these?

Bush orders emergency bailout of the auto industry
Judge toughens Madoff's home detention rules
Iraqi judge orders Baath party plot suspects freed
Mother of Palin daughter's boyfriend arrested

The news is absurd absent my commentary.

Stop the madness!

"Looks like I picked the wrong week to quit sniffing glue."

2008-12-17T23:40:00.000-08:00

I don't know why, but that line from the 1980 movie Airplane! somehow seems to fit.

Oil dropping below $40/bbl.

Price of everything dropping - more rapidly than anytime since 1933 ("... it was a very good year").

Chrysler & Ford to idle U.S. plants. (GM still hasn't a clue.)

W attacked by shoe-flinging journalist in Iraq.

Madoff admits running a $50Bn Ponzi scheme, in which, apparently, half the capitalist world invested.

W is musing publicly about his soul.

I'm left speechless, capable only of quoting a tasteless comedy gem:

"Looks like I picked the wrong week to quit sniffing glue!

Have a nice day.

p.s. ... and hell froze over:

Against The Odds, Snow Dumps On Las Vegas
7,000 Without Power In Vegas Area
Thursday, December 18, 2008 LAS VEGAS
What's happening in Las Vegas is staying in Las Vegas: snow.

Don't let 'em do it!

2008-12-16T19:36:00.000-08:00

A few folks on cable news/commentary have been noting that there's an official "Bush Legacy" project, led by Rove, aimed rehabilitating W's reputation. [See, e.g., Karl Rove launches 'Bush legacy project' with Iraq war claim.]

Exit interviews with the players have been fun.

Bush: "... One of the major theaters against al Qaeda turns out to have been Iraq. This is where al Qaeda said they were going to take their stand. This is where al Qaeda was hoping to take ..."

[ABC News' Martha] RADDATZ: But not until after the U.S. invaded.

BUSH: Yeah, that's right. So what?

Rove suggesting that without the WMD intel, we wouldn't have invaded...

Then Cheney, today, saying we would've invaded even without the WMD intel, 'cuz Saddam still had the capability to produce WMD. [Short of executing every Ph.D. scientist & incinerating every chemical in the country, it's difficult to see what Saddam could have done to completely remove the "capability" to make WMD!]

But... this is not the point of this post!
The point is:

Don't let 'em do it!

Matt Ygelsias puts it well:

The harsh reality is that this [Iraq fiasco] was not a noble undertaking done for good reasons. It was a criminal enterprise launched by madmen cheered on by a chorus of fools and cowards. And it’s seen as such by virtually everyone all around the world — including but by no means limited to the Arab world. But it’s impolitic to point this out in the United States, and it’s clear that even a president-elect who had the wisdom not to be suckered in by the War Fever of 2002 has no intention of really acting to marginalize the bad actors. Which, I think, makes sense for his political objectives. But if Americans want to play a constructive role in world affairs, it’s vitally important for us to get in touch with the reality of what the past eight years of US foreign policy have been and how they’re seen and understood by people who aren’t stirred by the shibboleths of American patriotism.
[An Empire of Sentimentality]

Stop the madness!

I'm pretty sure zero (0) is a lower bound

2008-12-16T15:23:00.000-08:00

Fed cuts target for key rate to record low
AP, 16 Dec 2008
WASHINGTON – The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.

The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.

0.25%!

I suppose it is possible to go negative - making borrowing money a money-making proposition!

Have a nice day.

They can't leave soon enough!

2008-12-15T14:58:00.000-08:00

Rice: Bush approach best to achieve Mideast peace

For 35 more days we must tolerate these imbeciles!

Obama elected 44th U.S. President!

2008-12-15T14:54:00.000-08:00

It's official: Barack Obama elected 44th president
AP, 15 Dec 2008
RICHMOND, Va. – Presidential electors have formally elected Barack Obama the nation's 44th president.

Whew!

Management by-the-numbers: an eerily familiar ring

2008-12-13T23:55:00.000-08:00

Previous post sent folks to NYT article, Report Spotlights Iraq Rebuilding Blunders.

Of the many... uh, questionable practices highligted in this article is the following:

"... In one passage, for example, former Secretary of State Colin L. Powell is quoted as saying that in the months after the 2003 invasion, the Defense Department “kept inventing numbers of Iraqi security forces — the number would jump 20,000 a week! ‘We now have 80,000, we now have 100,000, we now have 120,000.’ ”

This has a very familiar ring to it.

Back in the day, I was an Enron junkie. Here's a lengthy quotation from Kurt Eichenwald's Conspiracy of Fools:

"... Enron projected earnings per share of $1.80 for 2001. But the real delight was 2002 - $2.25 a share. Impressive. But how? There was nothing explaining what Enron was planning to do to achieve such stellar results.

During a negotiating session later that day, Tarpley decided to ask. He looked across the table at Dave Delainey.

"Dave," Tarpley said, "I'd really like to get a copy of Enron's business plan for 2002."

Couldn't happen Delainey said. "We don't have a business plan available," he said.

How then, Tarpley asked, did Enron get its 2002 projections if it didn't know what it was planning to do?

Delainey shrugged. "We just increased the prior year's results by 25 percent," he said simply.

Cool!

Again, just exactly what are they teaching folks at the Harvard Business School?

I think that body-counts are a ridiculous metric for success in war, but I've seen nothing to suggest that this metric was systematically falsified during the Viet Nam conflict (I could be wrong!).
... and the low numbers of "al Qaeda leaders killed" in both Iraq & Afghanistan suggest that body-counts of bad guys aren't being inflated in today's pointless wars.

BUT - you have to have something to measure... or at least, some numbers to report.
And if you can't honestly measure what you claim, making up the numbers is as good a way as any to fabricate progress!

More recent - unrelated - news reports a gigantic ($50Bn) Ponzi scheme engineered by brilliant Wall Street money-manager, Bernard Madoff.

[aside: "Word of the day" - desultory

des·ul·to·ry
1. Moving or jumping from one thing to another; disconnected
[The Free Dictionary Online]

Yes - this is a desultory post!]

All of which leads me to ask - Why not turn over management of Citi, GM, and the Pentagon to just regular folks?
Folks who have managed a household budget for 20+ years?
Folks who will ask silly questions like, "How?"?

The "best & the brightest" don't seem to be doing such a great job.

Stop the madness!

Where to start?

2008-12-13T23:05:00.000-08:00

Report Spotlights Iraq Rebuilding Blunders
By JAMES GLANZ and T. CHRISTIAN MILLER
Published: December 13, 2008
NYT
BAGHDAD — An unpublished 513-page federal history of the American-led reconstruction of Iraq depicts an effort crippled before the invasion by Pentagon planners who were hostile to the idea of rebuilding a foreign country, and then molded into a $100 billion failure by bureaucratic turf wars, spiraling violence and ignorance of the basic elements of Iraqi society and infrastructure.

The article is worth a read!

Where to start?

First, why "unpublished"?
These are OUR tax dollars at work. This is OUR Government!
Why aren't we allowed to read the report?

Next... "Our MBA President" comes to mind.
What management geniuses are being turned out by Harvard Business School?

This is so wrong on so many levels that it's difficult to know where to begin.

In previous posts I've noted some of the high-profile rebuilding failures - Laura's state-of-the-art Children's Hospital in Basra comes to mind.
Others have done a much more thorough job investigating the massive contractual failures.

I don't envy President-elect Obama.

It'll take MY country years - perhaps decades - to recover from the W virus.

Can Iraq be put right?

Humpty Dumpty
Humpty Dumpty sat on a wall;
Humpty Dumpty had a great fall.
All the King's horses
And all the King's men
Couldn't put Humpty together again!

I doubt it.

Stop the madness!

Loyal readers...

2008-12-13T00:56:00.000-08:00

Those of you still with me will have noticed that postings have been extremely infrequent.

Two things:
thing1: I'm in a show - Scrooge - the Musical, with Musical Theatre Southwest.
Runs Dec 12 - 28 at the African-American Cultural Center - west side of the fairgrounds (San Pedro & Copper).
Info: here.

thing2: As predicted, with W leaving my outrage has been considerably diminished.
This blog was founded as a protest against W and his minions.
I've little to say that's unrelated to bashing W (... and his minions).

Come 20 Jan 2009 I expect to have nothing to compel me to write.

Have a nice day.

Dec 7

2008-12-07T20:18:00.000-08:00

“A Date Which Will Live in Infamy”: FDR Asks for a Declaration of War
President Franklin D. Roosevelt: Yesterday, December 7, 1941—a date which will live in infamy—the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.

The United States was at peace with that nation, and, at the solicitation of Japan, was still in conversation with its government and its emperor looking toward the maintenance of peace in the Pacific. Indeed, one hour after Japanese air squadrons had commenced bombing in the American island of Oahu, the Japanese ambassador to the United States and his colleague delivered to our secretary of state a formal reply to a recent American message. While this reply stated that it seemed useless to continue the existing diplomatic negotiations, it contained no threat or hint of war or armed attack.

It will be recorded that the distance of Hawaii from Japan makes it obvious that the attack was deliberately planned many days or even weeks ago. During the intervening time the Japanese government has deliberately sought to deceive the United States by false statements and expressions of hope for continued peace.

The attack yesterday on the Hawaiian Islands has caused severe damage to American naval and military forces. I regret to tell you that very many American lives have been lost. In addition, American ships have been reported torpedoed on the high seas between San Francisco and Honolulu.

Yesterday the Japanese government also launched as attack against Malaya.

Last night Japanese forces attacked Hong Kong.

Last night Japanese forces attacked Guam.

Last night Japanese forces attacked the Philippine Islands.

Last night Japanese forces attacked Wake Island.

And this morning the Japanese attacked Midway Island.

Japan has, therefore, undertaken a surprise offensive extending throughout the Pacific area. The facts of yesterday and today speak for themselves. The people of the United States have already formed their opinions and well understand the implications to the very life and safety of our nation.

As commander in chief of the Army and Navy I have directed that all measures be taken for our defense. But always will our whole nation remember the character of the onslaught against us. . .

(note: I probably wouldn't have remembered this anniversary if it weren't for TV today!)

self-delusion (mine): yes, W reads AQA!

2008-12-05T12:43:00.000-08:00

A day or two ago I noted that words do matter, at least when they reflect a diagnosis, and that W's refusal to call the current economic mess a recession could have policy implications.

Well... yesterday, WH Press Secy Perino finally used the "R" word.
... and today, W himself did!

Bush: Jobless rate shows U.S. in recession
WASHINGTON, Dec. 5 (UPI) -- The U.S. jobless rate shows the country is in a recession resulting from poor housing and the troubled financial markets, President George Bush said Friday.

Sitemeter reflects no activity from anything that looks like a WH server, but who knows? Maybe AQA is W's first read in the morning!

AIG (old news)

2008-12-04T00:27:00.001-08:00

AIG to pay retention bonuses to executives
By Greg Farrell in New York
Published: November 26 2008
Financial Times
One day after announcing strict limits on salaries and bonuses for its top tier of executives, AIG revealed that some of those executives will receive millions in “retention bonuses” next year.

[apologies for missing this when it was first reported...]

Am I missing something?
A couple of what seem to me obvious questions present themselves:

1. Why do you want to retain the team that got you into the mess you're in?

2. Where are these guys going to find other jobs?

I know it's a lousy analogy, but there are a number of "successful" college football coaches losing their jobs at the end of this season due to recent poor performance - it doesn't matter that they have an overall winning record - this year and maybe last were not up to expectations. Time to get new blood!

Why are financial geniuses different?

Why keep the same team? - Do corporate boards do anything???

Stop the madness!

Deja vu all over again?

2008-12-04T00:05:00.000-08:00

Experts' Report Urges Changes in National Security System
By Walter Pincus
Washington Post Staff Writer
Thursday, December 4, 2008
A bipartisan panel of foreign policy experts, including some associated with the incoming Obama administration, has recommended changes in the White House national security apparatus that would provide the president and his staff with new tools to ensure interagency cooperation.

Forgive me for being dense, but wasn't ensuring interagency cooperation the whole idea behind the creation of Dept of Homeland Security and the position of Director of National Intelligence???

So... more than 7 years after 9/11, we still don't have our act together???... and yet another blue-ribbon panel is recommending better interagency cooperation???

W: the gift that keeps on giving!

Stop the madness!!!

Fun with the Constitution

2008-12-03T16:10:00.000-08:00

Article I, Section 6
... No Senator or Representative shall, during the time for which he was elected, be appointed to any civil office under the authority of the United States, which shall have been created, or the emoluments whereof shall have been increased during such time...

SoS salary has increased during Sen. Clinton's current term. Can she serve as SoS?

This oughta be fun!

Nicholas Eymerich, revisited

2008-12-03T12:45:00.000-08:00

Previous posts have introduced readers to

Nicholas Eymerich, inquisitor general of the Inquisition of the Crown of Aragon; 1357-1360, 1366(?)-1381(?):
He was the first inquisitor to get around the Church's prohibition against torturing a subject twice by interpreting directive very liberally, permitting a separate instance of torture for a separate charge of heresy.
[Wikipedia entry, Nicholas Eymerich]
After many years as Inquisitor General, he finally concluded that,
"Quaestiones sunt fallaces et inefficaces."
["Torture is deceptive and ineffectual."]

Today?

I'm Still Tortured by What I Saw in Iraq
By Matthew Alexander
Sunday, November 30, 2008
WaPo op-ed
"... Torture and abuse are against my moral fabric. The cliche still bears repeating: Such outrages are inconsistent with American principles. And then there's the pragmatic side: Torture and abuse cost American lives.

I learned in Iraq that the No. 1 reason foreign fighters flocked there to fight were the abuses carried out at Abu Ghraib and Guantanamo. Our policy of torture was directly and swiftly recruiting fighters for al-Qaeda in Iraq. The large majority of suicide bombings in Iraq are still carried out by these foreigners. They are also involved in most of the attacks on U.S. and coalition forces in Iraq. It's no exaggeration to say that at least half of our losses and casualties in that country have come at the hands of foreigners who joined the fray because of our program of detainee abuse. The number of U.S. soldiers who have died because of our torture policy will never be definitively known, but it is fair to say that it is close to the number of lives lost on Sept. 11, 2001. How anyone can say that torture keeps Americans safe is beyond me -- unless you don't count American soldiers as Americans."

Torture does NOT work.

A lesson learned by a Spanish Inquisitor in the 14th-century bears repeating today:

"Quaestiones sunt fallaces et inefficaces."
["Torture is deceptive and ineffectual."]

why words matter

2008-12-03T12:34:00.000-08:00

Feeling under the weather, you visit your doctor.
Your doctor diagnoses "flu", and treats you accordingly.
In fact, you have bubonic plague.
You die.

Recall, Rummy explicitly refused to call the Iraq insurgency an "insurgency".
The result?
We mounted no effective counter-insurgency campaign.
The insurgents took over Iraq.

Today? From Think Progress:

White House Still Won’t Use The Word ‘Recession,’ Press Corps Doesn’t Seem To Notice

Does it matter that WH refuses to use the word "recession"?

As suggested by preceding comments, I believe it does.
If you do not correctly diagnose the illness, you are unlikely to prescribe an effective treatment.
[I note that the conservatives are still characterizing the current mess as a financial problem resulting in a credit freeze.
... and this continues to have policy implications: the Fed & Treasury continue to pursue treatment protocol that seems very heavily weighted towards injecting $$$ into financial sector.
So far it hasn't worked.]

Stop the madness.

Headline humor (?)

2008-12-02T00:59:00.000-08:00

2 US soldiers probed for Afghan prisoner abuse

"Probed"???

Does anyone else find this word choice both appropriate and... funny?

Other noted this first

2008-12-02T00:52:00.000-08:00

I think Rachel Maddow is the person who first noted this:

Prez-elect Obama delivered an economy-related press conference Mon-Wed last week.

Each day the market shot up.

Meanwhile, whenever W or his minions addressed the economy, the market tanked.

The predictive value of this observation continued on Monday.

Paulson held a press conference, promising, "We are actively engaged in developing additional programs to strengthen our financial system so that lending flows into our economy."

As predicted, the market tanked!

Day-trading based on who's holding an economy-related press conference (W/minions vs Obama) could be profitable.

Sing a song.

Next time someone complains about U.S. "activist judges"...

2008-12-02T00:22:00.000-08:00

Court ruling brings down Thai government
By AMBIKA AHUJA, Associated Press Writer
2 Dec 2008
BANGKOK, Thailand – A court dissolved Thailand's top three ruling parties for electoral fraud Tuesday and temporarily banned the prime minister from politics, bringing down a government that has faced months of strident protests seeking its ouster.

Wow!

note: I'm not sanguine about Roberts, Alito, Scalia, et al., upholding convictions of W and his enablers.

Have a nice day.

Blast from the past

2008-12-02T00:16:00.001-08:00

W's radio address, 29 Dec 2007:

"One of our greatest blessings as Americans is that we live in a country with a growing economy -- where people can pursue their dreams, turn ideas into enterprises, and provide for their families. It is a measure of our economy's resilience that even with high oil prices and softness in the housing market, we're still growing. In November, our economy added jobs for the 51st straight month, making this the longest period of uninterrupted job growth on record. Unemployment is a low 4.7 percent. Exports are up. And the fundamentals of our economy are strong."
[President's Radio Address]

And today?

US in recession since December 2007: official panel
by Rob Lever Rob Lever
Mon Dec 1, 2008
WASHINGTON (AFP) – A US recession began in December 2007, a panel of economists charged with the official designation of business cycles said Monday.

Yep - W's on top of it!

Have a nice day.

Iraq Parliament approves SOFA

2008-11-27T18:41:00.000-08:00

Iraq Approves Long-Debated U.S. Security Pact
By RANIA ABOUZEID
Thu Nov 27, 2008
Time
Iraq's Prime Minister Nouri al-Maliki on Thursday finally got the broad consensus he sought on the Status of Forces Agreement with the U.S. - 149 of the 198 lawmakers present in the 275-member National Assembly gave their support to a deal that allows American forces to remain in Iraq until the end of 2011.

Now maybe W's Administration will publish the official English version so we can all learn what we're now committed to!

p.s. "Ask and you shall receive."
Here's a link to the text: Iraq SOFA

Happy Thanksgiving!

2008-11-27T00:57:00.001-08:00

I'll start an annual tradition - re-running last year's Thanksgiving post:

Thanksgiving is my favorite holiday.
It's secular - religious overtones are secondary.
It's American - the rest of world goes on happily without us.

Most of all, for me the basic premise - giving thanks - is a good thing. Yes, I am thankful for my family, for my undeserved good-fortune in life, for friends.

Most of my family is in town. None of us started out here - we all just ended up here. I've 3 sisters. 2 of 'em are in town, with their husbands. My mom is in town. My wife's folks are in town. Her sister & bro-in-law are in town. A sister's sister-in-law is in town. Our kids are in town. My daughter-in-law's folks are in town.

What this means from a Thankgiving perspective is that we enjoy a pretty phenomenal feast each year. Someone volunteers to host - this year it was my son & daughter-in-law. Host is responsible for turkey. Everything else is provided by everyone else. Everyone brings enough to feed everyone.

My bad: I do not feel guilty about this surfeit. I AM thankful!

So: Happy Thanksgiving, with friends & family!

This year bro- and sis-in-law (my wife's sister) are hosting. In addition to standard Thanksgiving, the feast will likely include tamales from a local eatery - sis-in-law Brenda almost always provides these for large gatherings!

Here's hoping you all have reason to give thanks!

"Self-regulation", Citi style

2008-11-25T20:28:00.000-08:00

Citigroup Saw No Red Flags Even as It Made Bolder Bets
NYT
By ERIC DASH and JULIE CRESWELL
Published: November 22, 2008
... But many Citigroup insiders say the bank’s risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings — and executives’ multimillion-dollar bonuses — failed to rein them in, these insiders say.

Again: the next time your respected opponent mentions "self-regulation", laugh loudly.

Digression: The article cited above reads a lot like similar post-mortem articles written about Enron.
Seems no one paid much attention to the dynamics of Enron's failure once the blame was pinned on Lay, Skilling, and Fastow.
"Just a few bad apples - that could never happen here!"

Yes, Lay was willfully, negligently ignorant. Yes, Skilling pushed beyond the bounds of prudent business practice; and yes, Fastow was more than happy to take advantage of Skilling's greed to line his own pockets... but the real story was the complete failure of Enron's internal controls.

... and, yes: it could happen "here" - wherever "here" might be!

W's "partners" seem to be playing for Team Obama

2008-11-25T20:09:00.000-08:00

Afghanistan demands 'timeline' for end of military intervention
Tue Nov 25, 2008
KABUL (AFP) – President Hamid Karzai demanded at a meeting with a UN Security Council team Tuesday that the international community set a "timeline" for ending military intervention in Afghanistan, his office said.

Karzai told a delegation from the Council that his country needed to know how long the US-led "war on terror" was going to be fought in Afghanistan or it would have to seek a political solution to a Taliban-led insurgency.

Between the Iraq SOFA & Karzai's new-found independence, could be the U.S. will be disengaged from W's fiascos sooner rather than later.

Stop the madness!

"Now, what was the question?"

2008-11-25T19:32:00.000-08:00

From C&L (Paul Krugman: 'Caricature Economics`):

Looking for new ideas to help the economy? Please don't look to Rep. John Boehner for any new ideas. And this is not from the debate episode of the West Wing.
He said this on FNS:
“If we’re really serious about creating jobs, what we ought to do is, we ought to eliminate the capital gains tax for the next two years on any equities that are purchased,” he said. He argued that cutting the corporate income tax would help boost employment.
As Krugman notes:
The answer is, eliminate the capital gains tax. Now, what was the question?

This brings back a memory: on Sept. 13, 2001, I got frantic calls from staffers on Capitol Hill. They informed me that Republican leaders in the House were trying to use the terrorist attack to ram through, you guessed it, a cut in the capital gains tax.
He's [sic] something you can never forget.
Meanwhile, at a panel discussion with Rich Lowry of National Review, I heard the latest argument against the Employee Free Choice Act: now would be a really bad time to make union organizing easier, because it would hurt business confidence in a recession.

Recession, recovery, whatever: it’s always proof that the Bush years should continue forever.

As I've noted previously:

Folks, when "tax cuts" is THE solution for the economy in all cases - whether it's in dire straits or robust & healthy - then we all oughta be saying, "Hmmmm".

... and, for what it's worth, the folks that are selling us "tax cuts" oughta be labelled as snake-oil salesmen!!!

... The re-emergent anti-union theme is just a nice cherry on top of the sundae! Labor bad! Management good!

I'll re-quote Atrios:

"Damn those unions for destroying Citigroup!!!"

Have a nice day.

I'm thinking Boehner needs econ refresher

2008-11-25T15:23:00.000-08:00

"Republican Leader John Boehner of Ohio said he hoped the new administration would listen to those "who do not believe increasing government spending is the best way to put our economy back on track."
[Obama urges Congress to pass costly stimulus bill]

Recall:

GDP = C + I + X + G, with
C = personal/household Consumption,
I = Investment
X = net Exports
G = Government purchases (consumption + investment)

Consumer spending is in the tank & going nowhere but down.
Investment is in the tank and going down.
Exports - until recently a bright spot - are going down.

From where other than "G" does Boehner hope to get GDP going again???

Pre-emptive framing

2008-11-24T20:59:00.000-08:00

"This company is dead. I didn't kill it. Don't blame me.
It was dead when I got here."
[Lawrence Garfield (the Danny Devito character), Other People's Money, 1991]

In the days, weeks, months, and years to come, our respected Republican opponents will do whatever they can to pin the messes of Iraq & Afghanistan, and the disaster that is our economy, on Obama and congressional Dems.

We cannot afford to let 'em succeed.

It's time NOW to start repeating - often, frequently, and at every opportunity:

These are W's failed wars.
This is the Republicans' critically ill economy.

For the economy, it wouldn't hurt to pin the blame on the Republicans' Saint Reagan and "supply-side", "trickle-down" economics.

Ridicule can be an effective rhetorical weapon.
Laugh out loud whenever anyone prattles on about the free-market.
Laugh louder whenever anyone advocates "self-regulation" of markets, or of particular industries.

Fearlessly face down your esteemed colleague when he/she attempts to pin any of this on the Dems.

"Excuse me. W and his enablers, including a very vocal Republican congress, got us into these straits. Republican worship of Saint Reagan and his now-debunked trickle-down, anti-regulation economics is to blame for the mess we're in now. Republican ideology got us into Iraq under false pretenses. Republican ideology misgoverned Iraq for over two years - putting ideological purity above basic competence - and allowed the insurgency to flourish. Republican failures of imagination contributed to the attacks on 9/11, and to a blind faith in market self-regulation."

If your respected opponent persists and perhaps suggests that, "Government is never the solution", be prepared!

"Well, yes - I can understand your point of view.
If Republican governance is the standard, then you are, of course, correct.

Government per se is not dysfunctional.
Only Republican government!.

But, a well-run government - the government you will get from President Obama and congressional Dems - is a different story.
We happen to believe that good governance is possible - and we intend to prove it."

Stop the madness (before it begins!).

a "Deep Thought" from Atrios

2008-11-24T13:53:00.001-08:00

The Right is - predictably - blaming the UAW for Big 3's woes.

Atrios has a nice rejoinder:

"Damn those unions for destroying Citigroup!!!"

(I'm amazed that Atrios maintains his sense of humor!)

Stop the madness!

One more look at $7.76 trillion

2008-11-24T13:32:00.000-08:00

Current population of U.S. ~ 300,000,000.
$7.76 trillion represents just over $25,000 per person.

Now, I've got fairly pricey individual health insurance, running just under $5,000/year.
That $25,000 represents five years of health insurance premiums for me!
(Actually, if I use actual numbers - not rounded - my share of $7.76 trillion is closer to six years of health insurance premiums!)

That $7.76 trillion we're prepared to guarantee...

2008-11-24T12:46:00.000-08:00

To help put that $7.76 trillion cited by Bloomberg (U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit) in perspective:

$7.76 trillion supports 155,200,000 median-income households for a year.
[I believe the Census Bureau's current estimate is that there are about 120,000,000 households in the U.S.]

Alternatively, we could give each of the 120,000,000 U.S. households just under $65,000. (If you're a household facing foreclosure, you could use the $65,000 to help get current on your mortgage!... the rest of us could buy stuff or invest the $$$ - "demand-side" economics!!!)

Changing Country Mix in World Market-Cap, posted 20 June 2008, reports that:
"Today, the US market (proxy SPY) has declined to less than 41%" of total WORLD free-float market capitalization.
The total WORLD free-float market capitalization was estimated to be around $30.7 trillion.
41% of $30.7 trillion is about $12.6 trillion.
Since June 2008, the Dow (which I'll use as proxy for U.S. market capitalization) has declined about 30%.
That leaves us with 70% of $12.6 trillion, which is about $8.8 trillion.

(Drum-roll, please!):
With $7.76 trillion the U.S. could buy, outright, close to 90% of outstanding shares in all U.S. companies!!!
[Note: "free-float" represents "freely investable shares. Free-float excludes shares not available for trading, such as government owned shares."]

Pretty cool!

In summary: four yardsticks to help comprehend $7.76 trillion:

1. 50% of U.S. GDP
2. 155,200,000 median-income households (about 30% more households than actually live in the U.S.!)
3. $65,000 for each of the 120,000,000 U.S. households.
4. 90% of shares in publicly traded U.S. companies

Stop the madness!

What??? - (... and how come we can't fund S-CHIP?)

2008-11-24T12:05:00.000-08:00

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit
By Mark Pittman and Bob Ivry
Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

Has anyone suggested we no longer count financial sector $$$ in GDP?

Does this sound slightly askew to anyone but me???

W's legacy - never much to brag about - is getting worse daily.
What'll be left of the U.S. when he's done with us?

Stop the madness!

Thought for the day

2008-11-24T11:55:00.000-08:00

Unless things change, they are likely to remain the same.

What "peace" looks like

2008-11-24T09:04:00.000-08:00

The surge worked. Violence in Iraq is down.
What's "peace" look like?
Here's a description of Samarra in September, 2008:

"[The First Brigade Combat team] had reinforced a berm - a continuous mound of earth - that surrounded the city, constructed watchtowers for constant surveillance, and set up three check-points through which much of the city's population passed. Samarra was broken into a dozen neighborhoods, each one protected by a perimeter of blast walls."
[Iraq: Before & After, and Now, Joshua Hammer, The New York Review of Books, 4 Dec 2008]

Recall:

Baghdad's highway of death takes on new life
Mar 25, 2008
BAGHDAD (AFP) — The sale in Baghdad of peaked caps boasting "I survived Route Irish" have slumped -- reaching the capital's international airport is no longer the perilous dash it used to be, and the slogan is losing its relevance.
...
"We are turning it into an impregnable security corridor. No one will be able to penetrate it to be able to plant roadside bombs," [Police] Colonel Asadi told AFP, while inspecting one of the endless checkpoints set up along the four-lane highway.

Yes - the road is now safe... it is "an impregnable security corridor".

To achieve security, we've turned Iraq into a patchwork of barricaded neighborhoods, walled cities, and impregnable security corridors.

... and we still see headlines like this:

Baghdad bombs kill 20, 1 hits Green Zone entry

... this dated TODAY!

Imagine an American city in which suicide bombers killed 20 people every couple of weeks.

Stop the madness!

Observations (this, that, and t'other)

2008-11-24T08:19:00.000-08:00

The U.S. is the only G-8 nation without some form of universal health care.
[Note: G-8 = U.S., Canada, France, Germany, Italy, Japan, Russia, the United Kingdom.]

All but Russia have longer life expectancy than U.S.

Japan: 82.07 yrs (CIA World Factbook); [82.6 (U.N.)]
France: 80.59 yrs; [80.7]
Canada: 80.34 yrs; [80.7]
Italy: 79.94 yrs; [80.5]
Germany: 78.95 yrs; [79.4]
U.K.: 78.70 yrs; [79.4]
U.S.: 78.06 yrs; [78.2]
Russia: 65.87 yrs; [65.5]

Infant mortality? Again, the U.S. trails:

(deaths/1000 live births)
Japan: 2.80 (CIA World Factbook); [3.2 (U.N.)]
France: 3.36; [4.2]
Germany: 4.08; [4.3]
U.K.: 4.93; [4.8]
Canada: 5.08; [4.8]
Italy: 5.61; [5.0]
U.S.: 6.30; [6.3]
Russia: 10.81; [16.6]

Finally, early childhood mortality:

(deaths/1000 live births, children under 5)
Japan: 4.2 (U.N. Population Division)
France: 5.2
Germany: 5.4
Canada: 5.9
U.K.: 6.0
Italy: 6.1
U.S.: 7.8
Russia: 20.9

Maybe if we started calling it "universal health care" - NOT "socialized medicine" - it'd be more appealing to us rugged individualists!

Note to Dems: take care with names. - Names matter!
Recall: the Republicans gave us the "Clean Skies Act" of 2003; the so-called "Patriot Act"; and, long ago, the "Contract with America".
... and, as W reminds us, we don't torture: we use "enhanced interrogation techniques"!

A digression (... oh, heck - this whole post is a digression!):
Perhaps if the 111th Congress moved quickly to enact universal healthcare, they could simultaneously move to save the Big 3 auto makers - eliminating the need for the Big 3 to provide health care benefits to workers & pensioners!

Have fun!

An anniversary I forgot (but meant to remember!)

2008-11-24T00:48:00.000-08:00

It's not often one can date with precision - down to the day - the origin of a new word or phrase.

A specific instance that can be precisely dated is the phrase, "drink the kool-aid", which derives from the Jonestown mass murder/suicide on 18 Nov 1978.

The online Urban Dictionary provides three related meanings:

1. One lasting legacy of the Jonestown tragedy is the saying, “Don’t drink the Kool-Aid.” This has come to mean, "Don’t trust any group you find to be a little on the kooky side." or "Whatever they tell you, don't believe it too strongly".

The phrase can also be used in the opposite sense to indicate that one has embraced a particular philosophy or perspective.
Alice: Hey, did you hear that Joe is working on the Nader campaign?
Bob: Yeah, he really drank the Kool-Aid on that one.

Chris: I'm thinking about attending a PETA rally
Donna: Whatever you do, don't drink the Kool-Aid!

2. To completely buy into an idea or system, whether good or bad.
Coach Bellichick got his players to drink the kool-aid.

3. Going along with what a crowd desires. Often used when a person changes positions on a topic.
Dave got a haircut and a new suit. Looks like his company is making him drink the kool-aid.

I note that in my final job before retirement I was often accused of not drinking the kool-aid.

Peace.

Too big to fail

2008-11-24T00:01:00.000-08:00

Government unveils bold plan to rescue Citigroup
By JEANNINE AVERSA, AP Economics Writer
24 Nov 2008
WASHINGTON – The government unveiled a bold plan Sunday to rescue Citigroup, injecting a fresh $20 billion into the troubled firm as well as guaranteeing hundreds of billions of dollars in risky assets.

The action, announced jointly by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp., is aimed at shoring up a huge financial institution whose collapse would wreak havoc on the already crippled financial system and the U.S. economy.
...
The $20 billion cash injection by the Treasury Department will come from the $700 billion financial bailout package. The capital infusion follows an earlier one — of $25 billion — in Citigroup in which the government also received an ownership stake.

As part of the plan, Treasury and the FDIC will guarantee against the "possibility of unusually large losses" on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.

Forgive me if I don't get it.
The Big 3 automakers are begging for a $25Bn bridge loan, but Treasury is happy to guarantee losses up to $306Bn for Citi? In addition to a two-part $45Bn direct cash "infusion"???

Perhaps if the Big 3 downplayed their manufacturing role and positioned themselves simply as large financial institutions they'd have better luck.

What did Paulson do before W tapped him for Treasury?
Oh, yeah - he was a Wall Street financier (Goldman-Sachs)!
Guess it helps to have friends in high places.

Note: $25Bn + $20Bn + $306Bn = $351Bn... for Citigroup alone!!!
I thought Paulson was planning to leave $350Bn for Obama.
Oops!

For what it's worth: Milton Friedman was right. Markets DO self-correct. ... it's just that the self-correction can look an awful lot like an economic meltdown! ... no one said free-market capitalism was pretty.

A modest proposal: since we seem willing to provide a safety net to those institutions deemed "too big to fail", can we also impose regulations that will deliberately keep 'em from exploiting us during the "good times", once those return - little things like requirements for cash reserves might be nice. Yeah, I know - this would discourage investment.

Otherwise, next time... If you are not regulated, expect no charity - no matter how big you are.
Give 'em a choice: you don't want regulation? Okay. We allow you to fail. Really. No matter the impact.
You want a safety net? Okay. We get to define new rules for you.

Turns out, there are some conditions attendant to the rescue:

As a condition of the rescue, Citigroup is barred from paying quarterly dividends to shareholders of more than 1 cent a share for three years unless the company obtains consent from the three federal agencies. The bank is currently paying a dividend of 16 cents, halved from a 32-cent payout in the previous quarter. The agreement also places restrictions on executive compensation, including bonuses.

Importantly, the agreement calls on Citigroup to take steps to help distressed homeowners.

Well - it's a start... but I see nothing here suggesting any long-term regulation. Seems Citi'll be able to return to its profligate ways if they survive. Not the outcome I'd hope for.

If nothing else, it'd be nice to see a prohibition against lobbying Congress for the same 3 years as the dividend is restricted.

... and I almost forgot: $350Bn would support 7,000,000 median-income households for a year.

p.s. Now, explain to me again why Paulson can't see his way clear to using some of the $700Bn to provide a $25Bn bridge loan to the auto companies.

Robotic Complaint Generator

2008-11-20T14:14:00.000-08:00

A correspondent provides the following indictment of me, provided by the Robotic Complaint Generator referenced in the heading:

My complaint about Mr. Russ Sype
If you are one of the few who has never been presented with evidence that Mr. Russ Sype plans to instill distrust and thereby create a need for his demonic views, then be glad that the task to educate yourself has just become easy. With this letter, I compile all of the necessary evidence into one easy-to-read document. Let me cut to the chase: Just the other day, some of his contemptible faithfuls forced a prospectus into my hands as I walked past. The prospectus described Mr. Sype's blueprint for a world in which cocky, demented propagandists are free to boss others around. As I dropped the prospectus onto an overflowing wastebasket I reflected upon the way that Mr. Sype likes to imply that granting him complete control over our lives is as important as breathing air. This is what his solutions amount to although, of course, they're daubed over with the viscid slobber of disorganized drivel devised by his expositors and mindlessly multiplied by rotten, obdurate tightwads.

We mustn't be content to patch and darn, to piece and cobble at the worn and rotten fabric of Mr. Sype's blathering, dishonest reports. Instead we must fight on the battleground of ideas for our inalienable individual rights. Mr. Sype's most progressive idea is to bamboozle people into believing that everyone with a different set of beliefs from his is going to get a one-way ticket to Hell. If that sounds progressive to you, you must be facing the wrong way.

I see two problems with Mr. Sype's indiscretions on a very fundamental level. First, mankind, with all of its accumulated knowledge, wonderful machines, scientific methods, and material power, still has much to fear from prissy, judgmental libertines like him. And second, his fabulous success is not firmly connected with meritorious ability. That said, let me continue.

Mr. Sype loves getting up in front of people and telling them that jujuism is a wonderful thing. He then boasts about how he'll force us to bow down low before querulous tricksters in the blink of an eye. It's all part of the media spectacle that is Russ Sype. Of course, he soaks it up and wallows in it like a pig in mud. Speaking of pigs and mud, Mr. Sype is a small part of a large movement that seeks to egg on negative externalities in the form of evasion, collusion, and corruption. Now that's a strong conclusion to draw just from the evidence I've presented in this letter so let me corroborate it by saying that we should hinder the power of sophomoric deadheads like Mr. Sype. (Goodness knows, our elected officials aren't going to.) As another disquieting tidbit the following must be stated: Mr. Sype coins polysyllabic neologisms to make his strictures sound like they're actually important. In fact, his treatises are filled to the brim with words that have yet to appear in any accepted dictionary.

To most people, the idea that Mr. Sype lacks the dim flicker of sentience one needs to qualify as an imbecile is so endemic, so long ingrained, that when others conclude that his bromides are propaganda to the point of comedy and are so easily refuted as to render them useless even as such, this merely seems to be affirming an obvious truth. A central fault line runs through each of his inclinations. Specifically, even his lapdogs, who are legion, are afraid that he will advocate infantile philippics sooner than you think. I have seen their fear manifested over and over again and it is further evidence that I, not being one of the many asinine talebearers of this world, don't care what others say about Mr. Sype. He's still scabrous, snappish, and he intends to sound the standard "they're out to get us" call and rally his spin doctors to elevate his opinions to prominence as epistemological principles. When asked to mend his ways, Mr. Sype will give people a wink and a smile, but when the wheels begin to turn, it's business as usual.

Mr. Sype thinks that his way of life is correct and everyone else's isn't. However, his initiatives would be completely risible if they weren't so wild. It's easy for armchair philosophers to theorize about him and about hypothetical solutions to our Mr. Sype problem. It's an entirely more difficult matter, however, when one considers that the last time I heard him ramble on in his characteristically bibulous blather he said something about wanting to inspire a recrudescence of conniving fatuity. I feel sorry for the human race when I hear stuff like that.

As we all know, Mr. Sype hates me for my determination and my aggressive stance for what is right. I am not fooled by his belligerent and eristic rhetoric. I therefore gladly accept the responsibility of notifying others that if we complain about nutty lie-virtuosi then the sea of masochism, on which Mr. Sype so heavily relies, will begin to dry up. I was, however, going to forget about the whole thing when it suddenly occurred to me that he is not interested in what is true and what is false or in what is good and what is evil. In fact, those distinctions have no meaning to him whatsoever. The only thing that has any meaning to Mr. Sype is irreligionism. Why? That's not a rhetorical question. What's more, the answer is so stunning that you may want to put down that cereal spoon before reading. You see, you may have noticed that Mr. Sype's screeds are a spiritually destructive propaganda instrument aimed at our children. But you don't know the half of it. For starters, I believe I have found my calling. My calling is to maximize our individual potential for effectiveness and success in combatting Mr. Sype. And just let him try and stop me.

Mr. Sype says that truth is merely a social construct. This is noxious falsehood. The truth is that he presents one face to the public, a face that tells people what they want to hear. Then, in private, Mr. Sype devises new schemes to confuse, disorient, and disunify.

Consequently, if a cogent, logical argument entered Mr. Sype's brain, no doubt a concussion would result. Put simply, some day, in the far, far future, Mr. Sype will realize that his general prostration before expansionism confirms that the ineluctable outcome of Mr. Sype's adages is a world in which stolid gadflies conceal information and, occasionally, blatantly lie. This realization will sink in slowly but surely and will be accompanied by a comprehension of how he would have us believe that it's inappropriate to teach children right from wrong. Yeah, right. And I also suppose that Mr. Sype has mystical powers of divination and prophecy? The fact of the matter is that his premise (that his vices are the only true virtues) is his morality disguised as pretended neutrality. Mr. Sype uses this disguised morality to support his sound bites, thereby making his argument self-refuting. Even as I write those words I can feel Mr. Sype cringe. That's okay. Cringe. I don't care because if I have a bias, it is only against sinful guttersnipes who eroticize relations of dominance and subordination.

Well, sure; Mr. Sype is hampered by a load of contradictory and absurd assumptions of the school that he follows, but that doesn't change reality. He should do some research next time before printing half-truths and misinformation. Hence and therefore, Mr. Sype's admirers are hardly strangers to escapism. End of story. Actually, I should add that some people apparently believe that if we don't bother him, he won't bother us. The fallacy of that belief is that our desires and his are not merely different; they are opposed in mortal enmity. Mr. Sype wants to eavesdrop on all sorts of private conversations. We, in contrast, want to alert people that I am not predicting anything specific. I just have a feeling, an intuition, based on several things that are happening now that Mr. Sype will ignite a maelstrom of antagonism one day. That's all for this letter. For those that don't like my views, get over it. I allege that I have as much a right to my views, and to express them, as anyone else. So when I say that uppity tax cheats differ from each other only in the degree to which they create a regime of filthy feudalism, you can agree with me or not. That's all there is to it.

Have a nice day.

An interesting perspective...

2008-11-20T12:04:00.000-08:00

I just returned from lunch with former colleague (who is currently Caucasian).
Much of discussion focused on politics & recent election.
He confessed to voting Democratic for the first time ever.
His reason? - Not that he really preferred Obama, but that he thought it would be good for his son - a 2-yr-old - to grow up with an African-American president... in the interest of improving race-relations for future generations, moving the country forward in this respect.

(He also noted that during the last few weeks of the campaign, McCain was looking none-too-competent!... this perception may have made it easier to vote for Obama.)

Have a nice day.

p.s. Former colleague noted that we'll know we have achieved race-neutrality when African-American candidate gets same percent of African-American vote as s/he does overall.

We got another one!

2008-11-20T09:26:00.000-08:00

U.S. forces kill Qaeda leader wanted for attacks

Have our military leaders heard of the Hydra?

The Hydra had the body of a serpent and many heads (the number of heads deviates from five up to one hundred there are many versions but generally nine is accepted as standard), of which one could never be harmed by any weapon, and if any of the other heads were severed another would grow in its place (in some versions two would grow).
[Hydra, Encyclopedia Mythica]

I'd bet our military's estimate of the number of AQI leaders aligns well with mythology: between 5 and 100!... I've lost count of how many we've killed, but the total number seems not to have changed.

Why do we still brag about body-counts & "leaders" killed?
These indicators are lousy metrics of true progress.

Stop the madness!

the next time...

2008-11-19T21:38:00.001-08:00

The next time some Republican spouts off about Obama being Hitler/Stalin in black-face, please ask him or her directly about this:

Files show Md. police watched variety of activists
By BEN NUCKOLS, Associated Press Writer
Wed - Nov 19, 2008
BALTIMORE – Surveillance of anti-death penalty protesters and other activists by the Maryland State Police was broader and went on longer than previously disclosed, according to files that were turned over by police to dozens of activists who were improperly labeled as terrorists.

The files revealed that those labeled as terrorists included environmentalists, peace activists, animal rights activists and some people who have never participated in protests in Maryland.

"... those labeled as terrorists"!!!

... you might also want to remind him or her of the following:

Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

There is a name for a Government that asserts the right to spy on its own citizens:

Police State

... and it is this REPUBLICAN Administration under W that has delighted in asserting this right!

If folks want to scare you with the spectre of a police state, point out that their fear is legitimate... but it ain't Obama, it's W they oughta fear!!!

Stop the madness.

the other al Qaeda

2008-11-19T19:59:00.000-08:00

As you've doubtless heard, the other al Qaeda - the one led by Osama bin Laden that attacked the U.S. on 9/11 - is alive & well and living in Pakistan... and still issuing PR statements.

Today's PR statement from Ayman al-Zawahiri, the real second-in-command (as opposed to one of the several hundred 'second-in-command' folks that we've presumably killed), predictably attacks Prez-elect Obama, declares victory in Iraq (!), and promises continuing anti-U.S. jihad.

Recall - this is one of the guys W promised to get, "dead or alive"... seven (7) years ago!!!

I note that senior al Qaeda folks can release these communiques whenever they want - we don't have a clue where they are or how to get 'em.

John McCain promised that he knew how to get Osama - and suggested on Letterman that what he had in mind was an increased focus on "humint": human intelligence (vs, e.g., signal intelligence). Not a bad idea, but the "how" is a little lacking. Just exactly how did Candidate McCain envisage infiltrating al Qaeda's inner circle???

I've another suggestion... more a 'psy-ops' tactic, really.
Release audio & video communiques from 'al Qaeda' - featuring what for all the world sounds like bin Laden and Ayman al-Zawahiri.
Have the CIA 'authenticate' these messages.
Now the fun part: over some period of time, have these messages from Osama gradually morph from simple calls for jihad against the U.S. into much more extreme, heretical diatribes, with Osama claiming to be Allah's new Prophet.

The idea here is to compel the real Osama to respond... and to respond when we want him to - presumably when we are ready for him.
Be ready to back-track delivery of messages, starting with the courier who delivers the tape to al Jazeera.
Yes, it might take several such messages to discover a more-or-less complete trail back to Osama... but it seems at least plausible - IF we have an idea when a message will be delivered.

The point is to provoke Osama to respond in order to make an educated guess when a message might be delivered.

... and - the plus side - even if we're unable to back-track the delivery route, we will almost certainly accomplish two laudable goals:

1. Plant the seeds of doubt in the Muslim world regarding bin Laden's sanity.
(Mohammed is the final Prophet - for bin Laden to suggest that he is a "new" prophet is extreme heresy.)

2. Perhaps get bin Laden to show his hand - say, for example by increasing signal activity that NSA just might be able to trace.

If nothing else, more frequent communiques from us would dilute Osama's genuine message!

I'd bet a fair amount of $$$ that we have the technical capability to produce "authentic" tapes - both audio & video - of both bin Laden & al-Zawahiri.

Have a nice day.

Returning to my hobby...

2008-11-19T18:13:00.000-08:00

What with the election, the campaign, furious (?) blogging, and other distractions, I've been neglecting my hobby: collecting Gilbert&Sullivan-related Victorian trade cards.

I hit eBay last night for the first time in a couple of months, finding nothing - but the hunt is half the fun.

Anyway - assuming AQA has a fairly short life-expectancy - I'll need to find something else to consume time... and trade card collecting (with associated cataloging, filing, displaying) is harmless and fun.

Have a nice day.

A fun - perhaps relevant - bulletin-board saying

2008-11-18T14:54:00.000-08:00

"Now that we have lost sight of our mission, direction is no longer important.
It's speed that counts!"

"Choices under Uncertainty"

2008-11-18T14:37:00.000-08:00

That's part of the subtitle of my favorite book on decision analysis:

Decision Analysis:Introductory Lectures on Choices Under Uncertainty,
by Howard Raiffa

There are lots of books out there with similar titles.

What's more, these books are used in similarly-titled university courses - many of them taught at leading business schools! (Howard Raiffa taught at the Harvard Business School.)
You'd think that SecTreas Paulson & our MBA President would have been exposed to some of this stuff during their academic careers.

The techniques presented in these books and classes are well-known, intellectually robust, and effective.
(Yes, SecTreas Paulson, there are recipes to follow to help draft a playbook when "responding to turmoil we have never faced".)

Why is this fairly straight-forward technology not being used?

Stop the madness!

This sounds very familiar!

2008-11-18T14:08:00.000-08:00

From the same article noted below (Paulson Says U.S. Has Turned The Corner In Stabilizing Financial System):

"There is no playbook for responding to turmoil we have never faced," Paulson said in prepared remarks before the House Financial Services Committee.

This has an eerily familiar ring to it. Oh, yeah!

Administration fends off demands for war estimates
Monday, March 3, 2003
WASHINGTON (CNN) -- The number of U.S. troops that would be required to administer Iraq after a U.S.-led military campaign is "not knowable" because of the large number of variables in how a conflict might unfold, Secretary of Defense Donald Rumsfeld said Thursday.

He also said it "makes no sense to try" to come up with cost estimates for a war in Iraq because the variables "create a range that simply isn't useful."

"There is no playbook" - that pretty much sums up the planning for W's Iraq misadventure, too! - We don't know, so we can't plan. These guys are the best & the brightest???

Stop the madness!

p.s. ... and, SecTreas Paulson, not that it's my place to tell you your job, but: isn't it a reasonable expectation that your top priority over the past 2 months ought to have been drafting a playbook???
This calls to mind a time-worn biz adage: "If there’s no time to do it right the first time, when will you find the time to do things over?"

Uh-oh: now I'm really worried!

2008-11-18T14:01:00.000-08:00

Paulson Says U.S. Has Turned The Corner In Stabilizing Financial System

Somehow SecTreas Paulson's reassuring words are not reassuring.
The not-so-secret decryption algorithm to decipher the Administration's pronouncements: black = white, etc.
If these guys be fer it, I'm agin it!
If these guys like chocolate, I'll take vanilla, thank you.
Time to go to bed? Must be time to party like crazy!

On the bright side, if Paulson is testifying before Congress, he's not making any hare-brained decisions! Keep him tied up in Committee hearings for another 60 or so days, please.

Stop the madness.

Political nomads

2008-11-18T12:53:00.000-08:00

In the final few days of the campaign I took the opportunity to chat with many of the young staffers, who would soon be unemployed and headed out of town (few were New Mexicans).

All of these folks were in their early/mid-20s, and shared similar biographies. Most were Government/PolySci majors. All had worked on other campaigns before joining Heinrich for Congress. In almost all cases, they shared a nomadic lifestyle, moving from one campaign to another. Many of these campaign jobs were little more than whistle-stops, with employment lasting 2-6 weeks. They were all members of an informal network of young campaign workers who somehow learned of new opportunities quickly enough to remain personally solvent. Among the Heinrich for Congress crowd, they'd been doing this for between one and four years - wandering from campaign to campaign. Some had spent their short careers in a single speciality (e.g., finance, communications); others made it a point to work in full spectrum of campaign functions, even tho' this kept 'em forever at the bottom of the experience & payscale ladder. It was not uncommon to hear 'em recite a litany of half-a-dozen jobs held within a 3-6 month period. Most are now looking for their next campaign - with experience on a successful Congressional campaign to add to their resumes.

Most aspired to working on The Hill. Few admitted to aspirations for elected political office.

This is a young person's game - in many respects resembling professional sports (particularly professional baseball - where the players hop from one minor-league team to another, hoping at some point to get invited to "The Show").

A frequent career development path: volunteer -> unpaid intern -> paid intern -> staff -> senior staff.
Make connections along the way.

An interesting nomadic life.

This is why I stopped giving $$$ to DSCC

2008-11-18T12:45:00.000-08:00

McCain backer Lieberman keeps committee chair

Back in Dec 2007 I wrote my last check to the DSCC, for $2.71.
("2" is prime; "71" is prime; "271" is prime... and my bet is that it cost more to process the check than its face-value!... tho' DSCC did, in fact, cash it!)
With the check, I sent a note explaining that the current crop of so-called Democratic senators no longer merited my support, as time after time they caved to W on what I viewed as key issues.

We don't need simply more Democrats: we need better Democrats.
With any luck the newly elected freshman class will show more spine than their elders.

Have a nice day.

And now for something completely different...

2008-11-17T23:39:00.001-08:00

Long ago, in the dim mists of time, I was a statistics instructor at a large mid-western university.

One summer I taught a graduate stat class.
This was in 1988.
One of my students had paid to watch the Tyson-Spinks bout - a much-hyped contest. The pay-per-view charge was not cheap - too much for my modest means.

Noting the 1st round KO reported during the nightly news, I asked the student, "Was it worth it?"
"To see such an exhibition of power? YES!"

Last night on ESPN I finally got to see what he meant.
The ESPN "Boxing Classics" series featured that 1988 Tyson-Spinks bout.
It was over almost before it began.

I'm glad I didn't spend hard $$$ to see it "live" 20 years ago!

Going Marxist

2008-11-17T23:17:00.000-08:00

What are GM's liabilities?
Quickly read articles suggest somewhere in the neighborhood of $200Bn.

That's 4,000,000 households.

If GM went Chapter 7 bankrupt - liquidating everything - and got $0 for its assets, we'd be able to pay 4,000,000 households $50,000 for a year till they found other work for the $200Bn lost.

Does GM employ - directly or indirectly - 4,000,000 people???
I doubt it.

Some of those now-unemployed would be high-paid managers.
They can't make it for a year on $50,000?
The rest of us do it all the time!

Yes - this is just silly. But it helps put things in perspective.

Back to basics: Iraq

2008-11-17T22:37:00.000-08:00

McClatchy reports:

Iraq cabinet approves troop agreement with U.S.

Note the wording: "Iraq cabinet."

I call this out only because other news sources reported the same story as:

Iraqi troop accord reached
or
Iraq's government approves security pact with US

Now, in parliamentary systems, "the government" and "the cabinet" are interchangeable...

... but not so in the U.S.
When U.S. citizens read in their newspapers, "Iraq's government approves security pact with US", they think, "Ah - this is a done deal!"

Not so.
The Iraqi Parliament has yet to approve it, which is now required.
Yes - the cabinet agreed to it (it helped that Sen. Obama is now President-elect Obama), but it is NOT a done deal!

Okay - there are a number of riffs to be played on this theme.
I'll focus on two.

1. The SOFA approved by Iraq's cabinet faces serious opposition from Shi'ites... particularly from our creation, Moqtada al-Sadr: Hardline Iraqi cleric bids to kill US pact in parliament.

2. The wording of the pact approved by the cabinet calls for complete withdrawal of American troops by the end of 2011.
W sees it differently:

Press Briefing by Press Secretary Dana Perino
MS. PERINO: As we've been saying since July, when we said that we would work with the Iraqis to establish a date that we would aspire to...

... One of the points that we conceded was that we would establish these aspirational dates.

The negotiated SOFA sets a date. W views this as only "aspirational".

More to follow.

Just for fun: $700Bn & the unemployed

2008-11-17T22:08:00.000-08:00

The latest U.S. Labor Dept stats suggest the current unemployment rate is 6.5%, representing 10.08Mn workers.

Expert forecasters (*: implied caveat!) suggest unemployment rate will peak at 7.5% in 2009, which would represent 11.63Mn workers.

That $700Bn rescue package passed in Sep?
That would provide an annual income of $50,000 to 14Mn households.
$50,000 is just slightly higher that the median household income.

I note that 14Mn exceeds 11.63Mn.
Yep - for $700Bn we could support ALL the unemployed for a year (and this is based on a conservative assumption that each one of the "unemployed" represents a single, unique household!)
Would this support provide sufficient stimulus to get the economy back on its feet?
We'll never know.

Have a nice day.

p.s. We could support those 11.63Mn workers with a median household income of $50,000 for only $582Bn!... something less than the $700Bn currently allocated to rescue the financial sector.

Heresy

2008-11-17T21:42:00.001-08:00

My ultra-conservative friend (whom I've mentioned several time before) and I share a common view on exactly one topic: gas tax.

Both of us believe that if the U.S. is to be seriously committed to "energy independence", a stiff tax-at-the-pump on gasoline is required.

We've recently experienced the effect of high prices: demand goes down!
(Somehow this shouldn't be a surprise, but it is.)

How to reduce demand? Increase the price.

Yes, this is a horribly regressive tax.
BUT: it has a desired effect!... Well, actually two (2) desired effects:

1. Reduces demand for gasoline
2. Increases government revenue

Please don't hate me!

Artificially make gas cost $5/gal. The difference between $5/gal and market price is pure "profit" to the government.
I note that Europeans have been living with something more than this for years - and somehow they've managed to survive with better overall societal health than us!
(I note that the U.S. lags the European Union in infant mortality on both the CIA World Factbook and U.N. Population Division rankings.)

On this issue at least, I am a progressive heretic.

this, that, and t'other

2008-11-17T20:49:00.000-08:00

Do I know how to solve the current economic problems facing us?
No.

That ignorance will not stop me from opining.

First, a book recommendation:

Paper Money, by Adam Smith
[no - not THAT Adam Smith!]

This volume is almost 30 years old, but speaks to today. A quotation:

"We are going to sell America for a product that burns up in the atmosphere."

... speaking, of course, of oil.

Bailout vs Chapter 11 Bankruptcy?
There are a few easy decision rules in the world. My favorite is:

Can't hurt.
Might help.
Costs nothing.
DO IT!

The "bailout vs bankruptcy" dilemma does not fit this paradigm.
BUT: there is another fairly easy decision rule available when faced with an "either/or" decision: do both!
Structure a bailout as if it were a Chapter 11 Bankruptcy.
Honor creditors, but insist on

1. Restructuring
2. New management

GM (as a convenient example) has a good deal of valuable physical infrastructure and intellectual property - simply liquidating these assets may not be the best option. How 'bout we structure a bailout to look like a Chapter 11 bankruptcy?
Equity holders get the shaft (sorry).
GM emerges leaner & meaner - and, with any luck, competitive.

Had the same tactic been adopted with the financials, we'd not be learning that AIG continues to hold executive retreats. We'd not be learning that institutions receiving OUR $$$ continue to pay dividends to shareholders.

New management? As has been pointed out by others, it seems just a little absurd that Secretary of the Treasury Paulson - formerly of Goldman, Sachs - is in charge of the rescue. The folks that got us into this mess with their deification of the "free market" are the same folks now tasked with solving the problem!

This last observation is at the heart of a previous post: let's wait for Team Obama to take the field.
Can we afford to wait?
Can we afford NOT to wait?

This, that, and t'other: Why do firms in dire straits always pay retention bonuses to high-ranking executives? Enron did this. The big finance folks are doing it now.
The argument seems to be something like, "These folks are the best and the brightest. They know the business. We need their expertise."
... no one ever seems to ask the obvious question: "Aren't these best-and-brightest the same folks that got you INTO this mess?"

Many cogent arguments have been advanced against Thomas Kuhn's thesis that new science advances only with new generations of scientists. His paradigm fits some Scientific Revolutions particularly well, but does not fit all cases. (The Structure of Scientific Revolutions, Thomas Kuhn, Third Edition, 1996.)

I'm betting that resolving the current economic crisis does require the infusion of new blood - the next generation of economic wizards. The last generation, led by Milton Friedman, didn't do such a great job. Let's give the neo-Keynesians a shot.

If nothing else, the Reaganite supply-siders & free-marketers have been entirely discredited.
Even the deified Greenspan has admitted that his faith in market "self-regulation" has been undermined.

Why has oil dropped more than 50% in less than half a year?
Drop in demand.
The magicians of Wall Street with all their financial legerdemain couldn't keep the price of oil up forever based on supply.
OPEC is struggling to control oil prices based on supply.
It ain't working.

Free advice to Dems (worth every penny!): whenever one of your opponents mentions "free market" or "self-regulation", break into an uncontrollable, hysterical laugh... make sure that the laughter is directed pointedly at your respected opponent for uttering such nonsense syllables.

Have a nice day.

More forecasts!

2008-11-17T18:00:00.000-08:00

Forecasters: U.S. in 14 month recession

Regular readers ought know my opinion of expert forecasters - I once was among 'em!
Whence 14 months? My bet is heavy on fairly brain-dead analysis of past biz cycles, perhaps augmented by less-than-deep analysis of "fundamentals"... Tho' even back-of-the-envelope calculation would suggest that current mess is an "upper tail" event: guessing relatively long duration takes little imagination.

It takes a bit of calculus to do this - but only a bit.
Again: these guys ain't any smarter than us... they just have $$$.

p.s. On the bright side - supposing 14 months to be semi-accurate, this fits well with a tried-and-true "performance evaluation" strategy: start fires in odd quarters, put 'em out in even quarters.
This strategy ensures that semi-annual "performance reviews" will provide the opportunity to brag about putting out fires!
In Prez-elect Obama's case, an economic recovery beginning just over a year from now will give him lots of brownie points for the 2012 election...
It'll also help Senate & Congressional Dems in 2010!

What I learned today...

2008-11-17T14:24:00.000-08:00

... well, in fact this lesson has been slowly seeping into my thick skull for the past several days:

Successful Congressional campaigns don't end!

They become permanent campaigns for re-election.

So-o-o... I've been handed two new folders of "database updates needed"!

It's just as well - I wasn't dealing well with the cold-turkey withdrawal from the campaign.

"Happy Days are Here Again!"

2008-11-16T21:48:00.000-08:00

Oil falls below $56 as Japan slips into recession

My single greatest fear at the moment is that the 110th Congress will rush to pass some hare-brained new "rescue" package.
I've no principled objection to Government spending as a valid response to current mess... it's the verb "rush" that terrifies me.
They tried this about two months ago. Other than committing a ton of $$$ ("ton" = $700Bn), that effort accomplished nothing.
Let's not be too hasty to get another costly, ineffective package passed.

Have a nice day.

Oh, this is interesting!

2008-11-16T17:08:00.000-08:00

Afghanistan offers Taliban chief safe conduct
President Karzai promises security if Taliban leader agrees to peace talks
Associated Press
Sun., Nov. 16, 2008
KABUL, Afghanistan - Afghan President Hamid Karzai offered Sunday to provide security for the Taliban's reclusive leader if he agrees to enter peace talks, and suggested that the U.S. and other Western nations could leave the country or oust him if they disagree.
...
"If I say I want protection for Mullah Omar, the international community has two choices, remove me or leave if they disagree," Karzai said in an hourlong news conference in Kabul.

Recall:

"THE PRESIDENT: They will try to hide, they will try to avoid the United States and our allies - but we're not going to let them. They run to the hills; they find holes to get in. And we will do whatever it takes to smoke them out and get them running, and we'll get them."
[President Urges Readiness and Patience, Remarks by the President, Secretary of State Colin Powell and Attorney General John Ashcroft; Camp David; Thurmont, Maryland; 15 Sep 2001]

... followed by:

[Mullah] Omar: I am considering two promises. One is the promise of God, the other is that of Bush. The promise of God is that my land is vast. If you start a journey on God's path, you can reside anywhere on this earth and will be protected... The promise of Bush is that there is no place on earth where you can hide that I cannot find you. We will see which one of these two promises is fulfilled."
[Mullah Omar - in his own words, The Guardian, Wednesday September 26 2001]

Looks like Karzai is casting his lot with Mullah Omar.

What will W do?
I'm inclined to add, "Who cares?"... but W does have 60+ days left!
... and, recall:

"... And we will pursue nations that provide aid or safe haven to terrorism. Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists. (Applause.) From this day forward, any nation that continues to harbor or support terrorism will be regarded by the United States as a hostile regime."
[President George W. Bush, Address to a Joint Session of Congress and the American People, 20 Sep 2001]

Will W conclude that Afghan President Karzai has aligned himself with terrorists?

64 Days!

Just out of curiosity...

2008-11-16T00:20:00.000-08:00

Wildfires in LA reduce hundreds of homes to ash

So, just out of curiosity:

Will the so-called "religious right" declare that G-d is punishing California for passing Prop 8?

No, I'm not holding my breath.

... but I'm pretty sure they'd have interpreted the fires as G-d's wrath if Prop 8 had been defeated!

Pay-back or Good Government: a personal dilemma

2008-11-14T20:38:00.001-08:00

More news today regarding the politicization of DoJ:

New documents show improper conduct, possible jury tampering in Siegelman prosecution.
New documents obtained by TIME magazine show that a U.S. Attorney who recused herself from the prosecution of former Gov. Don Siegelman (D-AL) continued to be actively involved in the case, e-mailing advice to subordinates who were still involved in the prosecution. The documents, provided by DOJ whistleblower Tamarah Grimes, also show “extensive and unusual contact between the prosecution and the jury”:
A key prosecution e-mail describes how jurors repeatedly contacted the government’s legal team during the trial to express, among other things, one juror’s romantic interest in a member of the prosecution team. “The jurors kept sending out messages” via U.S. marshals, the e-mail says, identifying a particular juror as “very interested” in a person who had sat at the prosecution table in court. The same juror was later described reaching out to members of the prosecution team for personal advice about her career and educational plans. […]

Further undisclosed evidence of prosecution team members speaking with jurors following the verdict emerges in Grimes’ written statement to the DoJ. In it, she says a member of the team prosecuting Siegelman had spoken with a juror suspected of improper conduct — apparently at the time the judge was due to question the juror about that conduct. Grimes quotes the lead prosecutor in the case as saying someone had “talked to her. She is just scared and afraid she is going to get in trouble.”
The U.S. Attorney, Leura G. Canary, had recused herself from the case because her husband was a “top GOP operative and close associate of Bush adviser Karl Rove,” who has been accused of orchestrating a political prosecution of Siegelman.
[Artcile lifted in its entirety from Think Progress]

My dilemma?

In saner moments I look forward to the grown-ups taking up the reins of Government, restoring the Constitution as the Law of the Land, and putting policy above politics.

At other times I think, "Hey - W and his minions showed us how it's done. Let's do it to them!" I dream of DoJ pursuing RICO indictments against the RNC and its satellite state parties. I relish the thought of President Obama issuing an Executive Order declaring W and Cheney "enemy combatants" and locking 'em up in a Navy brig for years with no legal recourse. Heck, while he's at it, President Obama could declare Blackwater, KBR, Parsons & Halliburton "sponsors of terrorism" and seize all their assets - payable directly to U.S. Treasury. ("Sponsors of terrorism"??? Sure, why not? USE that expanded "Commander-in-Chief" authority that W labored so diligently to create!)

I'm sort of hoping my saner side wins the argument... but my vindictive alter-ego is still a fun companion.

Can we wait?

2008-11-13T14:08:00.000-08:00

A couple of items suggest maybe we oughta wait till Team Obama takes the field to deal with economic mess.

Today's NYT reports:

U.S. Shifts Focus in Credit Bailout to the Consumer
By EDMUND L. ANDREWS
Published: November 12, 2008
WASHINGTON — The Treasury Department on Wednesday officially abandoned the original strategy behind its $700 billion effort to rescue the financial system, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers.

Meanwhile, we have this encouraging news:

Bush: Economic crisis not a failure of free market
By BEN FELLER, Associated Press Writer
13 Nov 2008
NEW YORK – President George W. Bush asserted Thursday that the global financial crisis is "not a failure of the free market" and urged world leaders to adopt modest financial reforms that stop short of the tighter regulations Europeans favor.

"Our aim should not be more government. It should be smarter government," Bush said during a speech in New York, a day before about two dozen world leaders converge on Washington for a weekend summit he is hosting.

In fact, I agree with W: we need smarter government. Let's wait a couple months to get it!

When the bailout package was rushed through Congress in September, W and his minions assured us that

1. If the bailout wasn't approved immediately the world would come to an end.
2. They knew what they were doing.

Two months later Paulson & the rest of W's minions admit that, gee, it didn't work.

I'll note that in addition to, "Gee, it didn't work", the world has NOT come to an end.

Now we have the brilliant W pronouncing that the problem is "not a failure of the free market".
How can these guys be expected to fix the problem if they don't understand it???

The world will not come to an end in two months.
Some big ("too big to fail") companies may be forced into bankruptcy.
BUT - we'll have a smarter government in place to deal with the fallout!

Let's put the brakes on bailouts for the next two months. These guys are making it up as the they go - not the best way to manage $700Bn of tax-payer money!

Stop the madness.

Our MBA President at work

2008-11-13T11:19:00.000-08:00

Bailout Lacks Oversight Despite Billions Pledged
Watchdog Panel Is Empty; Report Is Unfinished
By Amit R. Paley
Washington Post Staff Writer
Thursday, November 13, 2008
In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.
...
Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

Did we really expect W and his minions to manage this massive program effectively?
For W and his minions, "oversight" is a dirty word, implying needless Government involvement in what ought to be a ... wait!
This is a Government program!!!
... hmmm. I guess "oversight" just means someone is watching W and his minions to make sure We the People are getting a fair shake. Okay - that would explain why W is loathe to do it!

Stop the madness!!!

Missile Defense. Two words: Maginot Line

2008-11-12T23:42:00.000-08:00

US general urges Obama to keep missile defense

Okay, it helps to note that the U.S. general in question is the guy "who runs the Pentagon's missile defense projects".

Assuming - for the sake of argument - that the missile defense system works like a charm (note: this is a huge assumption. In the lastest "test" the Navy shot down only one of two missiles!)... So what?

The Maginot Line worked like a charm!
The Germans never broached it!
They went around!

How were we attacked on 9/11? Commercial airliners.
Would a 100% functioning missile defense system have protected us?
No.

A primitive cruise missile (e.g., a WWII vintage V-1 missile powered by a ramjet engine) launched from a cargo ship off the coast of California or New Jersey could deliver a nuke more effectively than currently non-existent ballistic missiles from Iran or North Korea.

Assuming - again a HUGE assumption - the system worked perfectly, it provides close to 0 protection from attack, at huge cost!
The bad guys can just go around (see, e.g., German invasion of France in WWII).
Maginot Lines DON'T WORK!!!

To quote my favorite military philosopher (perhaps not too accurately - the quotation is lifted from the movie, Patton):

"Fixed fortifications are monuments to the stupidity of man. If anything made by God can be overcome, anything made by man can be overcome."

W's vaunted missile-defense system is simply a high-tech "fixed fortification".

Again, it is helpful to note that the General urging Obama to keep the missile-defense system is the guy in charge of the program!

Stop the madness!!!

A question for Rep. Broun (R-GA)

2008-11-12T23:12:00.000-08:00

Recently Rep. Paul Broun (R-GA) made news:

"It may sound a bit crazy and off base, but the thing is, he's the one who proposed this national security force," Rep. Paul Broun said of Obama in an interview Monday with The Associated Press. "I'm just trying to bring attention to the fact that we may - may not, I hope not - but we may have a problem with that type of philosophy of radical socialism or Marxism."

Broun cited a July speech by Obama that has circulated on the Internet in which the then-Democratic presidential candidate called for a civilian force to take some of the national security burden off the military.

"That's exactly what Hitler did in Nazi Germany and it's exactly what the Soviet Union did," Broun said. "When he's proposing to have a national security force that's answering to him, that is as strong as the U.S. military, he's showing me signs of being Marxist."

My question for Congressman Broun:

Where were you and where was your outrage when W and his minions proposed the TIPS (Terrorism Information and Prevention System) program?
Operation TIPS, where the last part is an acronym for the Terrorism Information and Prevention System, was a failed program designed by President George W. Bush to have United States citizens report suspicious activity.
[Wikipedia entry, Operation TIPS]
Where were you and where was your outrage when W's Administration successfully coerced telecom companies into tapping U.S. citizens' phones without warrants?

Where were you and where was your outrage when the so-called Patriot Act authorized National Security Letters in lieu of warrants to obtain information about the activities of U.S. citizens?

Where were you and where was your outrage when MY Government asserted that the Fourth Amendment was a "quaint, historical document"???

There is a name for a nation that asserts the unlimited right to spy on its citizens:

Police State!

And - W's Administration, abetted by Rep. Broun and his Republican colleagues in Congress, are the folks who threaten our liberty!

Stop the madness!!!

Alternatives to bailouts

2008-11-12T21:50:00.000-08:00

Again, I can draw an implausible inference that folks-in-the-know are reading AQA.
A few posts back I suggested:

I'd really like to see a serious cost/benefit analysis from someone...
What's the likely total cost to "rescue" GM?
Can GM honestly be rescued?
What is the cost of GM failure?

Today's NYT has article suggesting similar point of view:

G.M.’s Troubles Stir Question of Bankruptcy vs. a Bailout
By MICHELINE MAYNARD
Published: November 12, 2008
DETROIT — Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.

Yes - there are alternatives to bailouts... Yes, bankruptcy would be painful... BUT: what are the relative risks involved?

If a bailout simply postpones the inevitable ("Can GM honestly be rescued?"), getting the worst over with quickly might be the cost-effective path to take.

Atrios over at Eschaton raises similar issues:

"I don't know for sure that just letting GM filing for bankruptcy is the best route, but if it isn't then it just means there's something wrong with our bankruptcy laws and/or our dealings with "too big to fail" companies.
...
The system needs to have standard ways of dealing with these things. If the ones in place don't work, we need new ones, not free money for failures."

I note that Atrios is one of the folks who anticipated the current crisis many many moons ago, for over a year referring to mortgage-backed securities as "big shitpile".

Have a nice day.

My latest email to Sen. Jeff Bingaman (D-NM)

2008-11-12T21:27:00.000-08:00

Do our elected representatives understand the current economic mess well enough to draft effective legislation to deal with it?
I doubt it.

This thought inspired my most recent email to New Mexico's senior Senator:

Senator Bingaman:
Before the Senate votes on the next bail-out package, would you and your Democratic colleagues be willing to invest an afternoon to become better informed regarding business, finance, and economics?

No, I'm not selling anything. I am one of your New Mexico constituents whose knowledge of business, finance, and economics can be written in big block letters on a postage stamp.

But, there are knowledgeable people out there.
One such fellow, William A. (Bill) Ackman, was on Charlie Rose today, speaking in very simple terms about the current economic and financial crisis.
Mr. Ackman is the Harvard-educated CEO of Pershing Square Capital Management, L.P.

I note that AIG executives are still taking retreats on the tax-payer's dime.
Most large businesses require annual training for their employees - including senior executives.
I suggest only that the Senate Democratic Caucus follow this example and schedule an off-site training session with Mr. Ackman or some other well-qualified expert. I suspect a 4-hour short course presented by Mr. Ackman would help you deal with the current economic crisis as effectively and efficiently as possible.

Mr. Ackman can be reached at Pershing Square Capital Management:
Phone: 212-813-3700
Fax: 212-419-2341
Corporate headquarters:
888 Seventh Avenue
New York, New York 10019
I've no idea if Mr. Ackman would be willing to provide a 4-hour short-course for the Senate Democratic Caucus, but he did take the time to prepare a brief presentation for Secretary of Treasury Paulson (delivered electronically), so he just might be interested in helping members of Congress better understand the current crisis and his views on how to resolve it.

This is a serious suggestion!

If not Mr. Ackman, please - get a quick tutorial from somebody!

Have a nice day.

Back at the campaign (???)

2008-11-12T15:16:00.000-08:00

... but... But... the election is over!

True enough... but there is one final mailing: 'thank you' letters to all supporters!

In prep for this I spent several hours cleaning bad addresses and merging duplicate records.

Yesterday & today: the fruit of my labor - the FINAL mailing!
Hooray!!!

An interesting suggestion

2008-11-11T21:17:00.000-08:00

One of my correspondents writes:

......instead of the Washington boys giving away our money to GM and other big boys.....why not give, let's say, ten thousand dollars. To every American household with the stipulation that the money must be spent on durable American products within a 12 month period, and proof of purchase must be supplied to the IRS at tax time. Any money not spent has to be returned to the IRS along with your tax obligation. I'm sure this sort of plan would cost less, give the people who own the money use of it, and promote American industries that need the input of dollars to keep the economy going.

Note: the current $700Bn package would provide $10,000 to 70,000,000 households. (The Census Bureau's Current Population Survey reports about 117,000,000 households in 2007. 70,000,000 is about 60% of 'em.)

If you like the idea, my correspondent had a couple of suggestions:

1. Pass this idea along to all the folks on your email list and see what happens.
2. Send it to Washington too.

It's very rewarding - at least on a personal level - to write a letter to your Congressman and your Senators.

Have a nice day.

a fun forecasting quotation

2008-11-11T21:14:00.000-08:00

The following quotation is poorly attested, but fun:

"Prediction is very difficult, especially about the future."
[attributed variously to Niels Bohr - Nobel Prize-winning physicist... or to Yogi Berra, NY Yankees catcher!]

Martingales

2008-11-11T13:06:00.000-08:00

Semi-technical definition:

In probability theory, a martingale is a stochastic process (i.e., a sequence of random variables) such that the conditional expected value of an observation at some time t, given all the observations up to some earlier time s, is equal to the observation at that earlier time s.
[Wikipedia, ]

A martingale forecasting model is very simple: Tomorrow will look like today.

What brings this to mind is this headline:

U.S. economy expected to contract in 2009

The article notes that, "The U.S. economy is expected to shrink 0.4% in 2009 compared with 2008, according to the monthly survey of 49 economists published Monday by Blue Chip Economic Indicators."

Yep - the economy went down yesterday, so the forecast is that it'll go down tomorrow.

Recall last spring and early summer, when oil was headed upwards of $140/bbl, the economic sages were suggesting that it could go as high as $200/bbl. (It's currently hovering around the low $60s/bbl.)

Numerous academic studies over the past 30+ years confirm that the best guess for tomorrow's stock price is today's stock price.

All economic forecasting based on anything more sophisticated than reading tea leaves or asking grandma is based on the assumption that "the future will look like the past." The differences between the myriad models out there is just which aspects of the past will be repeated, and just what constitutes the relevant past.

Recent economic projections (say, those made over the past year or so) all seem to suggest that "rate of change" is the dimension of past behavior most favored by forecasters, and that "yesterday" is the relevant past. That is, many - if not most - of the forecasts that have made the news in the past year seem to be based on a pretty simple model: the best guess for how tomorrow will look is based on assuming that the rate-of-change from today-to-tomorrow will be the same as the rate-of-change from yesterday-to-today. A martingale on rates-of-change.

Readers may notice a flaw in this methodology: it cannot predict a change in direction. As it turns out, there just aren't any good models in use that do a decent job guessing when 'up' will turn to 'down' or vice versa.
[Aside: a none-too-sophisticated analysis of recession frequency since WWII led me to predict (as part of my job as a forecaster) in Dec 2006 that there was better than an 80% chance of recession before 2010. When would it start? My none-too-sophisticated model didn't provide a guess.]

I believe I have just equipped my readers to forecast the economy at least as accurately as many of the high-paid economic gurus: tomorrow will look like today!

Aside: martingale forecasting is a purely statistical procedure, which takes into account nothing about economic 'fundamentals'. Economists like Krugman did a pretty good job suggesting more than a year ago that 'up' would soon turn to 'down' based on an analysis of these fundamentals.

... but most folks are happy to let their computer models do the thinking. And academic research over the past 30 years continues to affirm that, if you're letting your computer models do the work, the best model around is also the simplest: tomorrow will look like today.

Have a nice day.

Kenny Rogers: political philsopher

2008-11-10T16:27:00.000-08:00

My turn to join in the ever-expanding chorus of folks offering President-elect Obama advice.
My advice isn't related to policy, but to process.

Kenny Rogers had some good advice:

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
[Kenny Rogers, The Gambler]

I've in mind a few specific situations requiring this counsel:

foreign policy
Iraq
Afghanistan
Bailout
AIG
General Motors

Focusing on the economic/bailout cases: what informs the decision? (Hold 'em, fold 'em, walk away, run?)

I'd really like to see a serious cost/benefit analysis from someone - GAO, CBO? (Independent analysis preferred!)
We're already seeing that the original bailout of AIG has failed - even tho' it was deemed more than sufficient at the time.
How much more is likely to be needed to keep AIG afloat?
Will any amount be sufficient?
What would be the effect of AIG failure? (I note that we have a smaller case-study available: Lehman. The world did not come to an end; the market really did quickly manage to value Lehman's assets.)

Same analysis for GM: What's the likely total cost to "rescue" GM?
Can GM honestly be rescued?
What is the cost of GM failure?

One component of "cost of rescue" is opportunity loss: What else could be done with the $$$?
Would the proposed $$$ be better spent mitigating the effects of failure?

If I start quoting Hank Williams, it's probably time to stop reading AQA.

AIG: Deja vu all over again

2008-11-10T12:03:00.000-08:00

Today:

Government provides record aid package to AIG
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer
10 Nov 2008
WASHINGTON – In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership.

The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company.

Was there warning?

Yes (but you'd never know it from reading the article):

Concerns rise as AIG blows through 70% of government cash
No asset sales yet, so insurer continues to tap securities lending facility; ‘you’ve got to draw the line’
By Beth Braverman
Financial Week
October 24, 2008
American International Group tapped its securities lending facility with the New York Fed this week for another $7 billion, but it did not draw down any more of the $85 billion bridge loan it received in September, also from the New York Fed.

As of Thursday, AIG had borrowed $72 billion under the bridge loan (that amount has remained constant since Oct. 9), $18 billion under its securities lending facility and $300 million in capitalized interest, according to company spokesman Peter Tulupman. In total, the company had tapped more than 70% of its available credit.

This sounds eerily familiar.

Recall (long distant past): November 2001. As part of a proposed deal to acquire Enron, Dynergy injects $1.5Bn into Enron. Shortly thereafter Enron - at the SEC's insistence - publishes 10-Q quarterly report. The report reveals that:

Enron has blown through the $1.5Bn, and can't say how;
Enron revealed it would have ~$2Bn payment due by end of year;
Enron is technically insolvent: immediate obligations ~ $2.8Bn; $1.2Bn cash on hand.
[Details derived from Kurt Echenwald's Conspiracy of Fools.]

Only the scale is different... vastly different. $1.5Bn (Enron) vs $90Bn (AIG).

The need for re-doing the AIG deal is never really made clear in the article, other than to say that interest payments on the Govt loan were depleting all AIG's cash. Where'd the principal go?

This doesn't sound promising.

Maybe they're reading AQA!

2008-11-10T09:16:00.000-08:00

Pentagon board says cuts essential
Tells Obama to slash large weapons programs
By Bryan Bender
[Boston] Globe Staff / November 10, 2008
WASHINGTON - A senior Pentagon advisory group, in a series of bluntly worded briefings, is warning President-elect Barack Obama that the Defense Department's current budget is "not sustainable," and he must scale back or eliminate some of the military's most prized weapons programs.

The briefings were prepared by the Defense Business Board, an internal management oversight body. It contends that the nation's recent financial crisis makes it imperative that the Pentagon and Congress slash some of the nation's most costly and troubled weapons to ensure they can finance the military's most pressing priorities.

Those include rebuilding ground forces battered by multiple tours to Iraq and Afghanistan and expanding the ranks to wage the war on terrorism.

Wow! AQA regulars will recognize in these proposals many elements I've championed previously, as I've railed against the Pentagon's addiction to high-tech weapons systems at the expense of boots on the ground & basic support for troops.

Of course, any attempt to impose sanity on our Defense budget will be met with cries of "weak-on-national-defense" from the so-called loyal opposition. Obama will need to market this carefully.

... which brings us to a larger point:
The Dems need to communicate better than they have in the past to counter easily anticipated Republican rage. This applies not only to defense spending, but to a wide range of policy issues.

The Republicans have successfully used the "tax-and-spend liberal" tag for decades without having to worry that the Dems will formulate a consistent convincing retort.

Republicans have succeeded in making "liberal" a dirty word.

Any mention of cutting Defense spending will almost certainly meet with "weak on national security" accusations.

Me? I'm drafting a brief proposal for my Congressman-elect, suggesting that the 110th Congress freshman class could make a name for itself by drafting a clear set of principles & policies to help sell the progressive agenda - and to counter the easily anticipated Republicans attacks on any such agenda.

Have a nice day.

As we near the season of "Goodwill toward men"

2008-11-09T10:01:00.000-08:00

You could make this stuff up, but there's no need:

Monks brawl at Christian holy site in Jerusalem
By MATTI FRIEDMAN, Associated Press Writer
9 Nov 2008
JERUSALEM – Israeli police rushed into one of Christianity's holiest churches Sunday and arrested two clergyman after an argument between monks erupted into a brawl next to the site of Jesus' tomb.

The clash between Armenian and Greek Orthodox monks broke out in the Church of the Holy Sepulcher, revered as the site of Jesus' crucifixion, burial and resurrection.

This is not a unique event at the Church of the Holy Sepulcher.

Since the renovation of 1555, control of the church oscillated between the Franciscans and the Orthodox, depending on which community could obtain a favorable firman from the Sublime Porte at a particular time, often through outright bribery, and violent clashes were not uncommon. In 1767, weary of the squabbling, the Porte issued a firman that divided the church among the claimants. This was confirmed in 1852 with another firman that made the arrangement permanent, establishing a status quo of territorial division among the communities.

The primary custodians are the Eastern Orthodox, Armenian Apostolic, and Roman Catholic Churches, with the Greek Orthodox Church having the lion's share. In the 19th century, the Coptic Orthodox, the Ethiopian Orthodox and the Syriac Orthodox acquired lesser responsibilities, which include shrines and other structures within and around the building. Times and places of worship for each community are strictly regulated in common areas.

Establishment of the status quo did not halt the violence, which continues to break out every so often even in modern times. On a hot summer day in 2002, the Coptic monk who is stationed on the roof to express Coptic claims to the Ethiopian territory there moved his chair from its agreed spot into the shade. This was interpreted as a hostile move by the Ethiopians, and eleven were hospitalized after the resulting fracas.

In another incident in 2004 during Orthodox celebrations of the Exaltation of the Holy Cross, a door to the Franciscan chapel was left open. This was taken as a sign of disrespect by the Orthodox and a fistfight broke out. Some people were arrested, but no one was seriously injured.

On Palm Sunday, in April 2008, a brawl broke out due to a Greek monk being ejected from the building by a rival faction. Police were called to the scene but were also attacked by the enraged brawlers. [13] In November 2008, a clash erupted between Armenian and Greek Orthodox monks.

Under the status quo, no part of what is designated as common territory may be so much as rearranged without consent from all communities. This often leads to the neglect of badly needed repairs when the communities cannot come to an agreement among themselves about the final shape of a project. Just such a disagreement has delayed the renovation of the edicule, where the need is now dire, but also where any change in the structure might result in a change to the status quo disagreeable to one or more of the communities.
[Wikipedia article, Church of the Holy Sepulchre]

It's not clear to me how the West hopes to achieve mutual tolerance among Christians, Jews, and Muslims when various flavors of Christians cannot jointly govern what they believe to be one of the most sacred Christian sites.

Have a nice day.

No, I'm not alone

2008-11-08T22:02:00.000-08:00

A few posts ago I noted that, tho' I enjoy reading all the dirt on Gov. Palin, I question the self-preservation instincts of the folks peddling the stories. By peddling all this fun stuff, the peddlers are indicting themselves: they picked her!

Someone else noticed: CNN's Campbell Brown, on her No Bias, No Bull show:

You are the ones who supposedly vetted her, and then told the American people she was qualified for the job. You are the ones who after meeting her a couple of times, told us she was ready to be just one heartbeat away from the Presidency. If even half of what you say NOW is true, then boy, did you try to sell the American people a bill of goods. If Sarah Palin is the reason some voters chose Barack Obama, that is no one's fault but your own. John McCain, as he so graciously said himself the other night, lost this election. He lost it with your help, your advice, your guidance, and yes, your running mate recommendations. And that is crystal clear to everyone, no matter how hard you try to blame Sarah Palin or anyone else.

It's so nice to see my views validated by an independent third-party.

Have a nice day.

Ted Rall's good idea (again!)

2008-11-08T21:05:00.000-08:00

In light of W's latest brilliance - restricting outpatient Medicaid services - it seems appropriate to remind folks of Ted Rall's Good Idea.
[Originally posted 7 Dec 2007]

Trim Bush from American History
"... Let's begin America's long slog toward moral and political redemption by demanding that our next president's first act be to declare the Bush Administration null and void. Every law and act carried out between 12 noon on January 20, 2001 and January 20, 2009 should just...go...poof. ..."

If WaPo is right, President-elect Obama is already on board:

Obama Positioned to Quickly Reverse Bush Actions
Stem Cell, Climate Rules Among Targets of President-Elect's Team
By Ceci Connolly and R. Jeffrey Smith
Washington Post Staff Writers
Sunday, November 9, 2008; Page A16
Transition advisers to President-elect Barack Obama have compiled a list of about 200 Bush administration actions and executive orders that could be swiftly undone to reverse White House policies on climate change, stem cell research, reproductive rights and other issues, according to congressional Democrats, campaign aides and experts working with the transition team.

Could President Obama go too far?

How??? If W touched it, it's poison - get rid of it!

Stop the madness!!!

W: the gift that keeps on giving

2008-11-08T20:44:00.000-08:00

The following is wrong on so many levels:

New U.S. Rule Pares Outpatient Medicaid Services
By ROBERT PEAR, NYT
November 7, 2008
WASHINGTON — In the first of an expected avalanche of post-election regulations, the Bush administration on Friday narrowed the scope of services that can be provided to poor people under Medicaid’s outpatient hospital benefit.
...
In a notice published Friday in the Federal Register, the Bush administration said it had to clarify the definition of outpatient hospital services because the current ambiguity had allowed states to claim excessive payments.

“This rule represents a new initiative to preserve the fiscal integrity of the Medicaid program,” the notice said.

Where to start?

Humanitarian: Recall W's concept of "universal health care":

"I mean, people have access to health care in America. After all, you just go to an emergency room."
[President Bush Visits Cleveland, Ohio, 10 Jul 2007]

Apparently even this limited definition of "access" was too broad for W.

Economic: Actually, there are two legitimate criticisms of the new policy from an economic perspective.

First: This is NOT the time to start observing "fiscal discipline". The country is in recession, and possibly is teetering on the edge of the big D - Depression. As others more economically astute than I (e.g, here and here) have observed, textbook Keynesian theory suggests now is the time for the Federal Government to spend... and not just give billions of $$$ to the banks! (Tho' I've yet to find the original source of the term, "neo-Hooverism" is an entirely accurate description of W's new-found fiscal discipline!)

Second, as the NYT article notes, in the current economic climate the States are struggling and haven't the wherewithal to provide the lost services. (Ah - but that is the States' problem - not W's!) Again - this sudden penny-wise behavior is very definitely pound-foolish!

W restricts access to medical care in order to secure illusory budget "savings"! What a wonderful commentary on his Presidency!

Stop the madness!

Uh-oh: this could be trouble!

2008-11-06T23:58:00.000-08:00

President George W. Bush today delivered his second very gracious speech in two days:

President Bush Discusses the Transition with Employees of the Executive Office of the President

Unfortunately this address included the following promise:

This peaceful transfer of power is one of the hallmarks of a true democracy. And ensuring that this transition is as smooth as possible is a priority for the rest of my presidency.

When President Bush makes something a "priority" of his presidency, somehow that something just never quite works out!

Catching Osama bin Laden was a priority.
Bringing stability to Iraq was a priority.
More recently, getting an Israeli-Palestinian peace plan in place was a priority.

We can only hope that the peaceful transfer of power will occur as planned - despite it being a priority!

Have a nice day.

Self-indictment (no, not my own)

2008-11-06T12:24:00.000-08:00

Okay - I'll admit that it's fun to read & hear all the trash talk coming from McCain's campaign staff about Gov. Palin... BUT!

... don't these folks realize that with every new juicy bit they dole out they simply indict themselves & their candidate???
Who picked Palin? McCain.
Who vetted Palin? McCain's staff.

If Palin was weak on basic geography, policy, and general knowledge... well, who bears the blame? McCain & his staff for choosing her!

If Palin used campaign funds for shopping sprees, whose fault is that? McCain's staff for not instituting and enforcing fairly basic financial controls.
A campaign is a large organization with lots of money flowing through it - and the financial side of a campaign is fairly strictly regulated by the Feds. Basic financial control structures are needed. Where were they??? And whose fault is it that controls were lax enough to allow personal spending sprees, charged to the campaign? McCain's staff.

Again - I do enjoy the nasty nuggets, but wonder about the self-preservation instincts possessed by those who peddle them.

Election predictions: how'd I do?

2008-11-06T11:46:00.000-08:00

Short answer: not well.

Looks like we won't know final House & Senate for a while, but on the Presidential contest I was way off.
I called 333 electoral votes for Obama. To date he has 364, with Missouri still not known.
I'm still waiting to see final popular vote breakdown, but suspect my guess of 52+% is a tad on the low side.

Back to the real world

2008-11-06T11:18:00.000-08:00

Longer-term jobless benefits hit 25-year high

Retailers report steep sales declines in October

Stocks extend decline as economic woes mount

Fidelity to cut nearly 1,300 jobs

A public-service reminder:

Secretary Paulson on "Fox News Sunday"
[Treasury Secretary]PAULSON: Chris, I've got great confidence in our financial market, our financial institutions. Our markets are resilient. They're flexible. Our institutions, our banks and investment banks, are strong.

And I am very confident with the help of the regulators and market participants we're going to work our way through this.
[16 March 2008]

Transcript: Treasury Secretary Paulson on 'FOX News Sunday'
[Treasury Secretary] PAULSON: U.S. economic fundamentals are healthy, unemployment is low, wages are rising, and core inflation is contained.
[27 Jan 2008]

This was back when big action may actually have helped. The focus of both discussions, however, was the $150Bn 'stimulus package'... What if we'd gone for a $700Bn 'stimulus package' then, instead of a $700Bn 'bail-out' in September? Who knows?

The real point of this post is that:

1. The current mess was foreseeable - at least as far back as Jan 2008, and probably earlier.
2. Ideology & politics prevented those nominally 'in charge' to take effective action to honestly mitigate effects of what was probably an unavoidable hard stop.
3. These guys are still in charge.

Makes you feel all warm and fuzzy, doesn't it?

Stop the madness.

What a surprise!

2008-11-06T10:19:00.000-08:00

Rice: Mideast peace by year-end no longer possible

Recall, this was to be W's signature achievement before leaving office! ... tho' he didn't get started on it till last November - amid much hoopla: the famed "Annapolis Conference".

How many days till Jan 20, 2009???

From This Modern World

2008-11-06T00:14:00.000-08:00

Eight long years
... The Republicans tried to win with hate and fear and division, and instead they failed. Spectacularly, definitively, repudiated in a landslide. And you know what I hope, at this moment? That Joe the Plumber becomes a widely-used symbol for all that has been wrong with America. That tv commentators invoke his name as shorthand for the politics of stupidity — “Maybe Joe the Plumber thinks we need to put all the Danish-Americans in internment camps, but no rational person agrees!” — and a heartfelt chuckle is had by all, and no more need be said, so universal is the understanding.

I very much want that to be the legacy of Joe the Plumber.

As noted in previous post, we have three pretty good case-studies illustrating the failure of "hate, fear, and division" and character assassination as campaign tactics.

What to do when the supposed intellectuals of the right - I have in mind William Kristol - embrace Sarah Palin, who has been revealed by Fox News (!) to have believed that Africa is a country, not a continent!

In fact, I honestly hope that Sarah Palin & Joe the Plumber are the future leaders of the Republican Party! To whom will such a party appeal? To the 25% that still think W is doin' a heckuva job! - not to "moderate" Republicans, not to Independents, not to the modern equivalent of "Reagan Democrats", not to George Will... Only to those who believe the antediluvian Eden is a real, physical place.

Now that's the Republican Party I'd like to run against!

"If the economy hadn't tanked, McCain would've won"

2008-11-05T21:19:00.000-08:00

[... but first, I'd like to try to dispel a myth: the U.S. economy did not suddenly fall off a cliff in September. It had been on a downward trajectory for quite a while - this downward trajectory became impossible to ignore in September. Keen observers - Paul Krugman and Atrios among them - had been shouting at the top of their lungs for more than a year about the coming crash. Both Sen. Obama and Sen. Clinton recognized at least some of the economic ills last spring.]

Onward.
A common talking-point - particularly among Republican apologists - is that McCain would've won - or at least not lost so badly - had the economy not tanked in September. Who knows, they may be right...

BUT... this serves only to highlight a weakness of the Republican brand: a Republican candidate has no chance to win if the economy is in tatters. Why not? Presumably because Republicans don't know how to fix a broken economy!
There are two other plausible alternative explanations - other than the weakness of the Republican brand... and they are self-reinforcing:
Alternative #1: When the economy tanks, the incumbent Party gets the blame. [The Republicans broke the economy!]
Alternative #2: McCain's economic policy, such at it was, simply extended W's policy - which led to disaster. [McCain proposes to perpetuate the policies that broke the economy!]

Sen. Obama also found himself faced with the very same economic crisis, and with the very same two months left till the election. Why was he not at a disadvantage?
Well - there are Alternatives #1 & #2, above: Obama's not a Republican... and his economic policy - outlined fairly clearly on his campaign website - is not a continuation of W's follies.

Other than that?
Obama seemed calm in response to crisis. McCain seemed unhinged.

A few of the talking heads have noted this, and suggested that it wasn't the economic crisis per se that did in McCain - but rather McCain's response to the crisis that doomed him: first pronouncing the fundamentals of the economy strong, then suspending his campaign, then unsupsending his campaign, then throwing out solution #1, then solution #2... then solution #n - without any apparent serious thought behind any of 'em.

This 'chicken-lacking-head' behavior contrasted markedly with Sen. Obama's universally-acknowledged calmness in the face of crisis.

So, yes - without the economic crisis the electorate may not have seen Sen. McCain's inability to respond calmly to a crisis... and in that sense perhaps it was the economic crisis that doomed his candidacy: the crisis revealed for all the world to see just how poorly McCain handled the challenge it presented!

Have a nice day!

One reason (among many)? Maybe...

2008-11-05T20:58:00.000-08:00

In this post I will call attention to three recent campaigns, and suggest they share something in common.

Campaign #1: U.S. President - McCain (R) v. Obama (D)

As many have observed, McCain's campaign was based almost exclusively on attacking Obama's character (occasionally using Obama's policy proposals as a springboard to character attacks; e.g., Obama's tax-policy led almost immediately to McCain labeling Obama a socialist or a communist).

Obama's negative ads focused on McCain's well-documented association with W's policies & failures. Few, if any, attacked McCain's character.
Obama's campaign also included more than a few positive ads, giving the electorate positive reasons to vote for him.

Obama won.

Campaign #2: NC Senate - Elizabeth Dole (R) v. Kay Hagan (D)

In the final week of the campaign, Dole launched a vicious & false character attack on Hagan - the infamous "Godless" spot.

Dole had led in the polls through mid-September. She was, after all, the incumbent!

After the spots, Hagan surged ahead, eventually upsetting the incumbent Dole.

Campaign #3: NM1 - Darren White (R) v. Martin Heinrich (D)

Both campaigns ran negative ads.

Heinrich's negative ads focused on White's record as Bernalillo County Sheriff and in previous state government jobs.

White's negative ads were without exception attacks on Heinrich's character ("liar", "law-breaker", "untrustworthy").

White ran NO positive ads - ads that told the electorate why they ought vote for him.
Heinrich DID run positive ads - ads that told the electorate why they ought vote for him.

Heinrich won handily (11% margin).

In each case the Republican candidate ran a predominantly negative campaign that focused on the Dem candidate's character. "My respected Democratic opponent is an evil person." In each case, this tactic failed miserably.

I hope there might be a lesson here.

Revisiting Cheney's endorsement (a very convoluted conspiracy theory!)

2008-11-05T20:45:00.000-08:00

I note that Candidate Obama was quick to seize on Cheney's last-minute endorsement of Sen. McCain, producing a very effective TV spot based on the endorsement within 24 hours.

I note further than Cheney is politically astute, and therefore would almost certainly have anticipated Candidate Obama's use of the endorsement.

In those final few days, the race seemed to be tightening. Perhaps Cheney feared a McCain come-from-behind victory, and was doing his level best to ensure that Obama won.

But why?

Whichever Candidate ended up the President-elect, he would face a huge mess - W's mess. Perhaps Cheney feared that a McCain administration would be unable or unwilling to clean up the mess - perhaps would even make the mess worse (given McCain's emphasis on balancing the budget, it is possible he'd have worsened the economic crisis!). This failure would practically guarantee the demise of the Republican brand in 2012.

Cheney's solution: get Obama elected! Now it'll be President Obama and the Dems held accountable for not cleaning up W's mess by 2012! - creating an opening for a Republican resurgence!

This is, of course, entirely speculative... but it fits the facts quite neatly. (Why, after all, did Cheney endorse McCain the Saturday before the election???)

Have a nice day.