Friday, February 27, 2009

Excellent Essay from Glenn Greenwald

The corruption of the cocoon

Many politicians, journalists and pundits simply ignore all criticisms and avoid critics -- because there is no real price to pay from doing so.

Glenn Greenwald

Feb. 27, 2009 |

(updated below - Update II)

The Atlantic's Marc Ambinder writes (h/t Andrew Sullivan):

Get Out Of Your D$*#( Shells

Here's a simple way to increase intellectual cross-pollination on the web: honest bloggers of the left and the right should try to interview at least one author/historian/politician from the other side of the aisle at least one a month. So -- Media Matters shouldn't just criticize Bernard Goldberg; they should interview him. Glenn Greenwald should, I don't know, see if Jack Goldsmith from Harvard would chat with him online. Bill Kristol should interview Jane Mayer. Pajamas Media needs to interview Democrats and Democratic experts, and not just each other, or Joe the Plumber, or Sen. Jim DeMint. Righties interviewing righties has gotten so boring and repetitive; lefties fawning over lefties is lazy. Who's going to be brave enough to reach out to an ideological or intellectual opponent, promote their new book, or interview them?

I agree with this almost entirely, but there's an assumption here that isn't quite accurate: the lack of such interviews and debates isn't evidence that there are no such attempts being made. To the contrary: not only politicians, but a huge portion of pundits and journalists, simply refuse to acknowledge any criticisms, let alone engage critics.

Our political discourse is so stratified that politicians and pundits can get all the exposure they want while confining themselves to hospitable venues and only speaking to sympathetic journalists. That, as but one example, is what fuels "access journalism" -- the willingness of politicians to speak only to deferential reporters, who stay deferential in order to ensure that those politicians continue to speak with them, a process that perpetuates itself ad infnitum. That has created a virtually complete -- and quite destructive -- accountability-free zone where politicians and pundits alike can simply avoid any form of adversarial questioning or challenges to their claims [in fact, ironically enough, one of my criticisms of Ambinder during the recent State Secrets controversy was that, when defending the Obama administration's position as conveyed by anonymous DOJ officials (whose anonymity prevented them from being questioned or otherwise engaged), he failed to speak with or even cite anyone who had an opposing view].

Last week, Rachel Maddow interviewed GOP Minnesota Gov. Tim Pawlenty rather aggressively about what she perceived to be the contradiction between his opposition to the stimulus bill and his willingness to accept the monies appropriated by that bill on behalf of his state. Unlike Keith Olbermann, Maddow clearly has a desire to conduct adversarial interviews with those with whom she disagrees (as many Democratic politicians who do her show, likely expecting a friendly venue but receiving the opposite, can attest). But this is what she said at the end of the Pawlenty interview:

Governor Pawlenty represents Minnesota and I will just say -- we ask a lot of Republicans to be on the show and they almost always say no. So, I am particularly grateful whenever anybody says yes. And to any Republicans out there who we ask -- see -- I'm not so bad.

With very few exceptions, Republicans simply won't talk to her. Identically, in 2007, when Bill Moyers produced the first major television report about the media's failures and deceit in the run-up to the Iraq War, he attempted to interview most of the key figures whose actions he intended to highlight and critique -- such as Bill Kristol, Charles Krauthammer, William Safire, Tom Friedman and Roger Ailes. But here's what happened when he tried:

MOYERS: We wanted to talk to some others in the media about their role in the run up to the war. . . . . Judith Miller, who left the Times after becoming embroiled in a White House leak scandal, declined our request on legal grounds.

The Times liberal hawk Thomas Friedman also said no. So did Bill Safire, who had predicted Iraq would now be leading the Arab World to democracy. . . .

The Washington Post's Charles Krauthammer also turned us down. So did Roger Ailes, the man in charge of Fox News. He declined, an assistant told us, because he's writing ab ook on how Fox has changed the face of American broadcasting and doesn't want to scoop himself.

William Kristol led the march to Baghdad behind a battery of Washington microphones. He has not responded to any of our requests for an interview, but he still shows up on TV as an expert, most often on Fox News.

The only targets of Moyers' critique willing to speak with him and address criticisms of their pre-war behavior were (to their credit) Tim Russert and Peter Beinart, who sat and rather uncomfortably addressed Moyers' probing, adversarial examination. But most of the super tough-guy civilization-warriors refused to answer for what they said, instead cowardly hiding behind their challenge-free monologue-columns and/or friendly colleagues at Fox News.

The original impetus for the creation of my Salon Radio show last July was that I wanted to have a forum to question and hear from any political figures, journalists and pundits who were the target of criticisms here. As I wrote when announcing the debut of that show:

Although the podcast show will function as a stand-alone entity, my intent is that it will supplement much of what I write about by enabling me to interview, debate or otherwise engage with people on issues that relate to what I write about. I intend to make it a regular practice to invite onto the show anyone who is criticized here -- journalists, political figures or anyone else -- in order to discuss and debate those critiques.

What I quickly found, however, is that such offers were almost always rebuffed or ignored, to the point where I mostly stopped trying, assuming that it would be futile. Having accountability-free discourse means that many political figures and journalists perceive no benefit -- and certainly no obligation -- to acknowledge critics or confront criticisms.

* * * * *

People who want to opine politically or otherwise have an influence on the political process have -- in my view -- an obligation to engage criticisms. That's the reason I do things such as spend 45 minutes on the Hugh Hewitt Show defending my views on Israel-Gaza and foreign policy generally, going on Fox News to explain objections to John Brennan, debating someone like Cass Sunstein on his excreable opposition to investigations of Bush officials or someone like David Rivkin on his defense of warrantless eavesdropping, or engaging in online discussions with people (such as Megan McArdle, Ben Smith and Ana Marie Cox) with whom I've had sharp disagreements. That's why I virtually always post complaints and responses from those whom I criticize. Speakers at Cato Institute events, as a matter of policy, almost always have someone included in the event to criticize the speaker's views [as I did when I presented Tragic Legacy there, after which former Reagan DOJ official Lee Casey rather harshly critiqued my book, and will have again at an upcoming (soon-to-be-announced) Cato presentation I'm making in early April].

Sometimes these sorts of clashes are unpleasant. Sometimes, due to the people involved or other factors, they are not constructive. But often they are (as but one example, I unexpectedly found my discussion with Hewitt to be quite substantive and weirdly respectful). And, in all events, doing these things is something which, if one wants to spout political opinions in public, one should feel compelled to do [and, to be meaningful, the obligation extends beyond pseudo-debates between such mutually admiring friends (and like-minded comrades) that the bubbly lovefest precludes any serious clashes].

More importantly, it's precisely the ability of politicians, journalists and pundits to avoid meaningful challenges to their views that, more than any other factor, degrades our political discourse. The reason the Wall St. Journal Editors (and others like them) disseminate blatant falsehoods and then never bother to correct or even acknowledge those errors -- and the reason people like Karl Rove can spout the most intellecutally dishonest columns imaginable -- is precisely because they know they can just avoid any venues where they will be questioned or challenged about what they say. Those who insulate themselves from critics and just ignore all criticisms, and who speak only to hospitable audiences, know that they can say anything without consequence or accountability (just compare the cowardly Bill Kristol's humiliating history of deceit and error-plagued punditry to his endless promotions within our media establishment).

In fact, it is this exact dynamic that makes the absence of adversarial journalism -- and the dominance of access journalism -- so destructive. Bush officials were able to spend eight years spewing the most blatant falsehoods because they knew that most journalists wouldn't challenge them or even point out the falsity of their claims. Bush spent eight years almost exclusively speaking to adoring, pre-screened audiences where he heard no challenges to what he asserted. And, in general, it's hard to overstate how severely the cocooning process can distort reality (see here and here for a couple recent, typical examples).

Adversarial challenges to one's statements are a vital check on errors and deceit. Clashes of ideas are an irreplaceable instrument for truth-finding. Shielding oneself from such challenges (or just ignoring them) is not only irresponsible and cowardly, but ensures that one can opine without accountability. That's why bloggers who have an active, smart and critical comment section with which they interact have a major advantage over journalists who hide from critical scrutiny. In all of this, it's reasonable to exercise some discretion -- not all criticisms and/or critics merit attention -- but those who avoid any real challenges to their statements (whether politicians, journalists, or pundits) ought to be stigmatized for doing so, and it ought to be viewed as a powerful indictment against their credibility (Ambinder's post will prompt me to resume efforts to invite onto Salon Radio those who are criticized here and to make note of those who refuse).

* * * * *

What Ambinder describes as this self-imposed cocooning process is now so pervasive that it has actually become the norm, at least in many precincts. During those few occasions when I have been able to interview those whose views I've criticized, my comment section and inbox were filled with warnings that aggressively adversarial interviews should be avoided because it will lead most potential interviewees to refuse future requests. Criticisms of TV journalists who conduct painfully sycophantic, unchallenging interviews with powerful political figures will inevitably prompt defenses that the journalist can't be more adversarial because to do so will ensure that nobody will submit to future interviews. Just as people have been trained to believe that there is something inherently illegitimate about primary challenges to incumbent politicians (it's an undemocratic purge! a circular firing-squad!), so, too, have many people been trained to believe that the ability of politicians and other opinion-makers to shield themselves from any real critical examination is both understandable and even necessary. And thus, there is no real price to pay for those who hide from it.

Until those who suffer a serious loss of credibility from speaking only in hospitable venues and to access-eager journalists -- and until there is a real price to pay for simply ignoring criticisms and even documentation of factual errors -- these practices will almost certainly continue. Ambinder raised an important point here. It's a good suggestion. But it's likely to fall on deaf ears without there being some real incentive for people to change this cocooning behavior.

UPDATE: A few illustrative examples underscore the point here. During her tenure at Time, Ana Marie Cox, to her credit, normalized the idea that Time's reporters and columnists should not only blog, but also regularly engage blogger criticism and interact extensively with their commenters. It's hard to dispute that their subjecting themselves to that sort of two-way interaction has expanded their perspectives and altered their journalistic behavior for the better (see this post from Joe Klein today as just one of many examples; this admission of error from Jay Carney was also a classic example).

By stark contrast, some of the absolute worst "journalists" plaguing the country -- Fred Hiatt, Tom Friedman, David Ignatius, Maureen Dowd, Nedra Pickler -- are also some of the most extensively criticized. Despite their undoubtedly being well aware of that criticism (after all, it prominently appears right on the first and second pages of a Google search of their names), they simply ignore it, never deign even to acknowledge it, and thus just continue unmolested with their dishonest and pernicious behavior, too insular even to respond to widespread critiques of what they do.

UPDATE II: Slate's Dahlia Lithwick wrote a column in 2007 relating to many of these themes that -- without my endorsing all of it -- is worth reading.

On an unrelated note, I spoke to the annual conference of the ACLU of Massachusetts last month regarding impediments to the restoration of civil liberties under the Obama administration. That 30-minute speech, for those interested, can be heard on MP3 here. It's also available on ITunes here (the video of the speech may or may not be posted at some point in the future).

-- Glenn Greenwald

Thursday, February 26, 2009

Doomsday Vault for Seeds

It's nice to have a safe repository for millions of seeds, but it won't amount to much if no humans are around to retrieve them, and at the rate Homo fatalis or Homo funestus (the species formerly known as Homo sapiens) is going, there won't be much left but seeds, and insects.

This from the BBC:

Almost 90,000 food crop seed samples have arrived at the "doomsday vault" in the Arctic Circle, as part of its first anniversary celebrations.

The four-tonne shipment takes the number of seeds stored in the frozen repository to more than 20 million.

The Svalbard Global Seed Vault, built 130m (426ft) inside a mountain, aims to protect the world's food crop species against natural and human disasters.

The £5m ($7m) facility took 12 months to build and opened in February 2008.

"The vault was opened last year to ensure that, one day, all of humanity's existing food crop varieties would be safely protected," explained Cary Fowler, executive director of the Global Crop Diversity Trust (GCDT).

"It's amazing how far we have come towards accomplishing that goal."

The arrival of the latest consignment of seed samples means that the vault, deep inside a mountain on Norway's Svalbard archipelago, is now storing a third of the planet's most important food crop varieties.

Among the anniversary arrivals are 32 varieties of potatoes from Ireland's national gene banks.

It was a lack of diversity among Ireland's potato crops that was believed to have caused the deaths of more than one million people when blight wiped out the nation's potato harvests in the mid-1800s.

The vault, operated by a partnership between the GCDT and the Norwegian government, stores duplicates of seeds held in national collections.

It acts as a fail-safe backup if the original collections are lost or damaged.

"We are especially proud to see such a large number of countries working quickly to provide samples from their collections for safekeeping in the vault," said Norway's Agriculture Minister Lars Peder Brekk.

"It shows that there are situations in the world today capable of transcending politics and inspiring a strong unity of purpose among a diverse community of nations."

As well as the consignment of seeds, experts on climate change and food production have gathered in Longyearbyen for a three-day anniversary conference.

They will examine how climate change threatens global food production, and how crop diversity will improve food security for people in regions that are going to be worst affected.

Frank Loy, an environment adviser to President Obama, said: "When we see research indicating that global warming could diminish maize production by 30% in southern Africa in only 20 years' time, it shows that crop diversity is needed to adapt agriculture to climate change right now.

Wednesday, February 25, 2009

Advice to Space Aliens: Run Away, Run Away!

CNN reports "Galaxy may be full of 'Earths,' alien life" and every one potentially just as dumb and pathologically suicidal as Homo fatalis or Homo funestus (that's us, folks). Perhaps in the grand scheme of things (HA!), some kind of natural selection operates on a galactic scale, and from these hundreds or thousands of intelligent species, one that is actually capable of sustained rationality and harmonious survival will emerge. At this point, we can be reasonably sure it won't be us.
"As NASA prepares to hunt for Earth-like planets in our corner of the Milky Way galaxy, there's new buzz that "Star Trek's" vision of a universe full of life may not be that far-fetched.

An artist's impression shows a planet passing in front of its parent star. Such events are called transits.

Pointy-eared aliens traveling at light speed are staying firmly in science fiction, but scientists are offering fresh insights into the possible existence of inhabited worlds and intelligent civilizations in space.

There may be 100 billion Earth-like planets in the Milky Way, or one for every sun-type star in the galaxy, said Alan Boss, an astronomer with the Carnegie Institution and author of the new book "The Crowded Universe: The Search for Living Planets."

He made the prediction based on the number of "super-Earths" -- planets several times the mass of the Earth, but smaller than gas giants like Jupiter -- discovered so far circling stars outside the solar system.

Boss said that if any of the billions of Earth-like worlds he believes exist in the Milky Way have liquid water, they are likely to be home to some type of life.

"Now that's not saying that they're all going to be crawling with intelligent human beings or even dinosaurs," he said.

"But I would suspect that the great majority of them at least will have some sort of primitive life, like bacteria or some of the multicellular creatures that populated our Earth for the first 3 billion years of its existence."

Putting a number on alien worlds

Other scientists are taking another approach: an analysis that suggests there could be hundreds, even thousands, of intelligent civilizations in the Milky Way.

Researchers at the University of Edinburgh in Scotland constructed a computer model to create a synthetic galaxy with billions of stars and planets. They then studied how life evolved under various conditions in this virtual world, using a supercomputer to crunch the results.

In a paper published recently in the International Journal of Astrobiology, the researchers concluded that based on what they saw, at least 361 intelligent civilizations have emerged in the Milky Way since its creation, and as many as 38,000 may have formed.

Duncan Forgan, a doctoral candidate at the university who led the study, said he was surprised by the hardiness of life on these other worlds.

"The computer model takes into account what we refer to as resetting or extinction events. The classic example is the asteroid impact that may have wiped out the dinosaurs," Forgan said.

"I half-expected these events to disallow the rise of intelligence, and yet civilizations seemed to flourish."

Forgan readily admits the results are an educated guess at best, since there are still many unanswered questions about how life formed on Earth and only limited information about the 330 "exoplanets" -- those circling sun-like stars outside the solar system -- discovered so far.

The first was confirmed in 1995 and the latest just this month when Europe's COROT space telescope spotted the smallest terrestrial exoplanet ever found. With a diameter less than twice the size of Earth, the planet orbits very close to its star and has temperatures up to 1,500° Celsius (more than 2,700° Fahrenheit), according to the European Space Agency. It may be rocky and covered in lava.

Hunt for habitable planets

NASA is hoping to find much more habitable worlds with the help of the upcoming Kepler mission. The spacecraft, set to be launched from Cape Canaveral Air Force Station in Florida next week, will search for Earth-size planets in our part of the galaxy.

Kepler contains a special telescope that will study 100,000 stars in the Cygnus-Lyra region of the Milky Way for more than three years. It will look for small dips in a star's brightness, which can mean an orbiting planet is passing in front it -- an event called a transit.

"It's akin to measuring a flea as it creeps across the headlight of an automobile at night," said Kepler project manager James Fanson during a during a NASA news conference.

The focus of the mission is finding planets in a star's habitable zone, an orbit that would ensure temperatures in which life could exist. Video Watch a NASA scientist explain the search for habitable planets »

Boss, who serves on the Kepler Science Council, said scientists should know by 2013 -- the end of Kepler's mission -- whether life in the universe could be widespread.

Finding intelligent life is a very different matter. For all the speculation about the possibility of other civilizations in the universe, the question remains: If the rise of life on Earth isn't unique and aliens are common, why haven't they shown up or contacted us? The contradiction was famously summed up by the physicist Enrico Fermi in 1950 in what became known as the Fermi paradox: "Where is everybody?"

The answer may be the vastness of time and space, scientists explained.

"Civilizations come and go," Boss said. "Chances are, if you do happen to find a planet which is going to have intelligent life, it's not going to be in [the same] phase of us. It may have formed a billion years ago, or maybe it's not going to form for another billion years."

Even if intelligent civilizations did exist at the same time, they probably would be be separated by tens of thousands of light years, Forgan said. If aliens have just switched on their transmitter to communicate, it could take us hundreds of centuries to receive their message, he added.

As for interstellar travel, the huge distances virtually rule out any extraterrestrial visitors.

To illustrate, Boss said the fastest rockets available to us right now are those being used in NASA's New Horizons mission to Pluto. Even going at that rate of speed, it would take 100,000 years to get from Earth to the closest star outside the solar system, he added.

"So when you think about that, maybe we shouldn't be worried about having interstellar air raids any time soon," Boss said.

Tuesday, February 24, 2009


"Are you aware it is private property?"
— Sir Howard Kingsley Wood responding to Leo Avery (Member of Parliament)
in late 1939 after Avery suggested bombing
arms dumps in Germany's Black Forest
Bernanke Helps Stocks Snap Back
Bank stocks soared, leading the broader market higher Tuesday after Federal Reserve Chairman Ben Bernanke made the stongest comments yet against nationalizing major Wall Street firms.
— Wall Street Journal, Feb. 24, after markets closed
Bernanke calms nationalisation fears
Stress tests of big US banks that start this week are unlikely to lead to any of them being seized by regulators and nationalised outright, Federal Reserve chairman Ben Bernanke told Congress on Tuesday.
His comments provided the clearest signal yet that US authorities hope to support major banks as going concerns in the private markets, taking equity stakes as necessary to shore up their capital in what would amount to partial nationalisations.

— The Financial Times, Feb. 24, after markets closed

Just whom do Ben Bernanke, Timothy Geithner and most importantly Barack Obama think they serve? The answer should be, "The People". While Obama & Co. pay lipservice to this, and while they may actually believe they are first and foremost concerned with the commoners, I get very little sense that this is their real concern.

With Bush, Cheney, Yoo, Addington, Rice, and the gang of war criminals, there was little doubt. They stopped just shy of expressly rejecting democratic principles. The rejection of democracy seems today to be the defining characteristic of the Republican party. The election, if it can be called that, of 2000. The rerun in 2004 (with Ohio the focal point of malfeasance). Rudolf Giuliani's abortive attempt to suspend elections following 9/11. Michael Bloomberg's end-run around the unambiguous will of New Yorkers.

Democracy be damned. That is the mantra of the Republican party.

But Democrats? Well, the road to hell is paved with good intentions, and it is far from clear that their intentions are even all that good.

What if the solution is nationalization? On what grounds then, is nationalization pre-emptively excluded by Obama? It is at least plausible that the explanation is that the real power in the US rejects nationalization — the rich, the oligarchs, who would actually lose, for a change — in the event banks were seized.

What work does the rigid opposition to nationalization do? Whom does it serve? The owners, of course. Nationalization would eliminate any question of We the People being hosed by the John Thains, Ken Lewises, and so on (and on and on) — the legion of billionaires who have spent decades lining their pockets at our expense.

Similarly, nationalization of the health care system would benefit We the People at the expense of the managers and stockholders of multi-billion dollar insurance companies. And so single payer healthcare or national health, adopted around the world, remains forbidden territory in the US.

Whatever the best solution to these problems and others, we can be certain of one thing: If economics is a science, then what we are seeing is not economics, but dogma.

Science cannot proceed by ruling out in advance solutions the researchers (or the funders) don't like. "Solve the problem of what orbits what, but you cannot consider any answer where the Earth is not at the center of the universe." Sound scientific?

That is the approach the Obama administration and all of the US government is now taking. It as close as we might see to a textbook example of dogma driving decisions. Dogma and the veiled threats of Wall Street and corporate executives.

Since the question is no longer, "What will be best for the US economy?" (It has been replaced by, "What will be best for the wealthiest of the wealthy?") The big question now is, "Can the threshold level of contentment be maintained?" As John Kenneth Galbraith wrote years ago in The Culture of Contentment, the great innovation of the New Deal years was to establish for Americans a level of well-being that kept people content. Can this contentment be preserved, or has the US proceeded so far along the road to true Oligarchy that the commonwealth can be ignored in the service of privilege and wealth?

Mayor of Lansing Michigan Hammers Fox News Flunky

That Was Then, This Is Now. This Is Now.

Before his death, John Kenneth Galbraith noted a key difference between reconstruction in Iraq and reconstruction in Japan after the Second World War. There were many comparisons between the US role in Iraq now versus the role in Japan then. Why was reconstruction in Iraq going so badly — so much money going to waste, or just disappearing; projects begun, never completed; projects proposed, never begun; total destruction of cultural treasures; utterly inadequate attention to schools, hospitals, roads; and failure to foster a healthy new governing structure.

The key difference, Galbraith said, was in the intentions of the planners, the problem solvers. In Japan, Galbraith and others saw a genuine problem to be solved honestly. Today, the key problem entertained by Bremer, Petraeus and their masters in the US has been how to make the most money with the least effort, and even that has been tainted by sheer bigotry and gross ignorance.

Now, another nation stands in need of reconstruction — the United States.

Its economy is failing. Its environment, along with that of the rest of the world, is in decline. Schools are declining. Roads and bridges decaying. Healthcare becoming unaffordable for all but the rich. Retirement becoming unreachable.

But the overwhelming sense conveyed by first the Bush planners and now the Obama planners is that their key concern is how to make a buck, or to save the bucks for the billionaires they seem most intent on representing.

In his inaugural address, Obama suggested the words of John F. Kennedy — that we the people have an obligation to our nation, that is, to all Americans. This is the rhetoric of responsibility, a popular theme for at least 40 years, one usually turned on the least fortunate to condemn them for their misfortune.

The poorest and increasingly the substantially impoverished middle classes are enjoined to consider their own responsibility and thus not turn to the government for a handout.

Never in the course of American history has so hypocritical demand been made. It is an ancient notion that the most fortunate bear a special responsibility to those who are less so. But in this absurd nation, the most fortunate demand and demand and demand ever more aid from those least able to provide. President Obama offers only the most tepid criticism of this threat-backed begging. He offers little or nothing of substance to remind the most fortunate of the obligation they bear by virtue of their fortune.

There are in history precedents for this hypocritical demand on the many to aid the privileged few. They are not happy ones. The French Revolution, the Russian Revolution, Vietnam, the Middle East.

We are at a crossroads. In a sense, every moment in history is just as weighty as every other. But intuitively we grasp that some moments are of greater weight in the course of human development. This is such a moment.

The developing oligarchy of the United States has failed. We can challenge that orthodoxy, or we remain immobile, dumbstruck, complacent, while the oligarchs, now represented by President Obama, sweep us along over the edge into the abyss.

Monday, February 23, 2009

Trillions and Trillions (O, Carl Sagan, Where Are You Now...)

The New York Times has a nice little summation of the extraordinary sums being handed to Wall Street and others to keep billionaires fat out of the fire, and (if you buy the bull) our fat, too — except that, once all is said and done, the billionaires will have taken all the fat and several pounds of our flesh. So We the People are snared in a Catch 22 and the elite are guaranteed to win.

So far We the People are in the hole for 9 trillion dollars$30,000 for every man, woman and child in the United States of America. When do you think the retirement age will be lofted up to 75?

(The Times graphic is interactive and a great deal more informative.)

Broken Hill Dust Storm, Australia

Submitted for Your Consideration: A Hypothetical Question About a Conflict of Interest Faced by Our Government — Serve the People or Serve the Elite

We are on the threshold of a drastic change in the structure of American democracy — a tipping point in economics and politics. If we reject the demands of the corporate elite, they fail, we suffer for a time, then recover and democracy may survive. If, as now appears to be happening, the corporate elite are rewarded for their attacks upon the well-being of the People, then the current decline, the "L" as some are terming it, will likely be permanent. We will see a future where much higher unemployment is permanent (masked as it has been by a careful management of the figures), the majority of those employed will see a lower but still acceptable standard of living (contentment), and real control will far more clearly reside in the hands of the American oligarchs.
GM and Chrysler are back with their hands out for more of Our money. As I write this, before markets open on Monday, 23 February, futures are up on the hope that the Obama administration will give more of Our money to Citigroup and Bank of America. Cerberus Capital Management, 80% owner of Chrysler has said that it has no intention of pumping any of its $24 billion into its car maker. No point sending good money after bad, they guess. But We the People, having little or no say in our 'democratically elected' government will stand and watch as Obama, Geithner, Bernanke and company piss more away down the drain of corporate incompetence and corruption.

All of this is, after just six months or so, old hat to the average American. But here's a question: How many among Us believe that the Obama Administration is actually acting on our behalf? How many believe that Obama & Co. actually desire our well-being, that our lot be improved after all the bailouts and stimuli are done?

Here's a hypothetical question. Let us suppose that leading government figures believed that they had a choice between two incompatible outcomes:
(1) A stimulus and bailout package that would aid the average American at the expense of the banks and corporations, and

(2) An alternative package that would aid the banks and corporations at our expense.
Let us suppose further that the a failure of American economic power would lead to a failure of American dominance around the world, a dominance already shaken by years (more than just the Bush years) of unjustified, violent actions abroad, one-sided approaches to international conflicts, and indifference to global concerns (like environmental ones) in the service of short-term American profit.

Might the government then choose to mortgage the next three or four generations of Americans' livelihoods in order to preserve the global position of the executives and companies from whose ranks have come very nearly all of Obama's cabinet officers and advisers?

A conspiracy theory, you say? No. Just the logic of interest satisfaction. The trickle-down theory expressly endorsed by Reaganites, Greenspaners, Chicago and Harvard scholars is really just a narrow restatement of the top-down economic logic that has dominated the United States for decades. For the overwhelming majority of us to live well, the highest echelons of decision makers in corporate America must live well first. That is, if We the People are living well, then it must be the case that corporate America is doing well and its decision makers are living likewise.

The opposite need not hold. Corporate executives and even their corporations can do very well without We the People doing well at all. Indeed, as events of the past year have proven, corporate executives can do very well while even their own corporations do poorly. The logic of interest satisfaction is a one-way street.

The hullabaloo about 'globalization' was certainly not about the benefits to All of Us. It was rather about the wonders of IBM or Microsoft or Pfizer or whomever doing very well by outsourcing labor to other countries. Taken to its extreme, it would be entirely possible for a corporation owned and headquartered in the US to outsource most or even all of its 'work' overseas. The corporation would do perfectly well without employing any Americans beyond the executives and their support staff.

It is no wonder that the very same advocates of 'globalization' of capital have for the most part opposed globalization of or free trade in labor. While Citigroup may outsource its customer support to India, We the People are largely barred from going here or there to find work. Why? If We the People started leaving en masse (as Europeans did from 150 to 80 years ago so so) the US might suffer a real drain, and we are still (for the time being) needed as a sink — as the consumption engin, buying up goods manufactured by so much outsourced labor. (And, by the way, labor has been outsourced since long before the removal of programming or customer service to India or Russia or where ever. Sweat shops in China or elsewhere are the outsourcing of blue collar labor, an outsourcing ignored because it was far removed from the eyes of American journalists and powerbrokers.)

We the People are dependent on the corporate structure for our commonweal. But there is no parallel dependency of the corporate hierarchy on us. So, in the near term, we can be dispensed with. If We the People see fifteen or twenty percent unemployment, so what? (And real unemployment, as measured before all Reagan and post-Reagan fudging kicked in, is already up around 18%.) The Dow is performing just fine, American Idol is still up in the ratings, and the remaining 80% of the population is buying enough to sustain executive bonuses.

Bread and circuses. Keep a threshold percentage of the population contented, or diverted, and the rest can go to hell. Moreover, if the carrot of contentment is insufficient, the suffering of that 20% will make up the difference as a stick.

We are on the threshold of a drastic change in the structure of American democracy — a tipping point in economics and politics. If we reject the demands of the corporate elite, they fail, we suffer for a time, then recover and democracy may survive. If, as now appears to be happening, the corporate elite are rewarded for their attacks upon the well-being of the People, then the current decline, the "L" as some are terming it, will likely be permanent. We will see a future where much higher unemployment is permanent (masked as it has been by a careful management of the figures), the majority of those employed will see a lower but still acceptable standard of living, and real control will far more clearly reside in the hands of the American oligarchs.

Sunday, February 22, 2009

Saturday, February 21, 2009

Homeland Security Secretary: We did "some not very nice things"

Tom Ridge, first Secretary of Homeland Security has accepted an International Commission of Jurists report criticizing US torture of prisoners. The report states that measures taken by the US and other states
have resulted in human rights violations, including torture, enforced disappearances, secret and arbitrary detentions, and unfair trials. There has been little accountability for these abuses or justice for their victims.


Much damage has been done to the international legal framework in these few short years [since 9/11].
The report is striking for, among other things, the near-total absence of American members, a testament perhaps to the unwillingness of Americans to risk being labelled 'anti-American'.

Striking also is the tepid admission of Tom Ridge. It is powerfully reminiscent of 'admissions' of wrongdoing — or worse — by the United States or Israel. The US (or Israel) has "done some not very nice things" (a popular construction).

For the hundreds of thousands of dead in Iraq, or for the innocent victims tortured to death at Abu Ghraib or Bagram (in Afghanistan) or Guantanamo Bay apologies are too little, too late. And worse, President Obama shows little sign of changing US policy apart from removing the glaring eyesore of Guantanamo Bay.

Nouriel Roubini Pessimistic About Recovery

Thursday, February 19, 2009

Tom Engelhardt Nails the 100 Trillion Dollar Question

Is Economic Recovery Even Possible on a Planet Headed for Environmental Collapse?
By Tom Engelhardt,
Posted on February 19, 2009, Printed on February 19, 2009

It turns out that you don't want to be a former city dweller in rural parts of southernmost Australia, a stalk of wheat in China or Iraq, a soybean in Argentina, an almond or grape in northern California, a cow in Texas, or almost anything in parts of east Africa right now. Let me explain.

As anyone who has turned on the prime-time TV news these last weeks knows, southeastern Australia has been burning up. It's already dry climate has been growing ever hotter. "The great drying," Australian environmental scientist Tim Flannery calls it. At its epicenter, Melbourne recorded its hottest day ever this month at a sweltering 115.5 degrees, while temperatures soared even higher in the surrounding countryside. After more than a decade of drought, followed by the lowest rainfall on record, the eucalyptus forests are now burning. To be exact, they are now pouring vast quantities of stored carbon dioxide, the greenhouse gas considered largely responsible for global warming, into the atmosphere.

In fact, everything's been burning there. Huge sheets of flame, possibly aided and abetted by arsonists, tore through whole towns. More than 180 people are dead and thousands homeless. Flannery, who has written eloquently about global warming, drove through the fire belt, and reported:

"It was as if a great cremation had taken place… I was born in Victoria, and over five decades I've watched as the state has changed. The long, wet and cold winters that seemed insufferable to me as a boy vanished decades ago, and for the past 12 years a new, drier climate has established itself… I had not appreciated the difference a degree or two of extra heat and a dry soil can make to the ferocity of a fire. This fire was different from anything seen before."

Australia, by the way, is a wheat-growing breadbasket for the world and its wheat crops have been hurt in recent years by continued drought.

Meanwhile, central China is experiencing the worst drought in half a century. Temperatures have been unseasonably high and rainfall, in some areas, 80% below normal; more than half the country's provinces have been affected by drought, leaving millions of Chinese and their livestock without adequate access to water. In the region which raises 95% of the country's winter wheat, crop production has already been impaired and is in further danger without imminent rain. All of this represents a potential financial catastrophe for Chinese farmers at a moment when about 20 million migrant workers are estimated to have lost their jobs in the global economic meltdown. Many of those workers, who left the countryside for China's booming cities (and remitted parts of their paychecks to rural areas), may now be headed home jobless to potential disaster. A Wall Street Journal report concludes, "Some scientists warn China could face more frequent droughts as a result of global warming and changes in farming patterns."

Globe-jumping to the Middle East, Iraq, which makes the news these days mainly for spectacular suicide bombings or the politics of American withdrawal, turns out to be another country in severe drought. Americans may think of Iraq as largely desert, but (as we were all taught in high school) the lands between the Tigris and Euphrates Rivers, the "fertile crescent," are considered the homeland of agriculture, not to speak of human civilization.

Well, not so fertile these days, it seems. The worst drought in at least a decade and possibly a farming lifetime is expected to reduce wheat production by at least half; while the country's vast marshlands, once believed to be the location of the Garden of Eden, have been turned into endless expanses of baked mud. That region, purposely drained by dictator Saddam Hussein to tame rebellious "Marsh Arabs," is now experiencing the draining power of nature.

Nor is Iraq's drought a localized event. Serious drought conditions extend across the Middle East, threatening to exacerbate local conflicts from Cyprus and Lebanon to Gaza, the West Bank, and Israel where this January was reported to have been the hottest and driest in 60 years. "With less than 2 months of winter left," Daniel Pedersen has written at the environmental website Green Prophet, "the region has received only 6%-50% of the annual average rainfall, with the desert areas getting 30% or less."

Leaping continents, in Latin America, Argentina is experiencing "the most intense, prolonged and expensive drought in the past 50 years," according to Hugo Luis Biolcati, the president of the Argentine Rural Society. One of the world's largest grain exporters, it has already lost five billion dollars to the drought. Its soybeans -- the country is the third largest producer of them -- are wilting in the fields; its corn -- Argentina is the world's second largest producer -- and wheat crops are in trouble; and its famed grass-fed herds of cattle are dying -- 1.5 million head of them since October with no end in sight.

Dust Bowl Economics

In our own backyard, much of the state of Texas -- 97.4% to be exact -- is now gripped by drought, and parts of it by the worst drought in almost a century. According to the New York Times, "Winter wheat crops have failed. Ponds have dried up. Ranchers are spending heavily on hay and feed pellets to get their cattle through the winter. Some wonder if they will have to slaughter their herds come summer. Farmers say the soil is too dry for seeds to germinate and are considering not planting." Since 2004, in fact, the state has yoyo-ed between the extremities of flood and drought.

Meanwhile, scientists predict that, as global warming strengthens, the American southwest, parts of which have struggled with varying levels of drought conditions for years, could fall into "a possibly permanent state of drought." We're talking potential future "dust bowl" here. A December 2008 U.S. Geological Survey report warns: "In the Southwest, for example, the models project a permanent drying by the mid-21st century that reaches the level of aridity seen in historical droughts, and a quarter of the projections may reach this level of aridity much earlier."

And talking about drought gripping breadbasket regions, don't forget northern California which "produces 50 percent of the nation's fruits, nuts and vegetables, and a majority of [U.S.] salad, strawberries and premium wine grapes." Its agriculturally vital Central Valley, in particular, is in the third year of an already monumental drought in which the state has been forced to cut water deliveries to farms by up to 85%.

Observers are predicting that it may prove to be the worst drought in the history of a region "already reeling from housing foreclosures, the credit crisis, and a plunge in construction and manufacturing jobs." January, normally California's wettest month, has been wretchedly dry and the snowpack in the northern Sierra Mountains, crucial to the state's water supplies and its agricultural health, is at less than half normal levels.

Northern California, in fact, offers a glimpse of the havoc that the extreme weather conditions scientists associate with climate change could cause, especially when combined with other crises. In a Los Angeles Times interview, new Secretary of Energy Steven Chu offered an eye-popping warning (of a sort top government officials simply don't give) about what a global-warming future might hold in store for California, his home state. Interviewer Jim Tankersley summed up Chu's thoughts this way:

"California's farms and vineyards could vanish by the end of the century, and its major cities could be in jeopardy, if Americans do not act to slow the advance of global warming... In a worst case... up to 90% of the Sierra snowpack could disappear, all but eliminating a natural storage system for water vital to agriculture. 'I don't think the American public has gripped in its gut what could happen,' [Chu] said. 'We're looking at a scenario where there's no more agriculture in California.' And, he added, 'I don't actually see how they can keep their cities going' either."

As for East Africa and the Horn of Africa, under the pressure of rising temperatures, drought has become a tenacious long-term visitor. For East Africa, the drought years of 2005-2006 were particularly horrific and now Kenya, with the region's biggest economy, a country recently wracked by political disorder and ethnic violence, is experiencing crop failures. An estimated 10 million Kenyans may face hunger, even starvation, this year in the wake of a poor harvest, lack of rainfall, and rising food prices; if you include the drought-plagued Horn of Africa, 20 million people may be endangered, according to the International Federation of Red Cross and Red Crescent Societies.

Recently, climatologist David Battisti and Rosamond Naylor, director of Stanford University's Program on Food Security and the Environment, published a study in Science magazine on the effect of extreme heat on crops. They concluded, based on recent climate models and a study of past extreme heat waves, that there was "a 90% chance that, by the end of the century, the coolest temperatures in the tropics during the crop growing season would exceed the hottest temperatures recorded between 1900 and 2006." According to the British Guardian, under such circumstances Battisti and Naylor believe "[h]alf of the world's population could face severe food shortages by the end of the century as rising temperatures take their toll on farmers' crops... Harvests of staple food crops such as rice and maize could fall by between 20% and 40% as a result of higher temperatures during the growing season in the tropics and subtropics."

Not surprisingly, it's hard to imagine -- perhaps I mean swallow -- such an extreme world, and so most of us, the mainstream media included, don't bother to. That means certain potentially burning questions go not just unanswered but unasked.

The Grapes of Wrath (Updated)

Mind you, what you've read thus far represents an amateur's eye view of drought on our planet at this moment. It's hardly comprehensive. To give but one example, Afghanistan has only recently begun to emerge from an eight-year drought involving severe food shortages -- and, as journalist Christian Parenti writes, it would need another "five years worth of regular snowfall just to replenish its aquifers." Parenti adds: "As snow packs in the Himalayan and Hindu Kush ranges continue to recede, the rivers flowing from them will diminish and the economic situation in all of Central Asia will deteriorate badly."

Nor is this piece meant to be authoritative, exactly because I know so relatively little. Think of it as a reflection of my own frustration with work not done elsewhere -- and, by the way, thank heavens for Google University. Yes, Googling leaves you on your own, can be time-consuming, and tends to lead to cul-de-sacs ("Nuggets end 17-year drought in Orlando"), but what would we do without it? Thanks to good ol' G.U., anyone can, for instance, check out the National Oceanic and Atmospheric Administration's Drought Information Center or its U.S. Drought Monitor, or the National Weather Service's Climate Prediction Center and begin a self-education.

Now let me explain why I even bothered to write this piece. It's true that, if you're reading the mainstream press, each of the droughts mentioned above has gotten at least some attention, several of them a fair amount of attention (as well as some fine reporting), and the Australian firestorms have been headlines globally for weeks. The problem is that (the professional literature, the science magazines, and a few environmental websites and blogs aside) no one in the mainstream media seems to have thought to connect these dots or blots of aridity in any way. And yet it seems a no-brainer that mainstream reporters should be doing just that.

After all, cumulatively these drought hotspots, places now experiencing record or near-record aridity, could be thought of as representing so many burning questions for our planet. And yet you can search far and wide without stumbling across a mainstream American overview of drought in our world at this moment. This seems, politely put, puzzling, especially at a time when University College London's Global Drought Monitor claims that 104 million people are now living under "exceptional drought conditions."

Scientists generally agree that, as climate change accelerates throughout this century (and no matter what happens from here on in, nothing will evidently stop some form of acceleration), extreme weather of every sort, including drought, will become ever more the planetary norm. In fact, experts are suggesting that, as the Washington Post reported recently, "The pace of global warming is likely to be much faster than recent predictions, because industrial greenhouse gas emissions have increased more quickly than expected and higher temperatures are triggering self-reinforcing feedback mechanisms in global ecosystems."

Now, no one can claim beyond all doubt that global warming is the cause of any specific drought, or certainly the only cause anyway. As with the Texas drought, a La NiƱa weather pattern in the Pacific is often mentioned as a key causal factor right now. But the crucial point is what the present can tell us about the impact of a global pattern of extreme weather, especially extreme drought, on what will surely be a more extreme planet in the relatively near future.

If global temperatures are on the rise and more heat means lower crop yields, then you're talking about more Kenyas, and not just in Africa either. You're probably also talking about desperation, upheaval, resource conflicts, and mass out-migrations of populations, even -- if scientists are right -- from the American Southwest. (And in case you don't think such a thing can happen here, remember Steinbeck's The Grapes of Wrath or think of any of Dorothea Lange's iconic photos of the "Okies" fleeing the American dustbowl of the 1930s.)

Burning Questions

Right now, the global economic meltdown has massively depressed fuel prices (key to farming, processing, and transporting most crops to market) and commodity prices have generally fallen as well, including food prices. Whatever the future economic weather, however, that is not likely to last.

So here's a burning question on my mind:

We're now experiencing the extreme effects of economic bad "weather" in the wake of the near collapse of the global financial system. Nonetheless, from the White House to the media, speculation about "the road to recovery" is already underway. The stimulus package, for instance, had been dubbed the "recovery bill," aka the American Recovery and Reinvestment Act, and the question of when we'll hit bottom and when -- 2010, 2011, 2012 -- a real recovery will begin is certainly in the air.

Recently, in a speech in Singapore, Dominique Strauss-Kahn, head of the International Monetary Fund, suggested that the "world's advanced economies" -- the U.S., Western Europe, and Japan -- were "already in depression," and the "worst cannot be ruled out." This got little attention here, but President Obama's comment at his first press conference that delay on his stimulus package could lead to a "lost decade," as in Japan in the 1990s (or, though it went unmentioned, the U.S. in the 1930s), made the headlines.

If, indeed, this is "the big one," and does result in a "lost decade" or more, here's what I wonder: Could the sort of "recovery" that everyone assumes lies just over a recessive or depressive horizon not be there? What if our lost decade lasts long enough to meet an environmental crisis involving extreme weather -- drought and flood, hurricanes, typhoons, and firestorms of unprecedented magnitude -- possibly in some of the breadbasket regions of the planet? What will happen if the rising fuel prices likely to come with the beginning of any economic "recovery" were to meet the soaring food prices of environmental disaster? What kind of human tsunami might that result in?

Once we start connecting some of today's drought dots, wouldn't it make sense to try to connect a few of the prospective dots as well? After all, if you begin to imagine what the worst might look like, you can also begin to think about what might be done to mitigate it. Isn't that more sensible than looking the other way?

If the kinds of hits regional agriculture is now taking from record-setting drought became the future norm, wouldn't we then be bereft of our most reassuring formulations in bad times? For example, the president spoke at that press conference of our present moment as "the worst economic crisis since the Great Depression." On an extreme planet, no such comforting "since the..." would be available, nor would there be any historical road map for what was coming at us, not if we had already run out of history.

Maybe the world we knew but scarce months ago is already, in some sense, long gone. What if, after a lost decade, we were to find ourselves living on another planet?

Feel free, of course, to ignore my burning questions. After all, I'm only an amateur with the flimsiest of credentials from Google U. Still, I do keep wondering when the media pros will finally pitch in, and what they'll tell us is on that distant horizon, the one with the red glow.

Tom Engelhardt, editor of, is co-founder of the American Empire Project and author of The End of Victory Culture.

From FAIR: Noam Chomsky Excavates the George Will Memory Hole

This amusing piece from FAIR showing how the "impartial, unbiased, moderate" mainstream really works, especially when little tin gods like George Will are challenged. [Red emphasis is mine.]

02/18/2009 by Gabriel Voiles

In a blog post about how it must have been "So Much Nicer To Be George Will Before The Internet" (2/17/09), A Tiny Revolution's Jonathan Schwarz looks back over how "on Sunday George Will made things up so he can claim global warming isn't happening" to "a funny story of Noam Chomsky's from the book Understanding Power about a column Will wrote in 1982":

[A] few years ago George Will wrote a column in Newsweek called "Mideast Truth and Falsehood," about how peace activists are lying about the Middle East, everything they say is a lie. And in the article, there was one statement that had a vague relation to fact: He said that Sadat had refused to deal with Israel until 1977. So I wrote them a letter, the kind of letter you write to Newsweek--you know, four lines--in which I said, "Will has one statement of fact, it's false; Sadat made a peace offer in 1971, and Israel and the United States turned it down." Well, a couple days later I got a call from a research editor who checks facts for the Newsweek "Letters" column. She said: "We're kind of interested in your letter; where did you get those facts?" So I told her, "Well, they're published in Newsweek, on February 8, 1971" --which is true, because it was a big proposal, it just happened to go down the memory hole in the United States because it was the wrong story. So she looked it up and called me back, and said, "Yeah, you're right, we found it there; okay, we'll run your letter." An hour later she called again and said, "Gee, I'm sorry, but we can't run the letter." I said, "What's the problem?" She said, "Well, the editor mentioned it to Will and he's having a tantrum; they decided they can't run it." Well, okay.

Theorizing that these days "it must be hard for Will to get used to bluggs, because he's spent his entire career with total impunity," Schwarz doesn't spare those people responsible for publishing Will's damaging claptrap either: "Two days later, Will and Fred Hiatt, the editor of the Washington Post op-ed page, still won't explain their behavior." See the newest FAIR Action Alert: "Does the Post Fact-Check George Will?: Columnist's Climate Change Denial Distorts Reality" (2/18/09)

Google Does Pentagon's Laundry

Ask and ye shall receive — if you're high-powered American. When Dickless Cheney wanted his official Washington residence blurred on Google Earth, the good Googleans obliged. Anyone (like yers truly) who's trolled about Google Earth has likely found some of the sites that are 'sanitized', 'laundered', etc. For example, the New York prison at Ossining, "Sing-Sing", is blurred. There are many others.

Now we can add to the list a US base in Pakistan. The Times of London reports on Google's face saving gesture for the US. The ostensible reason is one of security. But the Predator has also been the cause of numerous Pakistani and Afghani civilian deaths. The so-called smart weapon, providing immunity to its American controllers, also allows sloppiness (or ruthlessness).
The US was secretly flying unmanned drones from the Shamsi airbase in Pakistan's southwestern province of Baluchistan as early as 2006, according to an image of the base from Google Earth.

The image — that is no longer on the site but which was obtained by The News, Pakistan's English language daily newspaper — shows what appear to be three Predator drones outside a hangar at the end of the runway. The Times also obtained a copy of the image, whose co-ordinates confirm that it is the Shamsi airfield, also known as Bandari, about 200 miles southwest of the Pakistani city of Quetta.

An investigation by The Times yesterday revealed that the CIA was secretly using Shamsi to launch the Predator drones that observe and attack al-Qaeda and Taleban militants around Pakistan's border with Afghanistan.


The image of the US drones at Shamsi highlights the extraordinary power — and potential security risks — of Google Earth.

Several governments have asked it to remove or blur images of sensitive locations such as military bases, nuclear reactors and government buildings. Some have also accused the company of helping terrorists, as in 2007, when its images of British military bases were found in the homes of Iraqi insurgents.

Last year India said that the militants who attacked Mumbai in November had used Google Earth to familiarise themselves with their targets. Google Street View, which offers ground-level, 360-degree views, also ran into controversy last year when the Pentagon asked it to remove some online images of military bases in America.
You can also see the images in greater detail via Cryptome and Eyeball Series.

Sunday, February 15, 2009

Some Economists Are Funny; Others Are Stupid

A funny economist rags on one of Harvard's many stupid economists, N. Gregory Mankiw.

Saturday, February 14, 2009

Do You Have a Go Bag?

Remember the "ready bag" or "go bag" after 9/11, or was it after the blackout? Can't remember. But the gist of it was that New Yorkers were supposed to have certain essentials ready to go in the event of an emergency.

Now, we have an emergency of an entirely different kind than 9/11 and one — in truth — which represents a far greater threat to a far greater percentage of the population than any terrorist.

So what's an economic "go bag" look like?

Bloomberg AWOL on NYC Economy

There is one point on which Michael Bloomberg can campaign with a claim that no likely contender can make — economic expertise. This amounts to little more than a rehash of an old American Article of Faith: "Success in Business Denotes Economic Wisdom". Michael Bloomberg has been unambiguously successful in business; therefore, he knows how to manage an economy.

False. We are confronted now with a test of all the Dogmas of the past forty or fifty years, the dogmas of the Chicago School, now the default educational dogma at every major business school and economic department — the orthodoxy, from which an academic strays at risk of his or her academic life. The mere fact that so many Harvard and Chicago and MIT people populate Obama's economic team should set off alarm bells. It isn't because the reporters at The New York Times or NPR or CNN are just indoctrinated in the scheme of intellectual obedience.

There is little if any evidence that Bloomberg is any different. To date he has offered only the mildest departures from the orthodoxy (for example, when he question Governor Paterson's ignorant assertion that imposing a millionaires' tax would drive the rich out of the state).

In the science (if it is a science) of economics, we are approaching a point of punctuation. The equilibrium of orthodoxy is being shaken. All efforts currently are bent towards protecting that orthodoxy. So the same, tired old 'experts' are rallied to protect the private fortunes of their old buddies from Harvard or Chicago or MIT. And the facts are contorted to fit the orthodoxy.

One of the central facts is among the most important to a massive city like New York — unemployment. Since the Reagan years, the calculus of unemployment figures has undergone repeated reconstruction to reduce the numbers of officially unemployed. But the older calculus is still available to us. If we use it to gauge current unemployment numbers, the results are sobering — a real unemployment rate in the neighborhood of 18%, according to statistician John Williams:

Chart of U.S. Unemployment

How will Bloomberg address this? If the nation is still delusional about the depths of the current decline, New York City is psychotic.

The workforce of New York City numbers about 4 million. A real unemployment rate of 14%, a figure currently widely accepted if under-reported, means well over half a million people out of work in the five boroughs. Twenty percent unemployment would mean 1 million people out of work. And we today live in the post-Reagan, post-Clinton welfare-is-evil society. How are 1 million people with little or no income going to manage?

Likewise, a quick review of New York City's largest businesses show this city is headed for trouble likely to far exceed that of the rest of the country. The city is painfully overdependent on exactly those businesses most hammered by the collapse.

Friday, February 13, 2009

Where Are Their Kind Now?

Thomas Paine
Author of Common Sense, advocate of American independence and of the American commoner, reviled after the Revolution for his continuing advocacy of the rights of all.

Wat Tyler
Lead the English Peasant's Revolt of 1381, advocating egalitarian principles.

Queen Boudica
Lead the English tribes in an uprising against occupying Roman forces in AD 60 or 61.

Lead the slave uprising against Roman rule in 73 BC.

Nat Turner
Lead the slave rebellion in Virginia in 1831.

John Brown
Abolitionist who attempted in 1859 to inspire a liberation movement among slaves in Harpers Ferry, VA

Pyotr Kropotkin
Born to Russian nobility, became increasingly disillusioned with royalty and embraced anarchism.

Daniel Shays
Moved by the poverty of people in western Massachusetts, lead farmers in a revolt against the government of Massachusetts in 1786

Ned Ludd
According to legend, enraged by the loss of employment with the introduction of machinery, namely the stocking frame for knitting, he smashed two frames in 1779 and became a hero to workers.

Guy Fawkes
Sought to end Protestant oppression of Catholics in Britain in the 1605 Gunpowder Plot to blow up Parliament.

Che Guevara
Joined Fidel Castro in the 1956 revolutionary invasion of Cuba to overthrow US-sponsored dictator Batista.

Marcus Garvey
Advocated a unified African effort to the removal of European powers from Africa

Ho Chi Minh
Citing the US Declaration of Independence, petitioned Woodrow Wilson to aid in the nationalist aspirations of the Vietnamese people. Wilson ignored him.

Thursday, February 12, 2009

Reinflating the Bubble

An interesting spectrum of economists are sounding damned pessimistic about the Obama-Geithner-Summers 'stimulus'plan. I've heard conservative and liberal analysts characterize the plan as little more than a scheme to "reinflate the bubble".

Here is a breakdown of the 'stimulus' courtesy of McClatchy.

Wednesday, February 11, 2009

Atomic Spaceships? Yes, They Really Did

From the wonder 50s when anything that was good could be made better by making it atomic! And anything that was bad could be made badder by making it atomic!

Watch this then check out the documentary Atomic Cafe.

Tuesday, February 10, 2009

Bailout by Yes-Men

Timothy Geithner, Hank Paulson, Robert Rubin, & Co. did not get ahead by saying things people did not want to hear. As in any strongly authority-driven culture, they worked to please authority. Thinking unconventionally, sticking out, saying what is unpopular is anathema.

The New York Times ran a story on February 9th ("Why Analysts Keep Telling Investors to Buy") which fits well into this framework. The buy buy buy mentality is more complicated since there are issues of conflicts of interest etc. But a basic problem is that bad news is never welcome. People don't seek it out. And messengers dread delivering it.

But now we are in a time when, one, bad news must be delivered. And, two, unconventional thinking is a must. As long as the ship was sailing on steady seas under a steady wind, it was easy to make money and for the Rubins, Greenspans, Paulsons to claim credit.

But in these times, their minds are too small to grasp the nature of the problem. They are neither capable or willing. And more important, they are deeply unwilling to risk their own fortunes, in either money or prestige. "Failing upward", as is common on Wall Street, is all about putting obedience and conformity before substance, thought, invention. This is not to say that the native talent is absent. They are as gifted with native intellect as any other. But they have thrown most of it over the side in the service of wealth or approval.

One of Geithner's few purported pluses was that he had not worked for years in the bellies of the beasts — Goldman Sachs, Lehman, Citigroup, and so on. He worked in the beast of Greenspan's design, the Fed. The supposition was that Geithner made a choice of public service. But who knows? Maybe he just didn't have what it took to get a job at Goldman Sachs. He studied government and Asian studies at Dartmouth — not irrelevant, but neither a subject obviously involving any study of business or economics (certainly no mathematics or anything comparably rigorous, not that Wall Street shows much command of math). Then the CIA farm league at Johns Hopkins, the School of Advanced International Studies with international economics and East Asian studies.

Who can say. Geithner is unlikely to tell us what jobs he was rejected for. But he failed up into Secretary of the Treasury. Likewise, Larry Summers failed up from Harvard (where he distinguished himself with his abrasiveness, ignorance and outright bigotry).

Sadly, President Obama seems so far to be a conformist, too. Again, like his peers, he clearly has an excellent mind. But his "team of rivals" betrays an utter unwillingness to challenge what John Kenneth Galbraith originally called the conventional wisdom.

Some Thoughts and Questions on Economic Issues

What is the Right Frame of Mind?
Do you approach problems like those now sinking the US with an "optimistic" point of view? If you approach the problem with the assumption that it cannot be solved, chances are pretty good you will find a way not to solve it. Conversely, if you are unrealistically 'optimistic', you are likely to miss the mark.

There are two kinds of optimism. The first, optimism that a solution exists. This is the reasonable optimism. The second, an optimism about whatever particular solution you are wedded to.

This second kind is the one that the Obama Administration is exhibiting, lead for the time being by Timid Timothy Geithner: "We are going to take aggressive measures. Aggressive. Take action. Yes, can do. Do now. Action." All said while slowly backing away, preparing for the "Run Away!"

Articles of Faith
If we were lucky, we would be trying to draw attention to the assumptions Obama, Geithner, Summers, and others are making unwittingly. But this Team of Rivals has made clear that they are quite consciously not going to challenge particular assumptions:
  1. No public ownership. The US will not nationalize banks, will not seize control.
  2. Management is just fine. The con-artists who constructed this Ponzi scheme will remain in place.
  3. Tax cuts! This is the Great Republicon Truth and President Obama has jumped right on. But people who are too poor or losing too much to owe any tax in the first place won't benefit from tax cuts. Should be obvious and is, but the tax cuts are the ever-promised kickback to the wealthy who bankroll junkets for members of Congress, provide cushy jobs post-term-in-office, etc.
More to come. . . .

Would You Hope for the Best?

If a neurosurgeon told you, "We're hoping for the best," what would you do? That is the advice of President Obama, Timid Timothy Geithner and Larry 'Deregulator' Summers.

Martin Wolf offers an excellent essay in The Financial Times, reproduced here nearly in its entirety:

Why Obama’s new Tarp will fail to rescue the banks

By Martin Wolf
February 10 2009

Has Barack Obama’s presidency already failed? In normal times, this would be a ludicrous question. But these are not normal times. They are times of great danger. Today, the new US administration can disown responsibility for its inheritance; tomorrow, it will own it. Today, it can offer solutions; tomorrow it will have become the problem. Today, it is in control of events; tomorrow, events will take control of it. Doing too little is now far riskier than doing too much. If he fails to act decisively, the president risks being overwhelmed, like his predecessor. The costs to the US and the world of another failed presidency do not bear contemplating.

What is needed? The answer is: focus and ferocity. If Mr Obama does not fix this crisis, all he hopes from his presidency will be lost. If he does, he can reshape the agenda. Hoping for the best is foolish. He should expect the worst and act accordingly.

Yet hoping for the best is what one sees in the stimulus programme and – so far as I can judge from Tuesday’s sketchy announcement by Tim Geithner, Treasury secretary – also in the new plans for fixing the banking system. I commented on the former last week. I would merely add that it is extraordinary that a popular new president, confronting a once-in-80-years’ economic crisis, has let Congress shape the outcome.

The banking programme seems to be yet another child of the failed interventions of the past one and a half years: optimistic and indecisive. If this “progeny of the troubled asset relief programme” fails, Mr Obama’s credibility will be ruined. Now is the time for action that seems close to certain to resolve the problem; this, however, does not seem to be it.

All along two contrasting views have been held on what ails the financial system. The first is that this is essentially a panic. The second is that this is a problem of insolvency.

Under the first view, the prices of a defined set of “toxic assets” have been driven below their long-run value and in some cases have become impossible to sell. The solution, many suggest, is for governments to make a market, buy assets or insure banks against losses. This was the rationale for the original Tarp and the “super-SIV (special investment vehicle)” proposed by Henry (Hank) Paulson, the previous Treasury secretary, in 2007.

Under the second view, a sizeable proportion of financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities. The International Monetary Fund argues that potential losses on US-originated credit assets alone are now $2,200bn (€1,700bn, £1,500bn), up from $1,400bn just last October. This is almost identical to the latest estimates from Goldman Sachs. In recent comments to the Financial Times, Nouriel Roubini of RGE Monitor and the Stern School of New York University estimates peak losses on US-generated assets at $3,600bn. Fortunately for the US, half of these losses will fall abroad. But, the rest of the world will strike back: as the world economy implodes, huge losses abroad – on sovereign, housing and corporate debt – will surely fall on US institutions, with dire effects.

Personally, I have little doubt that the second view is correct and, as the world economy deteriorates, will become ever more so. But this is not the heart of the matter. That is whether, in the presence of such uncertainty, it can be right to base policy on hoping for the best. The answer is clear: rational policymakers must assume the worst. If this proved pessimistic, they would end up with an over-capitalised financial system. If the optimistic choice turned out to be wrong, they would have zombie banks and a discredited government. This choice is surely a “no brainer”.

The new plan seems to make sense if and only if the principal problem is illiquidity. Offering guarantees and buying some portion of the toxic assets, while limiting new capital injections to less than the $350bn left in the Tarp, cannot deal with the insolvency problem identified by informed observers. Indeed, any toxic asset purchase or guarantee programme must be an ineffective, inefficient and inequitable way to rescue inadequately capitalised financial institutions: ineffective, because the government must buy vast amounts of doubtful assets at excessive prices or provide over-generous guarantees, to render insolvent banks solvent; inefficient, because big capital injections or conversion of debt into equity are better ways to recapitalise banks; and inequitable, because big subsidies would go to failed institutions and private buyers of bad assets.

Why then is the administration making what appears to be a blunder? It may be that it is hoping for the best. But it also seems it has set itself the wrong question. It has not asked what needs to be done to be sure of a solution. It has asked itself, instead, what is the best it can do given three arbitrary, self-imposed constraints: no nationalisation; no losses for bondholders; and no more money from Congress. Yet why does a new administration, confronting a huge crisis, not try to change the terms of debate? This timidity is depressing. Trying to make up for this mistake by imposing pettifogging conditions on assisted institutions is more likely to compound the error than to reduce it.

Assume that the problem is insolvency and the modest market value of US commercial banks (about $400bn) derives from government support (see charts). Assume, too, that it is impossible to raise large amounts of private capital today. Then there has to be recapitalisation in one of the two ways indicated above. Both have disadvantages: government recapitalisation is a bail-out of creditors and involves temporary state administration; debt-for-equity swaps would damage bond markets, insurance companies and pension funds. But the choice is inescapable.

If Mr Geithner or Lawrence Summers, head of the national economic council, were advising the US as a foreign country, they would point this out, brutally. Dominique Strauss-Kahn, IMF managing director, said the same thing, very gently, in Malaysia last Saturday.

The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. It is an important, but secondary, question whether the right answer is to create new “good banks”, leaving old bad banks to perish, as my colleague, Willem Buiter, recommends, or new “bad banks”, leaving cleansed old banks to survive. I also am inclined to the former, because the culture of the old banks seems so toxic.

By asking the wrong question, Mr Obama is taking a huge gamble. He should have resolved to cleanse these Augean banking stables. He needs to rethink, if it is not already too late.