Category: economics

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Obama’s Failures

It is not easy to sort out the points at which Obama has failed and the points at which a ridiculously venal and disingenuous opposition has succeeded in thwarting all government, all policy and all strategy. The clearest point was the earliest: Obama had a majority in both houses for the first two years of his first term and failed to conclude a number of legislative initiatives, including budget and tax measures, that could have been the foundation for the rest of both terms.

In fairness, not even everyone in his own party would have supported it. The fact that he was only able to squeeze through Obamacare with a bare majority, in spite of the fact that it is essentially the Republican Plan from ten years ago, gives you an indication of just how dysfunctional U.S. national politics is.

Nobody will ever be able to prove, convincingly, that the Republicans had a better strategy for dealing with the 2008 financial crisis than Obama– and, any way, the strategy they did have was same: bail out the banks (and the big contributors to your election campaigns) and string the mortgage holders out to dry, and then cut taxes for the rich. It is easy for Republicans to claim that the economy would have performed better under a McCain or Romney Administration because it is impossible to show that it wouldn’t have. There is no laboratory of economics that can isolate budget policies from all the other factors that go into making up the economic performance of any given country. What evidence we do have suggests that cutting taxes and reducing over-all spending (Republican policies) has a negative effect and that, in fact, we would be worse off today if the Republicans had had their way. Check Wisconsin for comparison.

Obama pressed a little for more help for those hurt the most by the ruthless greed and amoral practices of the big banks, but he didn’t push very hard. Obama’s Justice Department did very, very little in the way of punishing the people responsible for inflicting more peacetime misery on more people all around the world than anyone else before or since. Almost no one was held to account.

Eric Holder was not up to the task. Timothy Geithner was always one of them, as was Ben Bernake.

The Obama administration came to the conclusion that it would be too difficult to prosecute them. That’s a typical “liberal” response to complexity. It was a moment I would have liked a hard-bitten tough-as-nails conservative like Teddy Roosevelt (there’s nobody in the current Republican Party who is anything like that) to come along and just do it. Just let people know that you are going to do it whether they like it or not. Liberals are always trying to get everyone on board and compromise. And usually, that’s a wise strategy. But not when dealing with these Republicans who always ever only had one goal, to prevent Obama from any legislative success whatsoever, no matter what the cost.

So Obama gets elected on the promise of change but the first thing everyone noticed was how many familiar faces there were in his administration, all holdovers from Bush and Clinton and Reagan, all establishment figures, and almost no real outsiders. He tried to get Elizabeth Warren appointed to the Consumer Protection Bureau but caved quickly to hysterical Republican attacks, which is about the highest compliment anyone has recently paid to anyone on either side.

What is it about Elizabeth Warren that they are so frightened of?

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Push the Button First, Gothamites!

You buy a product from a store. The store charges you extra. Then they give you “air miles” which they pay for with the extra money they charged you. This induces a hypnotic state of bliss in the customer.

In “The Dark Knight”, the Joker sets up a situation in which there are two ferries, one filled with upstanding citizens of Gotham, and the other with criminals. They each have a detonator linked to explosives on the other ferry. Whoever pushes the button first will be spared but the other boat will blow up killing all of its occupants.

This is the same principle behind air miles. The profitability of the system depends upon the fact that people like me refuse to collect them. Those who do collect air miles are pushing the button: they get the benefit of this surcharge, while I do not. But the truth is, both of us are paying more for products and services because of this idiotic scheme that vendors have induced people to buy into.

The same applies to discount coupons and affinity cards. Do people seriously believe that the store has reduced prices just because they love having you as a customer? The only reason any vendor has to provide a discount to any particular custom with a coupon or an affinity card is because they can charge more to people who are willing to shop there because of the cheap, meaningless thrill of getting a “discount”.

 

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The Red Line

Is it too much to ask that the U.S. point to a single success story before embarking on a new adventure in disruptive interventions in the Middle East? What is Obama’s model for this enterprise? Has anybody in this administration asked about five years from now, ten years from now, twenty years from now? Does Obama live in an echo chamber wherein his advisors seek advice from their adviser’s advisers? Does he ever hear from anyone with a genuinely dissenting view?

There is raging hypocrisy in all the blather right now coming from Obama and Hagel and Kerry on Syria: after doing nothing while 100,000 people have been killed and thousands more tortured and millions made refugees, now— now! — we cannot stand by anymore, because Assad has used chemical weapons. Now, our integrity is at stake. Now, the world wonders if we have any principles. Now, our hearts are wrung with compassion for the victims of violent, repressive governments.

I would love to ask Obama if he feels the allies fire-bombing of Dresden and Tokyo, Osaka, Yokohama, and other Japanese cities, using M47 oil gel bombs, during World War II crossed any kind of red line?

Now we support democracy in Egypt. Now we don’t.

Now would be a good time, in fact, for the United Nations to vigorously assert that no government has the right to slaughter or repress or abuse their own peoples, whether it be Zimbabwe, North Korea, China, or Iran. But that would be a dramatic change from the prevailing doctrine, which is, what happens in your country stays in your country. Ever since the world community decided, when it formed the United Nations (from the ashes of the failed “League of Nations”), that it was more important that all states be represented and have some investment in the world order than it was to insist that all of them be democracies, we have lived with this devil’s bargain: we will not interfere when you commit atrocities within your own borders. We will only interfere if you cross the border to commit atrocities.

In fairness, one could make a cogent argument for the idea that the UN has actually been effective in reducing the number of wars on the planet.  That’s no joke.  We are all appalled at Egypt and North Korea and Syria, but at least they are not at war with Israel or each other.  That is nothing to sneeze at.  In the 1960’s, there were numerous wars at any given time, with an appalling cost in human lives and material destruction.

What is needed at the moment in Syria is not more U.S. intervention, but a cease-fire.

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The Awful MLK Memorial

I really doubt that Martin Luther King Jr. would have enjoyed seeing $110 million spent on his memorial, especially when the design makes him look like Mao Zedong bursting out of the Great Wall of China ready to stomp out dissent and squash the nationalists.

How can a memorial that ugly cost so much? And, for $110 million, could they not have double-checked the text engraved into it: it will cost about $1 million to remove it, now that everyone seems to think it is an inappropriate misquote. Something about being a drum major.

I am opposed, as a matter of principal, to most monuments, but especially those that exaggerate the physical or historical size of the subject. The bigger the monument, the less likely the builders of the monument intend to live up to the ideals for which the subject stood. The monument is compensation. It’s a loud, bombastic assertion that the builders really care, really do stand for something, really do honor the ideals presented by the subject. It’s like hearing the Republicans talk about how great the Voting Rights Act was because it is no longer necessary, or how the courts carefully oversea the surveillance programs carried out by the NSA. We know they’re lying.

You can hear the Republicans saying to blacks: look, see how we love you? Look at how big the statue is. It’s gigantic. How can you doubt that we are on your side?

If this monument was appropriate, we would never have needed civil rights legislation or the Voting Rights Act: Dr. King would have simply stomped the racists into the ground or ripped the Washington Monument from its base and swept away the segregationists, the KKK, and the fat southern sheriffs in one stroke.

While the City of Detroit declares bankruptcy, the State of Michigan is providing $500 million to build a new arena for the millionaire players and owners of the Detroit Red Wings.

Taxpayer subsidies of major league sports stadiums remains one of the biggest scandals in American politics.

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Is There Anything Good About Men?

This is a response to an article called “Is There Anything Good About Men”.

I’m sure the author feels assured that most people will regard his title as amusing or intentionally provocative, and not ridiculous, or offensive, as it would be if it were “Is There Anything Good About Negroes?” or “Is There Anything Good About Women?”. It’s the kind of bullying, self-amused irony only allowed because men are positioned so comfortably in a privileged position, that no one could possibly regard it as threatening or really pejorative.

The article is linked in an article in the New York Times entitled “Why Men Need Women”. which does more to convince me that the persistent lack of women geniuses in certain fields of endeavor is causing some desperation out there.

Be it known that in spite of perceived equality or superiority of women in fields not requiring physical strength, the international tournament for women’s chess is still an international tournament for women’s chess.  It is separate from the men’s championships.

This is the kind of bullshit that nowadays passes for serious social theory:

We recognize the direct advantages that women as leaders bring to the table, which often include diverse perspectives, collaborative styles, dedication to mentoring and keen understanding of female employees and customers. But we’ve largely overlooked the beneficial effects that women have on the men around them. [NY Times, July 21, 2013]

Gosh, I’d like to meet those women!

It’s not that some women don’t have those qualities.  Some do.  But so do some men.  I’m not convinced that all women leaders have those “advantages” and that men, as a rule, do not.

Now, I know that any generalized knowledge, especially from the social “science” sector, includes a hell of a lot of selectivity and redundancy, therefore providing a barn door’s worth of anomalies, but even so, the idea that there are a lot of women managers out there selflessly promoting their colleagues and underlings and bringing “diverse perspectives” to management meetings is a bit of a stretch.

The one area where women are more than the equal of men is self-interest, even if the the social sciences as a block generally refuse to recognize just how self-interested a lot of overtly “selfless” behavior is. Anyone who has ever forgotten to thank his mother or wife knows this. Any girl in school who hasn’t made the correct gestures of gratitude and loyalty knows this.

On the Disappointing Reality of Women’s Football

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Lanny Breuer’s New Old Job

There’s are things that so obvious the wonder is not that anyone missed it, but that that no one did anything useful about it.

And so we have Lanny Breuer, the man who saved the banking industry from even a single successful prosecution for the 2008 collapse, finally relieved of his position at the Department of Justice, taking a position with the law firm of Covington and Burling. What does Covington and Burling do? They represent large, multinational corporations, like– wait for it– Bank of America, Eli Lilly, General Electric, IBM, Microsoft, Morgan Stanley, NASCAR, and Verizon. And Halliburton. And Phillip Morris.

So Lanny Breuer is now working for the banks. But wait– that’s not true.

Lanny Breuer was always working for the banks.

As the Assistant Attorney General for the Criminal Division of the U.S. Department of Justice, Breuer’s main purpose in life, as he appeared to see it, was to see to it that not a single banker went to jail for the massive frauds that caused the incredible financial collapse of 2008. At the height of his “investigations”, Breuer confided to a banquet hall of lawyers that what kept him awake at night was the fear of what would happen to the banking industry if some bankers were prosecuted.

After a Frontline documentary, “The Untouchables”, revealed the depths and breadth of his indifference to the millions and millions of workers and pension holders whose savings and jobs were ravaged by the intentional frauds committed by the banks, he resigned his position to go back to work for the industry for which he was always working.

The question that must occur to any intelligent American: why should I obey the law?

And Did You Know

Others in my personal hall of infamy of people you never heard of who have caused immense suffering and loss to others:

Janet Reno

Paul Wolfowitz

General Curtis LeMay

People you never heard of who caused a lot of good things to happen (or bad things not to happen)

Paul Martin

Bethany Maclean

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The Subcommittee on Authentication of Authenticity

An original painting by Jean-Michel Basquiat from 1981-1983, regarded as his “peak” period, can sell for up to $16 million. No– wait: $29 million.

Basquiat made some money from his own work but artists themselves almost never make the really big money, for two reasons. Firstly, works of art don’t sell for all that much until the artist is dead. Secondly, art is a racket. By “racket”, I mean that nobody really knows what the “value” of a work of art is until the institutional forces that manage, manipulate, and arrange the art world take hold of it. Basquiat is definitely safely dead, and his works are distinctive, so the art world can now play it’s role. He must be desired to be desired, wanted to be begged, and rare enough to be valuable. But Basquiat’s works will never be as rare as collectors think because it is in no one’s interest to promote the idea that there are a lot of Basquiats out there. [I just heard that someone living in a flooded area of Calgary had an original Van Gogh painting in his house.]

Basquiat

There was, for a time, something called the “Authentication Committee”. You see, a Basquiat is not valuable to anyone because of what it looks like, in spite of utter drivel you will hear:

“he painted a calculated incoherence, calibrating the mystery of what such apparently meaning-laden pictures might ultimately mean” (Marc Mayer, Basquiat in History).

Basquiat’s paintings are very, very valuable because they, like all other collected art, have become a form of currency. They might as well be currency. Above is a $7 million bill.  If you really think you could paint it, you ought to give it a try.  I can guarantee you can’t.

I was going to write something snarky about rich people who don’t appreciate real art and only collect it as an investment, and for it’s snob value. That’s probably all true, but there’s not much new to say about it. I was just struck by the idea of an “Authentication Committee”. We all need an Authentication Committee: this is real, this is not real. This is a hoax. This is phony. All of this is phony. Everything is phony. If everything is phony, then everything is real. You need to sort it out for yourself. You need to stand in front of the painting and decide whether or not you find it entertaining in some way. Then you need to decide if it is entertaining to you because it is shocking that people pay a lot of money for it, or because the colors and shapes and design tickle your eye. Or because other people think that it is only entertaining because it cost a lot of money but you are smarter than that. Or because you can see why people pay a lot of money for it but you have no idea why this particular work, and not some other work by a completely unknown artist, is any good. All of our perceptions can be corrupted. All of them matter. None of them do. But then all of them do.

I like the painting. I think it’s original and interesting and expresses something about Basquiat’s desire to express something. I would be willing to pay more than $100 for that painting, if I ever get a chance to buy it.

 

I love this:

“It hung above a desk in a hotel suite where Coco Chanel lived for more than 30 years and was only discovered to be important last summer, when the hotel shut for a 27-month renovation in the face of stiff competition from newer hotels. ‘It is a magical discovery,’ said Cecile Bernard, a Christie’s expert…'”

The magic, of course, is the fact that this painting was not “important” until an expert from Christie’s got onto her solemn podium of high art and pronounced it so.

The painting is “Le Sacrafice de Polyxene” by Charles Le Brun from the 17th century. It is worth about $650,000.00 (U.S.).

Here’s more on “authentication” and why the art of authentication is in crisis.

And from that article:

When the museum sent Pivar a 15-page letter in 2021 explaining why it did not deem the painting he had spent a few thousand dollars on at auction a van Gogh, he responded by suing for $300 million in U.S. District Court. The museum’s failure to recognize the painting was “negligence,” he argued in court papers, and had reduced its value to almost nothing.

So Pivar is asking the court to step in, essentially, and rule that he has a legitimate Van Gogh, over the objections of the most authoritative body in the world on that subject.

 

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Chinese Hackers

“I don’t need to kill you to get what I want.”

We read that Chinese hackers, once again, are poking around on U.S. government and corporate servers and stealing important data files related to national defense and patented inventions.

I am perplexed. As a computer professional, and a database specialist, I always immediately ask myself how they got in? And then I ask myself, how would I manage a data set that required a very, very high degree of security?

The answer is pretty simple. You don’t expose data like that to an external network.

In the simplest form, this kind of security can be implemented very easily. You locate the files, the applications, the data bases, configurations, libraries, code, whatever, on a local network. You don’t connect it to the internet. All the people working on your project have to be located within your physical network, that is, one or more buildings physically connected by network cable, and not connected to any external modem or line, and certainly without a wireless connection.

I would guess that, from the point of view of industry or government, this might be unacceptable in some way. Anyone working on almost any information technology would need to access the internet often. But what is “unacceptable”? Is opening your information systems to Chinese hackers “acceptable”?

How quickly could we get used to a new acceptable: when you work on a very important project that requires a high level of security, you get off the grid. That’s the way it is. The same way that scientists working in micro bacterial research now have to wear white suits, visors, and gloves and work in sealed rooms, in secure buildings.

I think it can be done. Inevitably, some scientists or engineers will need some information only available on the internet but that can easily be handled by having a physically isolated internet connection to a separate, non-networked computer in the same building. It’s not technically difficult to keep it separate from a LAN. If the information is copied or downloaded, it can be copied onto a flash drive and then transferred to the LAN. Then, even if an employee inadvertently downloaded a virus from the internet, it would have no effect. It won’t be able to connect to a mother ship. The flash drive could be reformatted before ever being used again for extra security. What’s so hard about that?

[It might be argued that all computers nowadays come with built-in wireless connectivity.  But it is possible to build computers without it if there was a demand for it.]

I know: the engineers and scientists will insist they need immediate, continuous access to the internet. If you insist, and the government or industry accedes to this demand, they should quit whining about hackers stealing the data: you have made it available to them.

If you want to rent a car and drive to Italy and park it on the street, please don’t come to me with your crisis about someone stealing your GPS out of your glove compartment– I can tell you right now, that is what will happen. If you don’t like it, go somewhere else.

We have bigger problems with China. Today, the “Inside Washington” program with Gordon Peterson and gang decried the fact that the U.S. is not preparing for war with China. Even Mark Shields seemed to believe we should not be conducting war exercises with China while they are trying to steal our data.

I think he’s wrong. I think that is precisely what we should be doing: engaging China, developing relationships, sharing knowledge with them. If you prepare for war, you will have war. If you prepare for peace, you might not.

The great problem with China is caused by us. Walmart, especially, uses China as a vast pool of cheap labour to produce millions of trinkets to be sold cheaply at the mall outside of your town, thereby driving local businesses out of business and driving more and more American workers into minimum wage jobs supporting the dispersal of the products of Chinese productivity and providing the capital China needs to build a navy that can challenge the navy of the country they expect some day to go to war with, the United States. Apple has found a congenial home in China. All the big American corporations are drooling at the possibilities of a billion new customers. That is what drives U.S. foreign policy and anyone who pretends otherwise is running for president.

If you don’t want China to become big and powerful and rich, you will cut Walmart off at the knees. Walmart will then shift their production to Bangladesh or India or Mexico. Maybe a few jobs will come back to America.

Because both sides know two things. Firstly, there is not enough oil in the world for both the U.S. and a future China when it begins to catch up to American industrial might. Secondly, neither country has the moral or rational ability to say: let’s share.

And Furthermore…

If you don’t like the Internet, get off. I mean it. Who asked you on? Who the hell insisted that corporations should be able to store their data on public networks, advertise their products, and sell their services, online? Get off. Lock your LAN up. Disconnect. Use the telephone instead. Use the courier. Fax your information. Send it by carrier pigeon.

There is no divine ordinance that says that governments and corporations must be allowed to store their data on the internet and should expect that information to be secure.

Get off, get off, get off.

One More Thing

I just think I need to take a moment and remind everyone that Wolf Bitzer at CNN said this about Sarah Palin’s acceptance speech: “She hit one out of the park.”

Let’s not forget.

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The Cost of Warfulness

The New York Times has published an update on comments made by President Eisenhower in 1953, in what was known as the “Chance for Peace” speech, an appeal to the Soviet Union to not indulge in an arms race.   He compared the costs of some major pieces of military equipment with the cost of items with peaceful purposes, like roads and schools and asserted that every dollar spent on  weapons robbed the citizens of tangible peacetime benefits.  Yes, this was a Republican ex-General speaking.  Quite a contrast to the current crop of Republicans who have repeatedly insisted on giving the military more money than it asks for.

The U.S. was spending about 14% of GDP on defense in 1953, the height of the Korean War.  Today, that number is 4.3%.   1953 was a mere eight years removed from World War II, and the U.S. was still at war with Korea, so perhaps the numbers are skewed.  Perhaps we literally get better bang for out buck today.

 

Product Cost Equivalence
F84F Thunderstreak Fighter Jet (1953) $769K 170,000 bushels of wheat
F-22 Raptor (2012) $250 million 29,500,000 bushels of wheat
B54 Stratojet Bomber (1953) $1,500K 30 schools, 2 hospitals, 2 power plants, 50 miles of roads,
B2 Stealth Bomber (2012) $1.5 billion 99 schools, 19 Power Plants
6 hospitals
328 miles of roads
destroyer (1953) 8,000 homes
destroyer (2012) $1.5 billion 34,000 homes

It’s interesting to me how much the price of these objects of destruction have gone up.  A car cost about $800 – 1000 in the 1950’s and today it cost about 20 times as much.  But 20 times $1.5 million (Stratojet Bomber) is a hell of a lot less than $15 billion, which is about 1,000 times the 1953 cost.  That car should cost $1,000,000.

I firmly believe that cost escalation is a result of what Eisenhower called the “military-industrial complex”, that incestuous relationship between the government and business, between congressmen and lobbyists, and industries in the home district, that leads to vastly increased costs, including, famously, the defective F-35, which, it appears, will cost an infinite amount of money, and is necessary to defend us against no one.

University costs have climbed in a similar fashion.  I attended Trinity Christian College in 1974-75 to 1978-79 (I took a year off to work and travel Europe).  My cost the first year for tuition, room and board (on campus housing) was about $3100.  My parents were not wealthy so I received grants totaling about $1400 and loans from the Canadian government for about $1500.   My brother, who was a full-time mechanic, earned about $20,000 that year.  A new car cost about $3600, a gallon of gas was .42.

Here’s my table:

tuition/room & board 3100 35000 11 x
car 3500 19000 5.5 x
salary 17000 43000 3 x
gas 42 2.75 6 x
record (single) .99 .99 !
record (album) 4.99 22.00 4.5 x

It’s interesting that we are actually spending less of GDP on defense than we did in the 1950’s.  I believe that it’s not because our values or strategies have changed, though they have, but due to the fact that our society now produces an overwhelming volume of stuff, so that our defense spending is a smaller proportion of overall productivity.    But it leads me to wonder if the aspiration of peaceniks to reduce defense spending is not somewhat misplaced.  I don’t think cutting our military spending will reduce poverty: it will further enrich people who already manage to pay as little tax as possible.

 

Afterthought

The most effective weapon of World War II–on the ground, at least– was the German Tiger I and Tiger II tanks. A Tiger I cost about 800,000 Reichsmarks, and required the labour of 6,000 people working for one week, or the wages of 30,000 people for one week. Which leads one to wonder just how sustainable the 3rd Reich ever was. The V-2 rocket was also extraordinarily expensive. It killed thousands, but at a cost of millions of Reichsmarks per death.

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The Expensive Iranian Hostage

The former U.S. hostages in Iran believe they should be able to sue the government of Iran for compensation for the horrible suffering they experienced during their 444 days of captivity. I don’t know what kind of scale can be applied here but I know that everyone thinks that their specific suffering is more entitled to sympathy and compensation than anyone else’s suffering, and that while it is never, ever about the money, it is always, always about the money.

And advertisers.

ABC Television decided to run a nightly news program called “Nightline” which was primarily a big fat wet kiss to Ronald Reagan: “The Hostage Crisis! Day blah-blah-blah” making it sound like the entire world had come to a stop to wait to see if the American hostages were going to make it home all right. There were ribbon campaigns, lots of speeches, and miserable old Jimmy Carter stewing in the White House incapable of doing anything about it. Other than, of course, the ill-advised rescue attempt.

The hostages were released after the Iranians were sure that Carter had lost re-election (after he stupidly launched a military rescue attempt) and a deal was concluded which, among other things, specified that the hostages could not sue the Government of Iran for damages.

The State Department had no objection to this clause because you can’t sue a sovereign government for damages anyway.

This outraged the hostages. “How dare the U.S. government sign an agreement that keeps us from untold wealth?!”  Did I say it’s not about the money?

They were hoping to go after seized Iranian assets. But you can see the problem, can’t you? The Iranians could turn around, of course, and sue the U.S. and Great Britain for sponsoring the coup that brought the Shah to power in the first place, and allowed him to repress and torture his own citizens for 35 years while looting the country of billions in oil wealth, and hold massive coronation parades for himself, and buying lots and lots of U.S. military equipment to defend Iran against– get this– the communists! Yes, it was a quaint period in our history..

Could native peoples sue our governments for forcing treaties on them and then violating those same treaties anyway? How about the Vietnamese, whose elected government was overthrown by the French, and then the Americans? Or Guatemala or Nicaragua? Why there is no end of tearful stories.

Among all the tearful stories in the world, the Iranian Hostages don’t rank among the teariest. For one thing, they were willing participants in a corrupt government relationship with a dictatorial regime. For another, it was Carter’s stupidity in allowing the Shah to enter the U.S. for medical treatment that precipitated the crisis. How kind, to our old friend, the dictator! Just as Thatcher was kind to Pinochet! Our selective kindnesses sometimes do us in.

And finally, the biggest complaint the hostages have about their treatment is that they were held against their wishes and they often feared that something awful was going to happen to them. In general, however, they were not treated too badly. Not nearly as badly as the dissidents the Shah imprisoned and tortured.

So, I’m not against compensation. Let’s add them to the list and indulge in no end of suit and counter-suit and counter-counter-suit.

Afterthought

Part of the story you won’t hear anything about: the families of the victims of the Newtown Connecticut attack are all going to receive big checks from the government.

So, you think, that’s nice. The government stepped in and compensated people who were victims of serious crimes. This required legislation because there is no existing government policy of compensating victims of violent crime.

So when can the mother of Trayvon Martin expect her check?

Oh wait…