October 31, 2008
Let Them Eat Cake
The UK press has been reporting stories for some time regarding the mind boggling bonuses Wall Street firms are planning to bestow on their executives this year — this year. For whatever reason the U.S. media has pretty much ignored the situation though a recent item from Bloomberg is catching some attention. So let's be clear: the U.S. taxpayer rushes to bail out, among others, high-flying investment banks, the banks then turn around and plan to give tens of billions of dollars (at least) to their senior staff. It should almost go without saying, the very same senior staff that drove the firms into the ground in the first place. This, ladies and gentlemen, is what truly high class robbery looks like.
October 30, 2008
✘ EP for Obama ✘
It makes sense to vote for alternative, progressive candidates. Except when it doesn't. Given today's political reality, in states where the race is close a vote for any candidate other than Obama effectively counts as a vote for McCain. And despite the "not a dime's worth of difference" rhetoric from the Left in 2000, or the anti-Obama rhetoric from the Left today, no reasonable person should doubt that an Obama presidency will be dramatically superior to a McCain one. So what about a voter in a state where Obama has a lock — California, for example, or Washington DC? Wouldn't a "conscience" vote there make sense? It might, but here are a few reasons why it wouldn't.
October 28, 2008
A Small Brainstorm
So there I was the other night with insomnia, considering what ammunition for a rail gun of the future might look like. And it occurred to me, projectiles that move fast for great distances through the atmosphere must encounter friction drag in a similar way to that experienced by submarines, whales, or competitive swimmers. Why is it, then, that bullet casings, artillery shells, and even rocket cones are smooth? So here's an idea that may have some practical (though deadly) applications — my cursory searches of Google and the U.S. Patent and Trademark Office's database suggest it's an unknown idea that hasn't been patented: if any EP reader wants to spend a few hundred bucks trying to patent it, go right ahead, and if you later make millions licensing it to the military I'd appreciate a large donation.
The World's Best Potato Chip
When I was a kid in Brussels, one of my favorite foods was barbeque potato chips. Little did I realize at the time that the local chips represented perfection of the potato chip maker's art — later on I gradually lost my taste for barbeque potato chips and even sort of forgot why I'd enjoyed them so much in the first place. Other kinds of chips are OK, but for savory snacks I generally prefer popcorn or corn chips. Recently, however, on the shelves at the local Whole Foods I noticed a new product from Kettle chips, their "Backyard Barbeque" flavor, so out of curiosity I tried some. WOW! These chips are astoundingly delicious, perhaps even better than the wonderful chips I remembered. A perfect balance of spice, sweet, and heat. Like most Kettle chips they're cooked well done, which in this case is exactly right because the potato stands up to the spice. I have to be careful now, because I'll be buying two and three bags at a time... Highly recommended!
October 27, 2008
Nader Helps McCain
Recent polls put Nader at about 5% in Missouri. Though the election is more likely to be an Obama landslide than not it's still possible than in the electoral college map Missouri could be important. Why, then, is the Nader campaign bragging about how well it's doing in Missouri and a couple other swing states? Why isn't Nader spending his time in states that clearly won't matter in the presidential race but where building local progressive constituencies could be helpful? Because for Ralph Nader it's about his ego, not his policies — and perhaps, to be cynical about it, because he thinks a McCain victory best serves his interests. A vote for Nader at this point, anywhere, is utterly wasted.
October 25, 2008
Testing: One, Two, Three
Debunking another Foreign Policy Myth
By Werther*
In the 1980s, a favorite "just so" story that Air Force briefers at Strategic Air Command headquarters told to visiting politicians and VIPs posited that the Soviet politburo got a daily report from its intelligence chief. The Soviet briefing would begin as follows: "Not yet, comrades, today is not the day."
The upshot of SAC's scary anecdote was that the Soviet military and intelligence apparatus was primed, loaded, cocked, and with its index finger resting itchily on a hair trigger. The ordinary, day-to-day, default position of the Soviets, then, was to be instantly prepared to deliver a sneak attack on the U.S.; all this machinery merely waited for the signal that the West was momentarily snoozing to spring into devastating offensive action.
Military Reality TV
War gives you an adrenaline rush. Being shot at, hearing a bullet whistle close by, surviving. For as long as your body chemistry holds up it's a very intense life. I knew plenty of journalists in Bosnia who were war junkies, some less sensible than others. Some moved from war to war. NBC's Richard Engel is that type of journalist. The problem is he's too young, his judgment is lousy, and he gets other people killed. I was more than a little bothered by his reports last week from Afghanistan, embedded with Viper Company in the Korengal Valley.
October 22, 2008
Deleveraging
So the Congress starts shoveling money at Wall Street. As expected, the filthy rich begin to steal it — the Guardian reports that $70 billion will disappear in compensation at just a few firms (though this story seems speculative, lacking specifics, and incompletely sourced) — but I worry more about the part I don't understand. The derivatives. Everybody agrees that there are about $50 trillion (that's trillion, with a "t") in mortgage derivatives out there, perhaps a couple hundred trillion in other exotic derivatives. Does it make sense to pretend that none of that has any influence over normal financial assets? Is it possible that most of the money dumped at one end of Wall Street might be skimmed off at the other, through derivatives? I don't know, I'm just asking, since I don't see much if any serious talk about it. If an unwinding of derivatives positions requires a forced sale of other assets, as seems to be happening, it would make sense, as I've suggested a couple times already, for the government to freeze derivatives transactions until such time as there's adequate transparency and regulation in their market. Otherwise the bottom of this crash might well still be a long way off.
October 19, 2008
EP a Finalist for Podcast Awards ⊕ Please Vote Again!
For the second year in a row the EP Podcast is one of ten finalists in the political category of the Annual Podcast Awards competition. Yea! Thanks very much to everybody who voted to nominate EP, and I'm glad that the anonymous judges who sorted through all the nominations ranked EP as a finalist. Please note that this year the slate of finalists in the political category is extremely strong, including, among others, Rachel Maddow's show.
In the last phase of competition listeners — only listeners — choose the winners in each category. But what the organizers are trying to get at is listener interest and intensity, so the voting rules have changed a bit. When voting starts up again in 72 hours it will last for 15 days. During that time listeners will be able to vote for their choice of top podcast in each category once per day, every day. I reckon that if a couple hundred EP listeners vote for EP every day it might just be enough to win. And winning would help EP to grow and would help propagate the kind of thinking, the methods of thinking, that I keep pushing. Winning would, I hope, help produce a better society. So, please, and I know this is asking a lot, when voting starts up again take a minute every day to vote for EP. I really appreciate your help!
October 9, 2008
A Solution?
By Paul Craig Roberts
Readers have been pressing for a solution to the financial crisis. But first it is necessary to understand the problem. Here is the problem as I see it. If my diagnosis is correct, the solution below might be appropriate.
Let's begin with the fact that the financial crisis is more or less worldwide. The mechanism that spread the American-made financial crisis abroad was the massive US trade deficit. Every year the countries with which the US has trade deficits end up in the aggregate with hundreds of billions of dollars.
October 8, 2008
A Letter to Harper's
Recently Harper's posted on its website an essay from the May, 2005 issue, titled "Let there be markets: The evangelical roots of economics" by Gordon Bigelow. In it Bigelow writes "By the time the term 'economics' first emerged, in the 1870s, it was evangelical Christianity that had done the most to spur the field on toward its present scientific self-certainty." This is certainly an original and interesting interpretation of the intellectual history of economics but it exaggerates important points of fact and is profoundly misleading besides. I wrote a polite letter to Bigelow asking if he could direct me to relevant examples of the term "economics" in common usage in the 1870s, as I'm keenly interested in the subject of the term's origins, but got no reply. I then wrote to John R. MacArthur, Harper's publisher, to express my skepticism about the inclusive 1870s date and why it seems to me a question of some consequence. John kindly replied to tell me he'd forwarded my note to the Harper's letters editor. No word yet from her. At this point I realized I don't have to wait on Harper's but might as well make my case here, or what's a website for?
October 5, 2008
American Classic
Five of five stars. When Nobody's Fool came out in 1994 I saw it in a theater (that theater, as with many others in the neighborhood, now closed). It moved me greatly — to the point where my eyes teared up through most of it — and at the time I thought it was one of the finest films of its kind I'd seen, including in comparison with early film classics. I think it got OK reviews though whatever they were they're not easily found, if at all, through Google. Newman was nominated for an Oscar for Best Actor but didn't win. And Nobody's Fool never became recognized as a "great" film. Perhaps because it was decades ahead of its time.
The End of American Hegemony
By Paul Craig Roberts
America has become a pretty discouraging place. If Ronald Reagan was still with us, I wonder if he would again refer to the United States as a city on a hill, a light unto the world.
I think not. Reagan brought America back from discouragement, but it didn't stick. Subsequent administrations erased Reagan's accomplishments. Reagan defeated stagflation and ended the cold war, producing a peace dividend to be divided among taxpayers, social programs, and national debt reduction. However, without the Soviet Union as a check on neoconservative ambition, the neoconservatives launched America on an unrealistic path of world hegemony. The economic restoration that Reagan achieved was not shored up by his successors. Instead, they used the Reagan restoration to run the American economy into the ground in ways that benefited the super rich and the military-security complex. Some of America's best jobs were offshored in order to boost share prices and executive compensation, and the financial sector was recklessly deregulated.
October 4, 2008
Mr. Kingpin
Do you want a guy for president who would take multi-trillion dollar "throw of the dice" gambles with the economy? Do you want a guy who always lies about his corporate backing? Do you want a guy who would send the remaining good American jobs overseas? Do you want a guy who would create the worst economic collapse, ever, in American history? Do you want a guy who would get us into a new war with Iran? Do you want a guy who would — at a minimum — start a new Cold War with Russia? Do you want a guy — a guy who can't control his temper — who thinks nuclear wars are winnable? Do you want a guy who isn't happy unless he's in the middle of a crisis? Do you want a guy who thinks the world is secretly run by a group called the "Illuminati" and who's mad that he's never been asked to join? Do you want a guy who embraces evil to achieve power? No. Nobody does. And if we're lucky we won't get that guy. (One of the above I just made up.)
October 3, 2008
Presidential Debate Formats
Oh, well, Palin didn't implode. But a well-rehearsed regurgitation of talking points may not help the Republicans so much, either. What this debate suggests to me is that the Commission on Presidential Debates, which organized it, is stuck somewhere back in the 1980s. Janet H. Brown, executive director of the Commission, is actually a very nice lady. I've had several long conversations with her about politics while we walked our dogs in a local park, though I haven't seen her around recently. My sense is that she structures these things on the presumption of goodwill on the part of the candidates, e.g., that they will try to answer questions asked of them. That's something Palin explicitly (brazenly) didn't do. To be fair to the audience the moderators should work harder to force the candidates out of their comfort zones — hopefully the final two debates will better dispel the boilerplate.
October 1, 2008
Less Than Great Expectations
Turning to lighter matters, I'm astounded at all the commentary I see about how Sarah Palin has "experience" in political debates. That "experience" being, supposedly, before Alaskan audiences in her run for Governor and previously for Mayor. Not to unduly denigrate Alaska, but a national audience is not at all the same thing. It's sort of like comparing a cub scout softball league with World Series players. I predict Palin will turn in a catastrophically poor performance that does measurable damage to the McCain-Palin ticket. In that respect — i.e., of having mattered in the general election — it should be a unique entry in the annals of vice-presidential debates.
Financial Ghouls
One big problem with the bail-out that nobody talks about is, as Paul Craig Roberts puts it in my latest interview with him (which will be the EP podcast for October 10th), the money must be borrowed. And since the U.S. savings rate is zero or negative it must be borrowed from foreigners. The risk, then, is that by borrowing to bail out Wall Street we could damage our ability to continue such borrowing if the bail-out fails. That's worth taking a moment to think about because if the bail-out fails and if we can't continue borrowing from abroad (we need about a trillion dollars a year to finance our current account deficit), then we will have a general economic collapse à la Great Depression as U.S. consumption gets frozen in its tracks.
