The governor and the legislature obviously know that something bad is going to come out of Wednesday morning's update on the state's tax revenue forecast. They are already starting to ask agencies for suggestions for 5% reductions in their budgets for the current biennium. Since there are only a few months left, this is an impossible target. For the schools, with contracts in place for their expenses, it's not likely they can do anything at all.
So when the new estimate comes in, showing at least a billion dollars shortfall for the next biennium and enough damage for this one to wipe out the rainy day fund, there isn't much they will be able to do except spend it. They were already planning to spend the EFB (Ending Fund Balance) down to almost nothing, which means that the so-called rainy day fund was just the EFB. With the two combined reduced to almost zero, they will be legally obliged to super-balance the next biennium and restore some semblance of an EFB. So figure that the actual shortfall for 09-11 is already down a billion before it starts, and will be down two billion at least when the forecast comes in. When the forecast becomes realistic, which by policy in Oregon is always very and generally too late, it will be down three billion or more.
This is before considering the effect on costs of PERS. Maybe this time, we can collectively agree that making promises that oblige future generations is unethical, and that whatever money the current generation chooses to provide its public employees for their pensions should be given to them via 401(k) or whatever, at their own future risk entirely.
Sunday, November 16, 2008
Saturday, November 15, 2008
Another stimulus
W.C. Fields said, "If at first you don't succeed, try, try again. Then give up. No point being a damned fool about it." So on the basis, maybe we should give another shot of federal stimulus to the taxpayers a second chance.
But that's when it seems at least to make sense to begin with, which the theory behind the federal stimulus doesn't. John Maynard Keynes said many years ago that the most effective way for a government to stimulate was to spend. That guaranteed economic activity. If the same amount is simply passed back to the taxpayers, if they are frightened, many of them will just pocket it.
Keynesianism was born from the Great Depression and held sway in economics until around 1979. There is some talk that is has been embraced again in 2008, because governments are using tax money to try to avoid another depression. But they are doing it in a way that Keynes would have argued strongly against.
In fact, we've really already given the money-back-to-taxpayers strategy its best chance, with the Reagan and Bush tax cuts, which have eviscerated federal revenues over the past three decades. Part of Keyesianism is to put money away during good times, which is anathema to both right and left, it seems.
My guess is that there will be a further stimulus package and it won't stimulate much. What will happen when the dust settles and we're a couple trillion farther in debt, I have no idea.
But that's when it seems at least to make sense to begin with, which the theory behind the federal stimulus doesn't. John Maynard Keynes said many years ago that the most effective way for a government to stimulate was to spend. That guaranteed economic activity. If the same amount is simply passed back to the taxpayers, if they are frightened, many of them will just pocket it.
Keynesianism was born from the Great Depression and held sway in economics until around 1979. There is some talk that is has been embraced again in 2008, because governments are using tax money to try to avoid another depression. But they are doing it in a way that Keynes would have argued strongly against.
In fact, we've really already given the money-back-to-taxpayers strategy its best chance, with the Reagan and Bush tax cuts, which have eviscerated federal revenues over the past three decades. Part of Keyesianism is to put money away during good times, which is anathema to both right and left, it seems.
My guess is that there will be a further stimulus package and it won't stimulate much. What will happen when the dust settles and we're a couple trillion farther in debt, I have no idea.
Oil and Military Spending
The New York Times has just reported that Russia has backed off on its threat to expand its missile system provocatively close to the Baltic countries. The original threat was seen as a quick challenge to Obama, although he wasn't yet in office so he couldn't have responded. The withdrawal may be seen as an attempt to be conciliatory to him.
I see it as more likely a realization that it doesn't make political and economic sense. According to the CIA, Russia is still losing population. Its health care system is in tatters and men survive, on average, only to the age of 59.
Twenty-odd years ago, the USSR failed largely, according to myth, because they responded to the buildup of the U.S. military with spending on their own systems which they could not afford. I've always thought it interesting to think that, by ignoring the U.S. challenge and focusing instead on building what communist theory says they should have been building, they would have won the Cold War. That's the logic, but I don't quite believe it.
However, the Russians may be discovering that they have large civilian needs to meet and, what they could afford at $147/barrel of oil, they can't at $58. I expect Iran to ratchet down their pursuit of nuclear weaponry. I don't think this has anything to do with trying to act in harmony with Obama. It's the realization that international posturing won't matter if the mobs at home run you out of office.
I see it as more likely a realization that it doesn't make political and economic sense. According to the CIA, Russia is still losing population. Its health care system is in tatters and men survive, on average, only to the age of 59.
Twenty-odd years ago, the USSR failed largely, according to myth, because they responded to the buildup of the U.S. military with spending on their own systems which they could not afford. I've always thought it interesting to think that, by ignoring the U.S. challenge and focusing instead on building what communist theory says they should have been building, they would have won the Cold War. That's the logic, but I don't quite believe it.
However, the Russians may be discovering that they have large civilian needs to meet and, what they could afford at $147/barrel of oil, they can't at $58. I expect Iran to ratchet down their pursuit of nuclear weaponry. I don't think this has anything to do with trying to act in harmony with Obama. It's the realization that international posturing won't matter if the mobs at home run you out of office.
Friday, November 14, 2008
Who exactly are we bailing out in Detroit?
Understandably, the plan to bail out the Big Three has some formidable problems. First is that the $25 billion is probably three times the market value of the businesses. GM and Ford are worth about six billion and Chrysler can't be that hot itself.
When the CEO of GM said he just needed money to fill a gap, he said it was until 2010 when his UAW cost savings would kick in. Why 2010? We're not being asked to bail out GM, we're bailing out the UAW. Remember how they had this deal where if the economy slowed down, laid off workers got paid just like they were working?
The country is full of workers who have been displaced by the economy and who got no golden parachutes. Why tax money to make this happen for auto workers? I suggest we let them go bust, so they can start over. A new board, new management, and a new union contract. They can do all that without my money.
When the CEO of GM said he just needed money to fill a gap, he said it was until 2010 when his UAW cost savings would kick in. Why 2010? We're not being asked to bail out GM, we're bailing out the UAW. Remember how they had this deal where if the economy slowed down, laid off workers got paid just like they were working?
The country is full of workers who have been displaced by the economy and who got no golden parachutes. Why tax money to make this happen for auto workers? I suggest we let them go bust, so they can start over. A new board, new management, and a new union contract. They can do all that without my money.
Wednesday, November 12, 2008
Testing my Iraq Theory of Dividing the Oil Spoils
My theory that the relative calm in Iraq was the result of politicians realizing that there was too much money available at stake to waste time quarreling, is about to be tested. The price of oil is dropping so far so fast that the cash available to keep the typical Iraqi comfortable isn't going to be there.
There are some 25 million Iraqis, although a census now would be distorted by the number of refugees in other countries, and the daily oil production could be about 2.5 million bpd without much trouble. At $150, less $30 cost, that's $12 daily for every Iraqi. Most of that, of course, is siphoned off by corruption and mismanagement, but it's still enough that it could trickle down to the man on the desert fast enough to bring them all to the brink of the middle class, by Iraqi standards.
Knock $100 off that, and the post-cost figure is closer to $20, or $2/day. Now there isn't enough. The country can continue to do OK, but only if the 60% Shiite population agrees to stay economically marginalized. If the Kurds want the 40% that's in Kurdistan, the Shiites may want the balance that's in the south, leaving almost nothing for the Sunnis, who will then be forced to fight. That's been my theory.
The other possibility is that they are all just getting too tired of it all to go on fighting. We're coming up to six years. With luck, they have been pushed to the point that they just can't see why they benefit from more civil war. I hope so. One thing I share with the average Iraqi is the intense wish for the U.S. of A. to simply get the hell out of Iraq.
There are some 25 million Iraqis, although a census now would be distorted by the number of refugees in other countries, and the daily oil production could be about 2.5 million bpd without much trouble. At $150, less $30 cost, that's $12 daily for every Iraqi. Most of that, of course, is siphoned off by corruption and mismanagement, but it's still enough that it could trickle down to the man on the desert fast enough to bring them all to the brink of the middle class, by Iraqi standards.
Knock $100 off that, and the post-cost figure is closer to $20, or $2/day. Now there isn't enough. The country can continue to do OK, but only if the 60% Shiite population agrees to stay economically marginalized. If the Kurds want the 40% that's in Kurdistan, the Shiites may want the balance that's in the south, leaving almost nothing for the Sunnis, who will then be forced to fight. That's been my theory.
The other possibility is that they are all just getting too tired of it all to go on fighting. We're coming up to six years. With luck, they have been pushed to the point that they just can't see why they benefit from more civil war. I hope so. One thing I share with the average Iraqi is the intense wish for the U.S. of A. to simply get the hell out of Iraq.
Sunday, November 02, 2008
Time to Become a Republican Again
On Wednesday, I'm going to change my voter registration from independent to Republican. There's a measure on the ballot here in Oregon that would make it possible for me to vote in primaries, thus reducing the need to pick a party in order to have a say in who appears on the November ballots, but I'm going to switch anyway.
Frankly, I think the Republican Party is too important to be handed over to Sarah Palin and her ilk. After McCain loses, I expect those responsible to gain rather than lose influence, unless there's a counterattack. I'm sure that many of those who presently lead the Republican Party will be uncomfortable finding me within their fold. But it's mutual so that makes it fair.
I'm going to pick an issue to rally people around and it's going to be the "war on drugs." I just read an interesting comment about how it's going in Britain and it seems much the same as here. America's cost is pushing $200 billion a year, when you consider all the impacts. After nearly four decades, it has failed. Let's give it up.
Simply consider this alternative. All dangerous drugs are legal but regulated, taxed enough to pay for treatment, viewed as public health issues, and made the subject of unfavourable publicity. You become a drug criminal in the same way you become a booze criminal. It's illegal to sell to minors. It's illegal to hijack trucks filled with drugs, but then it's illegal to hijack trucks filled with Tootsie Rolls. If you treat drugs as health problems, there is very little to be unduly concerned about.
Which is different from being completely unconcerned. We tell people to fasten their seat belts, exercise, and cut down on fat. Employers pay uniform medical insurance whether or not we do these things. If we simply discourage drug use and treat addiction as a health issue, almost all the problems go away.
Frankly, I think the Republican Party is too important to be handed over to Sarah Palin and her ilk. After McCain loses, I expect those responsible to gain rather than lose influence, unless there's a counterattack. I'm sure that many of those who presently lead the Republican Party will be uncomfortable finding me within their fold. But it's mutual so that makes it fair.
I'm going to pick an issue to rally people around and it's going to be the "war on drugs." I just read an interesting comment about how it's going in Britain and it seems much the same as here. America's cost is pushing $200 billion a year, when you consider all the impacts. After nearly four decades, it has failed. Let's give it up.
Simply consider this alternative. All dangerous drugs are legal but regulated, taxed enough to pay for treatment, viewed as public health issues, and made the subject of unfavourable publicity. You become a drug criminal in the same way you become a booze criminal. It's illegal to sell to minors. It's illegal to hijack trucks filled with drugs, but then it's illegal to hijack trucks filled with Tootsie Rolls. If you treat drugs as health problems, there is very little to be unduly concerned about.
Which is different from being completely unconcerned. We tell people to fasten their seat belts, exercise, and cut down on fat. Employers pay uniform medical insurance whether or not we do these things. If we simply discourage drug use and treat addiction as a health issue, almost all the problems go away.
Sunday, October 19, 2008
Mugabe should read the Wall Street Journal
According to the AP, Robert Mugabe's party in Zimbabwe isn't about to bow to outside pressure. "They can't impose anything on us," they brag. Meantime, it is estimated that by early 2009, almost half the population will need food aid.
And where, pray tell, is that food going to come from? Perhaps from the people who produce a surplus beyond the food needs of their own people, many of them white. Such people are likely to get a little tired of being asked to save a people whose government denounces them incessantly for, pretty much, being white.
It's also going to become more difficult not to notice the obvious feedback loop facing anyone attempting to solve the food crisis in Zimbabwe. The reason the government is to keen in staying in power is that it is enormously profitable. There aren't a great many of them at the top, but they can extort money from anyone with hard currency who wants to help the people. This river of cash is what allows them to stay in power, oppress the people, destroy agriculture, and create the need for continued food assistance.
It's interesting to note the deep silence on Zimbabwe in the "progressive" press, compared with their concern over Darfur. In the Eugene Weekly, the acknowledged voice of the hard left in Eugene, Oregon, a Google search turns up more than 200 references to Darfur, and seven to "Mugabe," of which six refer to a local band.
It's not hard to understand their quandary. A couple of decades ago, the EW was probably full of approving comments about Robert Mugabe, a black leader, steeped in the tradition of Marxism, leading a government whose leaders called one another "comrade," and devoted to redistributing wealth so that landless blacks could get the prime farms "stolen" from them by the colonialists.
Now that the redistribution of wealth has run afoul of the related destruction of wealth, Mugabe has turned out to be a ruthless dictator, and the black-run governments of subsaharan Africa to be generally spineless, this is not a story that plays well. The Left seems to want America to jump into the mess in Darfur, with no clear idea how this is going to improve things. But not Zimbabwe, where the obvious question is going to be, why did we force Ian Smith to turn everything over to Mugabe?
And where, pray tell, is that food going to come from? Perhaps from the people who produce a surplus beyond the food needs of their own people, many of them white. Such people are likely to get a little tired of being asked to save a people whose government denounces them incessantly for, pretty much, being white.
It's also going to become more difficult not to notice the obvious feedback loop facing anyone attempting to solve the food crisis in Zimbabwe. The reason the government is to keen in staying in power is that it is enormously profitable. There aren't a great many of them at the top, but they can extort money from anyone with hard currency who wants to help the people. This river of cash is what allows them to stay in power, oppress the people, destroy agriculture, and create the need for continued food assistance.
It's interesting to note the deep silence on Zimbabwe in the "progressive" press, compared with their concern over Darfur. In the Eugene Weekly, the acknowledged voice of the hard left in Eugene, Oregon, a Google search turns up more than 200 references to Darfur, and seven to "Mugabe," of which six refer to a local band.
It's not hard to understand their quandary. A couple of decades ago, the EW was probably full of approving comments about Robert Mugabe, a black leader, steeped in the tradition of Marxism, leading a government whose leaders called one another "comrade," and devoted to redistributing wealth so that landless blacks could get the prime farms "stolen" from them by the colonialists.
Now that the redistribution of wealth has run afoul of the related destruction of wealth, Mugabe has turned out to be a ruthless dictator, and the black-run governments of subsaharan Africa to be generally spineless, this is not a story that plays well. The Left seems to want America to jump into the mess in Darfur, with no clear idea how this is going to improve things. But not Zimbabwe, where the obvious question is going to be, why did we force Ian Smith to turn everything over to Mugabe?
Wednesday, October 08, 2008
Do we speak English or that one?
It appears the John McCain has angered some people by his use of "that one" during the debate. To quote from an article on the subject:
Don Hammonds of The Pittsburgh Post-Gazette also took offence.
"Regardless of intent, it showed Senator McCain to be culturally ignorant, and completely unaware of the implications of what his off-the-cuff statement meant to people of colour," he wrote.
"Whether Senator McCain meant it that way or not, if you are a person of colour, and someone trots out the 'that one' remark, you instantly take it as racist. I know that I did."
OK, I'll bite. What are the implications to a person of color? These are two extremely common English words. I had never heard of them having racial overtones. "That?" "One?" Put together as "That one?"
It wasn't perfect style. The contrast should have been "Him and me," or "That one and this one," but instead he said first, "That one" and later "me." But apparently this transcends rhetorical style and reflects, somehow, on McCain's psyche.
In fact, it says nothing about him at all. It says much more about the people who have taken offense. McCain was indeed trying to show that Obama was the "risky" candidate but not because he is black. He's the Democrat. McCain would have tried the same tactic on Hillary. It's simply politics.
The word "racist" springs immediately to the lips of many people with holier-than-thou attitudes towards anyone they consider to be less sensitive. The effect has been to trivialize the word, and by extension the reality of racism. Kathleen Parker, who wrote in the Washington Post that, "McCain supporters have tried to explain what he meant, but there's a reason it was so stunning in the moment. I'm don't think it was racist, as some have argued. But it was objectifying. "That one" isn't the same as "that man." One is an object; the other is a person. A human being. 'That one' has a dehumanizing effect and one is right to recoil."
He used a freaking pronoun. What exactly does "objectifying" mean? A "dehumanizing effect?"
Obama wants the big one. Many people don't want him to get it, and would think so if he were defined by his 50% whiteness rather than his 50% blackness. They are not obliged to give him special treatment. I rather think Obama knew this going in, although his supporters don't. If you can't take the heat, get out of the kitchen.
Don Hammonds of The Pittsburgh Post-Gazette also took offence.
"Regardless of intent, it showed Senator McCain to be culturally ignorant, and completely unaware of the implications of what his off-the-cuff statement meant to people of colour," he wrote.
"Whether Senator McCain meant it that way or not, if you are a person of colour, and someone trots out the 'that one' remark, you instantly take it as racist. I know that I did."
OK, I'll bite. What are the implications to a person of color? These are two extremely common English words. I had never heard of them having racial overtones. "That?" "One?" Put together as "That one?"
It wasn't perfect style. The contrast should have been "Him and me," or "That one and this one," but instead he said first, "That one" and later "me." But apparently this transcends rhetorical style and reflects, somehow, on McCain's psyche.
In fact, it says nothing about him at all. It says much more about the people who have taken offense. McCain was indeed trying to show that Obama was the "risky" candidate but not because he is black. He's the Democrat. McCain would have tried the same tactic on Hillary. It's simply politics.
The word "racist" springs immediately to the lips of many people with holier-than-thou attitudes towards anyone they consider to be less sensitive. The effect has been to trivialize the word, and by extension the reality of racism. Kathleen Parker, who wrote in the Washington Post that, "McCain supporters have tried to explain what he meant, but there's a reason it was so stunning in the moment. I'm don't think it was racist, as some have argued. But it was objectifying. "That one" isn't the same as "that man." One is an object; the other is a person. A human being. 'That one' has a dehumanizing effect and one is right to recoil."
He used a freaking pronoun. What exactly does "objectifying" mean? A "dehumanizing effect?"
Obama wants the big one. Many people don't want him to get it, and would think so if he were defined by his 50% whiteness rather than his 50% blackness. They are not obliged to give him special treatment. I rather think Obama knew this going in, although his supporters don't. If you can't take the heat, get out of the kitchen.
Wednesday, October 01, 2008
In an election year, it's cut taxes and spend
The Senate has decided to upstage the House with its own version of the bailout, which is going to include tax breaks. So much for the notion that the crisis was going to impose a new fiscal discipline on America.
Granted the "tax cut" is a fix to the alternative minimum tax which was flawed when it was written because it wasn't indexed to inflation. Nevertheless, it adds more to the estimates of the federal deficit. For the moment, the feds have managed to create so much anxiety that everybody wants their debt, but if that ever changes, the U.S. government is just going to be a large scale version of Lehman Brothers.
Out here on the Oregon Coast, our little local governments have to keep expenses within revenues. Probably the same in Alaska. Maybe Palin has more credentials for running the national government than I've given her credit for.
Just kidding.
Granted the "tax cut" is a fix to the alternative minimum tax which was flawed when it was written because it wasn't indexed to inflation. Nevertheless, it adds more to the estimates of the federal deficit. For the moment, the feds have managed to create so much anxiety that everybody wants their debt, but if that ever changes, the U.S. government is just going to be a large scale version of Lehman Brothers.
Out here on the Oregon Coast, our little local governments have to keep expenses within revenues. Probably the same in Alaska. Maybe Palin has more credentials for running the national government than I've given her credit for.
Just kidding.
Tuesday, September 23, 2008
EmX doesn't really cost money, cuz its federal
On Sunday, Andy Vobora, a spokesman for the Lane Transit District wrote in the Register-Guard that the cost of new EmX bus station at Gateway was only $2 million and, most importantly, none of it was local money. It was being paid for by the federal government.
It's true in the sense intended, that the local transit budget is not being drained for pay for construction. But, just as all politics is local, so are excise taxes, and the federal dollars provided for mass transit are due to some driver filling up at some gas station. Or more accurately, it's a penny each from 200 million drivers, none of whom is specifically aware of the fact.
The same newspaper editorialized earlier that the impact of RideShare, which is LTD's program to provide public transit services to people who can't ride buses, should not fall on local taxpayers, even though the disabled are Lane County residents. Since the federal government noted the problem and required a solution, the argument goes, they should pay for it.
A reasonable idea on the assumption that the feds have unlimited cash. That seems to be the popular belief. It underlies the notion that we can run a trillion dollar deficit and it won't matter. The LTD money is a little different, since it comes from a designated source, but in fact that source is rapidly running out of cash. The treasury overall is broke and borrowing madly to cover Iraq and Wall Street, stealing the money that Social Security will need in future years for current consumption.
Foreigners are not amused. Which is too bad because we need $2 billion daily from them to stay afloat. The US dollar is in decline, and it has a lot farther to fall.
It's true in the sense intended, that the local transit budget is not being drained for pay for construction. But, just as all politics is local, so are excise taxes, and the federal dollars provided for mass transit are due to some driver filling up at some gas station. Or more accurately, it's a penny each from 200 million drivers, none of whom is specifically aware of the fact.
The same newspaper editorialized earlier that the impact of RideShare, which is LTD's program to provide public transit services to people who can't ride buses, should not fall on local taxpayers, even though the disabled are Lane County residents. Since the federal government noted the problem and required a solution, the argument goes, they should pay for it.
A reasonable idea on the assumption that the feds have unlimited cash. That seems to be the popular belief. It underlies the notion that we can run a trillion dollar deficit and it won't matter. The LTD money is a little different, since it comes from a designated source, but in fact that source is rapidly running out of cash. The treasury overall is broke and borrowing madly to cover Iraq and Wall Street, stealing the money that Social Security will need in future years for current consumption.
Foreigners are not amused. Which is too bad because we need $2 billion daily from them to stay afloat. The US dollar is in decline, and it has a lot farther to fall.
Impoverishment at the highest levels
It seems that one of the sticking points in our bailout of Wall Street is how much should we pay the bankers who come asking for help. John McCain is on record that bankers who ask for our tax money to get themselves out of their pickle should not expect to earn more than the highest paid person in the federal government. That being the President, who takes in $400,000 per year.
Secretary Paulson has responded that we can't make this work if we include "punitive" provisions like this. Punitive? There are no government employees in America, outside of college athletic coaches, earning that much. Are the banks pretending they couldn't get the talent they need? That you can't make ends meet, after years of 7 and 8-figure salaries, if you're reduced for one year to $400,000? Punitive?!
It should be clear now that the people running the financial world are not amazing geniuses. They just had really large sums of other people's money to gamble and, although they often did well, they once too often have done badly. They are probably reasonably bright and some of them may be good technicians, but they are not irreplaceable.
The free market advocates are all keen on Darwinian selection in the corporate world. Let's see it work. Let's see which banks are willing to throw some of their bloated executive salaries out in order to survive. Those that aren't, won't. Sounds good to me.
Secretary Paulson has responded that we can't make this work if we include "punitive" provisions like this. Punitive? There are no government employees in America, outside of college athletic coaches, earning that much. Are the banks pretending they couldn't get the talent they need? That you can't make ends meet, after years of 7 and 8-figure salaries, if you're reduced for one year to $400,000? Punitive?!
It should be clear now that the people running the financial world are not amazing geniuses. They just had really large sums of other people's money to gamble and, although they often did well, they once too often have done badly. They are probably reasonably bright and some of them may be good technicians, but they are not irreplaceable.
The free market advocates are all keen on Darwinian selection in the corporate world. Let's see it work. Let's see which banks are willing to throw some of their bloated executive salaries out in order to survive. Those that aren't, won't. Sounds good to me.
Saturday, September 20, 2008
A trillion here, a trillion there, and pretty soon ...
Older people will remember when Senator Everett Dirksen of Illinois said (or was supposed to have said): "A billion here, a billion there, pretty soon you're talking real money." We've moved into a new era; when we talk about government disasters, the unit is trillion rather than billion. First the Iraq War, now housing and mortgages.
The figure of 700 billion is now being used for the bailout of Wall Street, but these are always low ball at the outset. It comes on top of $200 billion for Fanny and Freddie, plus 85 further billskis for AIG, plus whatever for Bear Stearns and sundry. Detroit wanted 25 billion, but they now probably realize that such an amount is chump change in the new landscape of public subsidies.
The long term impact on America is going to be horrendous, as people with real economies decide that we are addicted to government spending without taxes and that the dollar will become, if not worthless, then greatly depreciated. This will be unfortunate, as the American economy depends on such people exchanging their own hard currencies for greenbacks still damp from the printing press, at a rate of some $2 billion daily.
In the short term, I can only predict that the Democrats will pile on, asking for more unemployment benefits and other middle-class benefits. Oh, and I think I can safely predict that no politician will suggest the anyone should actually pay for any of this with taxes.
The figure of 700 billion is now being used for the bailout of Wall Street, but these are always low ball at the outset. It comes on top of $200 billion for Fanny and Freddie, plus 85 further billskis for AIG, plus whatever for Bear Stearns and sundry. Detroit wanted 25 billion, but they now probably realize that such an amount is chump change in the new landscape of public subsidies.
The long term impact on America is going to be horrendous, as people with real economies decide that we are addicted to government spending without taxes and that the dollar will become, if not worthless, then greatly depreciated. This will be unfortunate, as the American economy depends on such people exchanging their own hard currencies for greenbacks still damp from the printing press, at a rate of some $2 billion daily.
In the short term, I can only predict that the Democrats will pile on, asking for more unemployment benefits and other middle-class benefits. Oh, and I think I can safely predict that no politician will suggest the anyone should actually pay for any of this with taxes.
Monday, September 08, 2008
Here's hoping Ike hits New Orleans
People are worried about Ike making landfall somewhere along the Gulf Coast. In general, this would be a bad thing but there's a possible silver lining. It might hit New Orleans and take the city out of its misery. It wouldn't need to be a direct hit, just something close enough to cause another evacuation and perhaps a minor breach of a levee.
It's not that I don't like New Orleans. On the contrary, I've been there, enjoyed myself, and look forward to a city named New Orleans, on essentially the present site, continuing long into the future. But the premises behind all reconstruction conversations I've heard are foolish.
Much of New Orleans lies below the level of the surrounding waters of the Mississippi River and Lake Pontchartrain. Until Katrina, it contained many poor people. Their homes have been devastated and now the theory seems to be that there should be some way in which New Orleans can be rebuilt so as to house a lot of poor people.
Sorry, but building a city below sea level is intrinsically expensive and nobody is going to do it on behalf of poor people. Nor should they. Many more poor people could be given decent housing elsewhere for the cost of doing so in New Orleans, assuming that the package included enough civil engineering to ensure that the new housing would not be flooded like the old.
The lowest portions of New Orleans should never be rebuilt. We should stop thinking of New Orleans in terms of the Florida Everglades and switch to Amsterdam or Venice. This is prime land for development, both residential and commercial, provided that some of it is moved up and surrounded by sturdy walls and the rest excavated to a level that would allow small craft to ply the newly created lakes and waterways.
This wouldn't be cheap, but we're the country that built the Grand Coulee Dam and this is certainly doable. And the result would be fabulously valuable. People will pay tons of money for waterfront, and New Orleans could have oodles of it.
What about the poor people? Well, what about the poor people? Is anyone building their housing today? Will they tomorrow? Let's get real, build subsidized housing somewhere on naturally-occurring dry land, and get over the sentimental attachment. Subsidence happens.
It's not that I don't like New Orleans. On the contrary, I've been there, enjoyed myself, and look forward to a city named New Orleans, on essentially the present site, continuing long into the future. But the premises behind all reconstruction conversations I've heard are foolish.
Much of New Orleans lies below the level of the surrounding waters of the Mississippi River and Lake Pontchartrain. Until Katrina, it contained many poor people. Their homes have been devastated and now the theory seems to be that there should be some way in which New Orleans can be rebuilt so as to house a lot of poor people.
Sorry, but building a city below sea level is intrinsically expensive and nobody is going to do it on behalf of poor people. Nor should they. Many more poor people could be given decent housing elsewhere for the cost of doing so in New Orleans, assuming that the package included enough civil engineering to ensure that the new housing would not be flooded like the old.
The lowest portions of New Orleans should never be rebuilt. We should stop thinking of New Orleans in terms of the Florida Everglades and switch to Amsterdam or Venice. This is prime land for development, both residential and commercial, provided that some of it is moved up and surrounded by sturdy walls and the rest excavated to a level that would allow small craft to ply the newly created lakes and waterways.
This wouldn't be cheap, but we're the country that built the Grand Coulee Dam and this is certainly doable. And the result would be fabulously valuable. People will pay tons of money for waterfront, and New Orleans could have oodles of it.
What about the poor people? Well, what about the poor people? Is anyone building their housing today? Will they tomorrow? Let's get real, build subsidized housing somewhere on naturally-occurring dry land, and get over the sentimental attachment. Subsidence happens.
Saturday, September 06, 2008
The Real Message about McCain and Palin
I don't normally pay much attention to Andrew Sullivan but his comments on Sarah Palin, coming from a conservative, are on point. It's not whether Sarah Palin actually will ever turn out to have the talent for the job. It's that nobody has any reason to believe she does. We'll skip the fact that there are reasons for a progressive, or just somebody who thinks teen pregnancy is not a desiderata, to be actively skeptical. Even those who think she may pan out must admit that she hasn't proven anything. Yet, the GOP has nominated her to be VP. For no reason except that a large portion of their followers, who vote based on litmus tests rather than ability, love the idea.
Sitting out here in Florence, on the Oregon Coast, I have come to know a number of elected city officials. We have about the same population as Wasilla AK. I like these guys, but I wouldn't nominate any of them to be President of the United States.
And governor of Alaska? That's been for 20 months. When you're an executive, you make decisions and time tells whether they were right. There hasn't been enough time. Alaska has a budget surplus and worries mostly about who to give it away to, although they are not shy about asking the lower 48 to subsidize them. Put simply, there has been nearly nothing about her resume that demonstrates her ability to handle the job she's running for.
So first, it's scary that McCain might croak and she'd replace him. Then it's scary that he might not and this is the sort of considered judgment we can expect from him. Either way, it's Obama '08.
Sitting out here in Florence, on the Oregon Coast, I have come to know a number of elected city officials. We have about the same population as Wasilla AK. I like these guys, but I wouldn't nominate any of them to be President of the United States.
And governor of Alaska? That's been for 20 months. When you're an executive, you make decisions and time tells whether they were right. There hasn't been enough time. Alaska has a budget surplus and worries mostly about who to give it away to, although they are not shy about asking the lower 48 to subsidize them. Put simply, there has been nearly nothing about her resume that demonstrates her ability to handle the job she's running for.
So first, it's scary that McCain might croak and she'd replace him. Then it's scary that he might not and this is the sort of considered judgment we can expect from him. Either way, it's Obama '08.
Wednesday, September 03, 2008
Sarah Palin is not riveting
Writing for Newsweek, Howard Fineman suggests that Sarah Palin's performance tonight will be riveting, because we'll have a complete unknown in a situation where she will sink or swim and nobody knows what to expect.
I know what to expect. She'll be coached that she doesn't need to capture the right wing, which is hers already, so she'll use the opportunity to talk about silly things and make herself more human and appealing. None of this will have any real bearing on her ability to lead the world's largest economy, nor will it truly reflect anything that would be likely to result from her eventually becoming president. Remember the W. ran as a compassionate conservative, only to turn out in reality to be just another frothing-at-the-mouth fascist. Likewise the lovely Sarah, regardless of what sugar-coating she applies to her scanty resume in the speech.
Someone has remarked that Ms Palin is probably the first national candidate ever to know how to dress a moose. I can't speak specifically about moose, but I'll wager that some of the early 19th century candidates knew how to handle a knife to dress game. It was once an important qualification for dealing with life.
She may, however, be the first candidate for national office for whom that ability ranks high on the list of qualifications to hold the office.
I know what to expect. She'll be coached that she doesn't need to capture the right wing, which is hers already, so she'll use the opportunity to talk about silly things and make herself more human and appealing. None of this will have any real bearing on her ability to lead the world's largest economy, nor will it truly reflect anything that would be likely to result from her eventually becoming president. Remember the W. ran as a compassionate conservative, only to turn out in reality to be just another frothing-at-the-mouth fascist. Likewise the lovely Sarah, regardless of what sugar-coating she applies to her scanty resume in the speech.
Someone has remarked that Ms Palin is probably the first national candidate ever to know how to dress a moose. I can't speak specifically about moose, but I'll wager that some of the early 19th century candidates knew how to handle a knife to dress game. It was once an important qualification for dealing with life.
She may, however, be the first candidate for national office for whom that ability ranks high on the list of qualifications to hold the office.
Tuesday, September 02, 2008
Appalachia, the Ozarks, and evidently Alaska
Levi Johnston's mom, commenting on the marriage plans of the children, said that they had planned to get married all along and that the pregnancy was a "bonus."
There are certain attitudes towards life that we have come to identify, fairly or unfairly, with hillbillies. Mrs. Johnston shows that they are alive and well in Alaska. Levi, a fine strapping youth, is not evidently attending high school. His mother says she doesn't know whether he graduated. We deduce that he's not planning on college. Apart from hockey, there's no evidence of an ability to support a wife. Yet he will be trotted out in St. Paul at the convention for everyone to cheer.
The Republicans must be just busting their buttons with pride.
There are certain attitudes towards life that we have come to identify, fairly or unfairly, with hillbillies. Mrs. Johnston shows that they are alive and well in Alaska. Levi, a fine strapping youth, is not evidently attending high school. His mother says she doesn't know whether he graduated. We deduce that he's not planning on college. Apart from hockey, there's no evidence of an ability to support a wife. Yet he will be trotted out in St. Paul at the convention for everyone to cheer.
The Republicans must be just busting their buttons with pride.
Sarah Palin is the .... Words fail me.
It seems that Sarah Palin's problems are all due to the liberal media. Reminds me of the line, that no girl ever got pregnant from reading a book. It seems to me that Bristol Palin didn't get pregnant from watching CNN. However, more relevantly, she may have got pregnant because in the Palin family nobody talks about how to avoid pregnancy and in schools in Alaska, if it happens, it happens against the opposition of Sarah Palin and her ilk.
I wasn't going to get involved. I was just going to write in Paris Hilton and let it go. It seemed like I could handle either candidate and with neither candidate saying anything I particularly liked with respect to war, this was going to be one that I could sit out.
Not anymore. Sarah Palin opposes everything I believe, which is that the world needs to be managed on the basis of evidence. She's George W. Bush without the deep intellect. There aren't a lot of people that I would not be happy to take over the White House after W. but given the decent statistical prospect that if we elect McCain, it will be her in less than four years, I find her frightening. What are we frightened of, the right wing asks querulously. You wouldn't understand, I reply. I'm sending a check to Obama.
I wasn't going to get involved. I was just going to write in Paris Hilton and let it go. It seemed like I could handle either candidate and with neither candidate saying anything I particularly liked with respect to war, this was going to be one that I could sit out.
Not anymore. Sarah Palin opposes everything I believe, which is that the world needs to be managed on the basis of evidence. She's George W. Bush without the deep intellect. There aren't a lot of people that I would not be happy to take over the White House after W. but given the decent statistical prospect that if we elect McCain, it will be her in less than four years, I find her frightening. What are we frightened of, the right wing asks querulously. You wouldn't understand, I reply. I'm sending a check to Obama.
Sunday, August 10, 2008
Betrayal in Zimbabwe
The Voice of America reports that supporters of Mugabe's opposition in the spring elections now fear they will be betrayed in the negotiation process.
Of course, they will be betrayed. These are "negotiations" with Robert Mugabe, who only sits at the table because he waged war on his people in order to steal the election results. The people behind him need to keep control in order to continue to steal the small amount of hard currency that the economy generates. It's a small amount compared with the 12 million or so citizens (hard to say who lives there since so many have fled), but it's enough to keep a handful of powerful and ruthless men living in great personal wealth. Negotiations with them mean sharing this crime. It certainly doesn't mean bringing to Zimbabwe a government that will be sensitive to their needs and will try to restore the economy.
There is no government bureaucracy to speak of in Zimbabwe, just a kleptocracy. This will not change as a result of negotiations that include ZANU-PF.
Of course, they will be betrayed. These are "negotiations" with Robert Mugabe, who only sits at the table because he waged war on his people in order to steal the election results. The people behind him need to keep control in order to continue to steal the small amount of hard currency that the economy generates. It's a small amount compared with the 12 million or so citizens (hard to say who lives there since so many have fled), but it's enough to keep a handful of powerful and ruthless men living in great personal wealth. Negotiations with them mean sharing this crime. It certainly doesn't mean bringing to Zimbabwe a government that will be sensitive to their needs and will try to restore the economy.
There is no government bureaucracy to speak of in Zimbabwe, just a kleptocracy. This will not change as a result of negotiations that include ZANU-PF.
Friday, August 08, 2008
The Edwards Affair
It appears that Senator John Edwards had an affair a couple years ago. I see three lessons from this.
One is that powerful men attract good looking women and, when temptation presents itself, are generally unable to resist. Our political system would be much better if we simply acknowledged this fact and left it between husband and wife to sort out in whatever manner they prefer. The Edwardses seems to have done so, and it's not clear why it's anyone else's business.
Two is that men will always lie (or at a minimum, prevaricate) when first confronted, hoping that the evidence will turn out to be insufficient. This means that when a man denies having had an affair, it is not newsworthy and should not be reported. If he confesses, that's unusual enough to merit attention, but denial definitely falls in the "dog bites man" category.
Third is that those who most strongly denounce the moral turpitude of philanderers are fully as likely as the rest of the crowd to be doing so already, or to do so in the future. John Edwards is just one more example. There should be a similar rule to that above. When a politician decries the immorality of another, it is meaningless and should be ignored by the press.
Of course, none of this is going to happen. Men will be caught in sex "scandals," which in mature societies would simply be ignored, and the press will hound them. They will deny everything. Eventually they will be unable to wriggle free and they will issue some mea culpa. Other prominent men will pontificate, although they are probably banging their secretaries. It's boring, really.
One is that powerful men attract good looking women and, when temptation presents itself, are generally unable to resist. Our political system would be much better if we simply acknowledged this fact and left it between husband and wife to sort out in whatever manner they prefer. The Edwardses seems to have done so, and it's not clear why it's anyone else's business.
Two is that men will always lie (or at a minimum, prevaricate) when first confronted, hoping that the evidence will turn out to be insufficient. This means that when a man denies having had an affair, it is not newsworthy and should not be reported. If he confesses, that's unusual enough to merit attention, but denial definitely falls in the "dog bites man" category.
Third is that those who most strongly denounce the moral turpitude of philanderers are fully as likely as the rest of the crowd to be doing so already, or to do so in the future. John Edwards is just one more example. There should be a similar rule to that above. When a politician decries the immorality of another, it is meaningless and should be ignored by the press.
Of course, none of this is going to happen. Men will be caught in sex "scandals," which in mature societies would simply be ignored, and the press will hound them. They will deny everything. Eventually they will be unable to wriggle free and they will issue some mea culpa. Other prominent men will pontificate, although they are probably banging their secretaries. It's boring, really.
Saturday, August 02, 2008
Ivins, Anthrax, and Guarding Tess
Everybody remembers the resourceful Secret Service agent Doug Chesnic shooting the weasly chauffeur in Guarding Tess, thereby forcing him to reveal the location where Tess was being held? It all worked out fine, but remember what the chauffeur had said a few minutes earlier? I don't remember the exact words, but the gist was, "I know how this works. You people have to pin this on somebody and that person doesn't have to be guilty."
In the movie, of course, it worked out marvelously because he was guilty. But if he hadn't been? Then agent Chesnic of the federal government would have left him unable to walk without a limp for the rest of his life. He was already in a hospital, so I'm assuming he wouldn't have died.
The real FBI is much more cautious. I doubt that any agent would risk his career to go outside policy in the defense of a third party. But it's reason to wonder, as you think about the suicide of Dr. Bruce Ivins in connection with the anthrax letters case. Not having found the guilty party in such a high profile crime was obviously a stain on the agency's reputation. Six years on and they didn't have an indictment. This guy looked like their best hope.
So they searched his place twice, his computer once, and kept him constantly under surveillance by obvious agents for a year. Let's suppose for a minute that he was everything he said he was. A faithful government employee, a church-going Christian, active in his community, devoted to science. And the FBI spends half a decade putting his existence under an unrelenting microscope. Some of us might crack.
Years ago, I had a much higher opinion of government and this line of reasoning would have seemed outrageous, but after six years, if you haven't got an indictment you have a weak case. Nevertheless, the FBI has its desired outcome. They can reveal that they were close to an indictment, which is a couple of steps from a conviction but sufficient for the popular imagination. They wanted him dead. He's dead. They didn't actually have to shoot him. Pretty neat.
In the movie, of course, it worked out marvelously because he was guilty. But if he hadn't been? Then agent Chesnic of the federal government would have left him unable to walk without a limp for the rest of his life. He was already in a hospital, so I'm assuming he wouldn't have died.
The real FBI is much more cautious. I doubt that any agent would risk his career to go outside policy in the defense of a third party. But it's reason to wonder, as you think about the suicide of Dr. Bruce Ivins in connection with the anthrax letters case. Not having found the guilty party in such a high profile crime was obviously a stain on the agency's reputation. Six years on and they didn't have an indictment. This guy looked like their best hope.
So they searched his place twice, his computer once, and kept him constantly under surveillance by obvious agents for a year. Let's suppose for a minute that he was everything he said he was. A faithful government employee, a church-going Christian, active in his community, devoted to science. And the FBI spends half a decade putting his existence under an unrelenting microscope. Some of us might crack.
Years ago, I had a much higher opinion of government and this line of reasoning would have seemed outrageous, but after six years, if you haven't got an indictment you have a weak case. Nevertheless, the FBI has its desired outcome. They can reveal that they were close to an indictment, which is a couple of steps from a conviction but sufficient for the popular imagination. They wanted him dead. He's dead. They didn't actually have to shoot him. Pretty neat.
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