Archive for October 2012

Prog Rock

I am always hesitant to recommend bands I have just discovered, at the risk of demonstrating my complete ignorance of a band everyone else has heard of.  "Hey, have you ever heard of these Led Zeppelin guys...."

Anyway, at the risk of such an outcome, I was searching for some 70's/80's style prog rock and found a band called The Mystery.  Prog rock fans might check them out if I am not the last person on Earth to hear of them.  Just as a taste calibration, I like a lot of different music but early Genesis and in particular the live album Seconds Out are among my favorites.

I am just emerging from a fairly obsessive phase over the last few weeks listening to Dream Theater and the related Liquid Tension Experiment almost to the exclusion of all else.

Prior to that I was digging through the John Petrucci and Al Di Meola catalogs.  Also exploring Steven Wilson at the recommendation of a reader.


From the AZ Republic

A Flagstaff police officer who used his baton, boot and a cable to kill an injured dog after a fellow officer accidentally hit the animal with his car in August will not face criminal charges, according to the Navajo County Attorney’s Office.


Tewes was called after another officer hit a loose dog with his car Aug. 19. Tewes and the other officer decided the dog needed to be euthanized, but Tewes was concerned about using his gun in the neighborhood.

According to a Coconino County sheriff’s investigative report, Tewes repeatedly tried to bludgeon the dog to death, but it didn’t die. He then tried to jump on the dog’s head and cave in its skull, but that also didn’t kill the animal. Eventually, after some 20 to 30 minutes of trying to kill the dog, he used a hobble, which is like a metal cable, to try to strangle the dog. It took several tries before the dog died.

We give police officers unique and dangerous powers and authority.  It is amazing the poor judgement of the people we so entrust.

My Current Favorite Non-Profit

The Institute for Justice, or IJ.  The do great work.  What the ACLU should have been if it wasn't founded by Stalinists.  Check out this aggravating example:

Imagine you own a million-dollar piece of property free and clear, but then the federal government and local law enforcement agents announce that they are going to take it from you, not compensate you one dime, and then use the money they get from selling your land to pad their budgets—all this even though you have never so much as been accused of a crime, let alone convicted of one.”

That is the nightmare Russ Caswell and his family is now facing in Tewksbury, Mass., where they stand to lose the family-operated motel they have owned for two generations.

The most contentious civil forfeiture fight in the nation will be the subject of a week-long trial starting Monday, November 5, 2012, in Boston. Throughout the week, the Institute for Justice, which represents the property owners in the case, will expose the ugly practice of civil forfeiture—where law enforcement agencies can pad their budgets by taking property from innocent owners who have never been convicted or even charged with a crime.


Does This Make A Lick of Sense? Wikipedia Says No Inflation Risk in QE3

I know, I know -- this is Wikipedia.  But there is a line there in the quantitative easing article that makes even less sense than other political topics at that site:

It should be noted that mortagage-backed securities such as are being purchased as part of the QE3 program are not based on liquid assets, and their purchase [by the Fed] does not entail inflation risks

This makes zero sense to me.  But maybe I am missing something.

First, I don't understand why the fact that the assets purchased with the printed money are liquid or not liquid.  If anything, I would have assumed that purchasing less liquid assets would have more inflation risk than the other way around.  If one puts more currency into the economy, the more currency-like the asset one pulls off the market, ie the more liquid, the less the inflation risk, I would have thought.

Second, while mortgages may not be liquid, mortgage-backed securities are very liquid.  If liquidity of the asset matters here, I am not sure why the underlying asset would matter as much as the asset itself being purchased.   I mean, by this metric, treasuries are based on a really, really illiquid asset, simply the full faith and credit of the US government.

Third, printing of money would seem to always have inflation risk, no matter what the government is purchasing with the still-wet dollars.  (yeah, I know, it's all digital).

I Don't Get It

I refuse to follow the ins and outs of polls and the horserace aspects of elections.  But I couldn't miss all the blog activity that somehow Nate Silver is purposefully corrupting his election predictions for some partisan reason.

A physics professor once used to tell us that if we don't even know the sign of the answer, then we should assume we have no understanding of what is going on.  Well, I don't even know the sign of the answer here.  Would a partisan inflate Obama's predicted chances of winning, thus giving him some sort of momentum?  Are there voters who just want to be on the winning side and vote on election day for whomever they think is going to win?  Or would a partisan make his man look worse in order to panic the base and make sure they get out and vote?

Killing Mainstreet Banks

C. Boyden Gray and Adam White make the case that Dodd-Frank is an enormous gift to big banks, for two reasons:

  • By putting large banks in a special class -- essentially too big to fail -- it ensures that these banks will be able to raise capital far more easily than can smaller banks, since investments in larger banks are essentially guaranteed by the US government.  This is the same mechanism by which Fannie and Freddie crowded out most other sources of mortgage financing.
  • By creating an enormous mass of new regulations, large banks get a cost advantage because they can much more easily pay these fixed costs as they are amortized over a much larger business.

Obama's Total Failure

Forget about the economy -- libertarians expect Democrats to be horrible statists in economic matters.  But we hope to get some protection of civil liberties in exchange.  But Obama has been simply awful in this area as well -- prosecuting marijuana sellers that are legal under state law, claiming assassination powers, the drone war, wiretapping, failure to address gay marriage, etc.

Here is but one example - the Orwellian defense of warrantless wiretapping.  You can't sue us unless we tell you there is a wiretap, and we are not going to tell you.

As part of its concerted campaign to prosecute whistleblowers and to classify state secrets, the Obama administration has taken a position in Clapper that makes the Bush administration pro-secrecy campaign seem pale in comparison: namely, that no one can challenge warrantless surveillance unless the government tells you in advance that you’re being surveilled—which national security interests prevent it from doing. When Bush administration offered milder versions of the same arguments, the civil liberties community rose up in protest. Verrilli, for his part, was met by vigorous skepticism from the Supreme Court’s liberal justices.

It’s unfortunate enough that the administration asked the Court to hear the surveillance case in the first place, after the U.S. Court of Appeals for the Second Circuit had ruledthat the plaintiffs —lawyers and human rights and media organizations whose work requires them to communicate with clients, sources, and victims of human rights abroad—had legal standing to bring the case. Although they couldn’t be 100 percent sure that their telephone communications were being monitored, the appellate held that there was a “realistic danger” that their telephone communications were being monitored under the FISA Amendments Act of 2008 (FAA), passed by Congress to codify some of the worst excesses of the Bush administration’s warrantless wiretapping program. This led the journalists and lawyers to suffer tangible injuries—such as having to fly to the Middle East to communicate with clients rather than talking by telephone, for example, or being more circumspect in talking to Middle Eastern sources, as journalists such as Naomi Klein and Chris Hedges alleged.

In his Supreme Court brief and in the oral argument yesterday, however, Verrilli alleged that these harms were too speculative to create legal standing to challenge the law, since the lawyers and journalists couldn’t be sure they were being surveilled under the FAA rather than under some other warrantless wiretapping authority. Essentially, the Obama administration was arguing that targets of surveillance could only challenge the law after they knew they were being surveilled, though the government would never tell them they were being surveilled before bringing a case against them.

I am sure we would all like a ruling that we cannot be sued unless we give the plaintiff permission to do so, essentially what the Obama Administration is claiming here.

Update:  From the Washington Times:

Bloomberg News reported on October 17 that Attorney General Eric Holder “prosecuted more government officials for alleged leaks under the World War I-era Espionage Act than all his predecessors combined, including law-and-order Republicans John Mitchell, Edwin Meese and John Ashcroft.” :

The Justice Department said that there are established avenues for government employees to follow if they want to report misdeeds. The agency “does not target whistle-blowers in leak cases or any other cases,” Dean Boyd, a department spokesman, said.“An individual in authorized possession of classified information has no authority or right to unilaterally determine that it should be made public or otherwise disclose it,” he said.

However, when leaks to the press benefit the administration, prosecutions from the Jusitce Department are absent. For example, AG Holder was not prosecuting anyone over who leaked information about the killing of Oasma bin Laden. The Justice Department has yet to charge anyone over leaking information regarding the U.S. involvement in cyberattacks on Iran as well as an al Qaida plan to blow up a U.S. bound airplane. In fact, the Justice Department ended up appointing one of two attorneys to the cyberattacks investigation who was an Obama donor.

Part of the problem is that if this (or any other) Administration has its way, information that embarrasses the Administration get's classified, on the dubious logic that embarrassing the Administration embarrasses America.  With this definition, all whistle-blowing becomes "espionage".

Update 2:  More on Wiretapping from the EFF

To the contrary, there’s no indication that the still-active warrantless wiretapping program—which includes a warrantless dragnet on millions of innocent Americans’ communications—has significantly changed from the day Obama took office. With regard to the FISA Amendments Act, the Obama Administration has actively opposed all proposed safeguards in Congress. All the while, his Administration has been even more aggressive than President Bush in trying to prevent warrantless wiretapping victims from having their day in court and hascontinued building the massive national security infrastructure needed to support it. ...

Some have suggested it’s possible when Obama said “safeguards” on the Daily Show, he is referring to some unspecified secret administrative rules he has put into place. Yet if these “safeguards” exist, they have been kept completely secret from the American public, and at the same, the administration is refusing to codify them into the law or create any visible chain of accountability if they are violated. But given the ample evidence of Constitutional violations since Obama took office (see: herehere, and here), these secret safeguards we don’t know exist are clearly inconsequential.

Just in Time for Star Wars 7....

...awesome Star Wars apparel.

PS1:  For some reason they STILL are not talking about doing the movie I think would be a layup to make awesome - Han and Chewie, the early years.  Meeting each other, smuggling, adventures, winning a starship from the only black man in the universe.

PS2:  The Star Wars prequel trilogy are really beautiful to watch, but horrendous as movies in large part because the dialog is so freaking awful.  I think someone should try to dub them with better dialog.

Lernaean Hydra

I continue to be dumbfounded by the Obama Administration's escalating drone war in Pakistan and other nations.  On the one hand, we have a President who argued persuasively that our war on terror, by its ham-handedness, was actually creating more terrorists than it eliminated by giving people more reasons to hate America.  On the other hand, we have the exact same administration  escalating Bush's drone war by a factor of six.  The same children of the sixties that likely marched against the bombings in Cambodia are now bringing random, robotic death from the sky to countries we have not actually declared war on.  

Washington Postinvestigative report published last week raises questions about whether bureaucratic "mission creep" has cut the program loose from its original justification. "Obama has institutionalized the highly classified practice of targeted killing," the Post's Greg Miller writes, "transforming ad-hoc elements into a counterterrorism infrastructure capable of sustaining a seemingly permanent war." He reports "broad consensus" among Obama terror-warriors that "such operations are likely to be extended at least another decade."

I could be convinced to use drones to knock off a few top managers with irreplaceable impact on the war, sort of like taking out Patton or Rommel in WWII.  But now we are taking out corporals, or the terrorist equivalent.    And ever time we kill one (with a few innocents thrown in the mix, which Obama has relabeled as combatants by definition)  we are probably creating two new terrorists.

This targetted killing is an expansive and scary new power.  The Administration owes us a reckoning, a justification which demonstrates that these drone strikes are really having some sort of positive effect.  Right now, it is hard to see, with Libya, Mali, Egypt, Syria blowing up and Afghanistan no closer to peace than it was four years ago.  What are we getting in exchange for president taking on this dangerous new authority?

PS-  the report linked notes that the death toll from drone attacks is approaching 3,000.  What happened to the press, which was so diligent about reporting all these grim milestones under Bush.  It is just amazing how far the press and the Left have gone in the tank, against their stated ideals, for Obama.

Update:  Killing of 16-year-old American in drone strike blamed on his ... having a bad father.  It was his fault!

ADAMSON: You said it is important for the president to do what needs to be done in terms of members of al Qaeda and people who pose a threat. Do you think that the killing of Anwar al-Awlaki’s son who is an American citizen is justifiable?

GIBBS: I’m not going to get into Anwar al-Awlaki’s son. I know that Anwar al-Awlaki renounced his citizenship…

ADAMSON:…His son was still an American citizen…

GIBBS:…Did great harm to people in this country and was a regional al Qaeda commander hoping to inflict harm and destruction on people that share his religion and others in this country. And…

ADAMSON:…It’s an American citizen that is being targeted without due process, without trial. And, he’s underage. He’s a minor.

GIBBS: I would suggest that you should have a far more responsible father if they are truly concerned about the well being of their children. I don’t think becoming an al Qaeda jihadist terrorist is the best way to go about doing your business. [emphasis added]

And this practically qualifies as Nixonian:

ROBERT GIBBS, Obama advisor: This president has taken the fight to Al Qaeda.

LUKE RUDKOWSKI, We Are Change: Does that justify a kill list?

GIBBS: When there are people who are trying to harm us and have pledged to bring terror to our shores, we have taken that fight to them.

RUDKOWSKI: Without due process of law?

GIBBS: We have taken that fight to them.

Update 2:  here is an interesting quote

Counterterrorism experts said the reliance on targeted killing is self-perpetuating, yielding undeniable short-term results that may obscure long-term costs. 'The problem with the drone is it’s like your lawn mower,' said Bruce Riedel, a former CIA analyst and Obama counterterrorism adviser. 'You’ve got to mow the lawn all the time. The minute you stop mowing, the grass is going to grow back.'"


Trapped Into Civic Participation, and A Note on Labor Mobility

Up until now, I had never know that there was actually a theory, propounded by people with a straight face, that trapping people in neighborhoods and institutions (like public schools) is a positive because it promotes civic virtue.  

If you own your home, then a lot of your wealth is tied in with the quality of your neighborhood. In theory, this should motivate you to vote more carefully in local elections. On the other hand, if you are a renter, and the neighborhood goes downhill, you will simply leave.

Collectivists prefer to trap households within specific government service areas. Their thinking is that with the “exit” option foreclosed, households will be forced to exercise their “voice” option, to everyone’s benefit. This is an argument against private schools. It goes back at least as far as A.O. Hirschman’s classic book, Exit, Voice, and Loyalty.

I would argue just the opposite, that this creates state monopolies ripe for abuse, and besides, is disastrous for labor mobility and thus the healthy functioning of labor markets.  People keep arguing that this recession is long because recessions after financial bubbles are always long.  I am not sure that is proven out by history.

I would argue a big reason this recession is long is that the nature of this bubble, being in housing markets, short-circuited one of the ways we get out of recessions, which is labor mobility.   Trapped in homes the government encouraged them to buy but now they cannot sell, people can't move to find new regional opportunities.  Where are the mass migrations to the North Dakota oil fields?

Why Re-importation Won't Lower Prices

Just the other day I was making the point that reimporting pharmaceuticals from other countries where they are sold cheaper is not any sort of long-term solution to bringing down US drug costs.  Sure, it's frustrating that the US pays almost all of the fixed cost of drug development while other countries get these drugs closer to marginal cost.  But there is no solution to this that has everyone paying marginal cost -- unless, that is, we are willing to give up on all future drug development by sending the signal that these costs can no longer be recovered in market pricing.   All drug reimportation will do is raise the overseas cost of pharmaceuticals and hurt millions of poorer people.

I always find it ironic that drug reimportation is a favorite solution of many liberals, who are absolutely offended at paying higher costs in the US than what is paid in other countries.  Well, welcome to being rich.  You may think you are safely not-rich when you are advocating various soak-the-rich tax policies, but on an international scale, even many of America's bottom quartile would be considered well-off in poorer nations.  Compared to the US, even countries like France are substantially less wealthy.

Anyway, this was all brought to mind by this useful analysis of re-importation by Megan McArdle, though in this case it is in the context of textbook prices.

A Note to the East Coast

For all you hipster large and small towns in the northeast who have taken great pride in banning big box stores like Wal-Mart and Home Depot, good luck rebuilding after the storm.  I am sure you are going to be really happy that you banned retail establishments with worldwide logistics resources and that have developed special skills in routing supplies needed for post-storm cleanup.  Good luck getting a generator from that boutique hardware store you have been protecting.

You Ungrateful Slobs Should Be Thankful That The Federal Government Is Running Up Huge Debt

I know what you are thinking -- in this post title Coyote has engaged in some exaggeration to get our attention.  But I haven't!  Felix Salmon actually says this, in reaction to a group of CEO's who wrote an open letter to the feds seeking less deficit spending.

MW-AR995_debt_f_20120607165649_ME.jpgThere are lots of serious threats out there to the economic well-being and security of the United States, and the national debt is simply not one of them.  Nor is it growing. The chart on the right, from Rex Nutting, shows what’s actually going on: total US debt to GDP was rising alarmingly until the crisis, but it has been falling impressively since then. In fact, this is the first time in over half a century that US debt to GDP has been going down rather than up.

So when the CEOs talk about “our growing debt”, what they mean is just the debt owed by the Federal government. And when the Federal government borrows money, that doesn’t even come close to making up for the fact that the CEOs themselves are not borrowing money.

Money is cheaper now than it has been in living memory: the markets are telling corporate America that they are more than willing to fund investments at unbelievably low rates. And yet the CEOs are saying no. That’s a serious threat to the economic well-being of the United States: it’s companies are refusing to invest for the future, even when the markets are begging them to.

Instead, the CEOs come out and start criticizing the Federal government for stepping in and filling the gap. If it wasn’t for the Federal deficit, the debt-to-GDP chart would be declining even more precipitously, and the economy would be a disaster. Deleveraging is a painful process, and the Federal government is — rightly — easing that pain right now. And this is the gratitude it gets in return!

I seldom do this, but let's take this apart paragraph by paragraph:

There are lots of serious threats out there to the economic well-being and security of the United States, and the national debt is simply not one of them.  Nor is it growing. The chart on the right, from Rex Nutting, shows what’s actually going on: total US debt to GDP was rising alarmingly until the crisis, but it has been falling impressively since then. In fact, this is the first time in over half a century that US debt to GDP has been going down rather than up. 

So when the CEOs talk about “our growing debt”, what they mean is just the debt owed by the Federal government.

Duh.  Of course they are talking about the government deficit and not total deficit.   But he is setting up the game he is going to play throughout the piece, switching back and forth between government debt and total debt like a magician moving a pea between two thimbles.  We can already see the game.  "Look folks debt is not a threat, it is going down", but it is going down only at this total public and private debt number.  The letter from the CEO's made the specific argument that rising government debt creates current and future issues (see: Europe).  Just because all debt may be going down does not mean that the rise of one subset of debt is not an issue.

Here are two analogies.  First, consider a neighborhood where most all the residents are paying down their credit card debt except for Fred, who is maxing out his credit cards and has just taken out a third mortgage.  The total debt for your whole neighborhood is going down, but that does not mean that Fred is not in serious trouble.

Or on a larger scale, take consumer debt.  Most categories of consumer debt are falling in the US.  But student debt is rising alarmingly.  Just because total consumer debt may be falling doesn't change the fact that rising student debt is a serious threat to the well-being of a subset of Americans.

And when the Federal government borrows money, that doesn’t even come close to making up for the fact that the CEOs themselves are not borrowing money

What??  Whoever said that the role of the Federal government is to offset changes in corporate borrowing?  In his first paragraph, he already called the rise in total debt "alarming", and I get the sense that both CEO's and consumers agree and so they have been trying to reduce their debts.  So why should the Feds be standing athwart the private unwinding of an "alarming" problem?    And how does he know CEO's and their corporations are part of this deleveraging?  I see no evidence presented.  Corporate debt is but a small part of total US debt.  Corporations may be a part of this, or not.

In fact, they are not.  Corporate borrowing in the securities market has increased almost every quarter since 2008, such that total corporate bond debt is about 10-15% higher than in 2008 (see third chart here).  And here is total debt to GDP broken down by component  (this is for non-financial sectors) source.

Government debt is basically offsetting the consumer deleveraging.  Since consumers have to eventually pay this government debt off, as they are taxpayers too, then the government is basically flipping consumers the bird, forcing them to take on debt they are trying to get rid of.  Hard working consumers think they are making progress paying off debt, but the joke is on them - the feds have taken the debt on for them, and the bill will be coming in future taxes for them and their kids.

He might argue, "this is Keynesianism."  But is it?  If corporations are actually deleveraging, we still don't know how.  Is it through diverting capital investment to debt repayment (as I think Salmon is assuming) or are they raising capital from other sources and rejiggering the right side of their balance sheets?  And even if this deleveraging is coming at the expense of corporate investment, I thought Keynesians virtually ignored investment or "I" in their calculations  (you remember, don't you, from macro: C+I+G+X-M?).  In fact, if I remember right, "I" is treated as an exogenous variable in the famous multiplier "proof".

Money is cheaper now than it has been in living memory: the markets are telling corporate America that they are more than willing to fund investments at unbelievably low rates. And yet the CEOs are saying no. That’s a serious threat to the economic well-being of the United States: it’s companies are refusing to invest for the future, even when the markets are begging them to.

This is the real howler -- that "markets" are sending a low-interest signal.  Markets are doing nothing of the sort.  The Federal Government, via the Fed, is sending this signal with near-zero overnight borrowing rates and $30-$40 billion a month in money printing that is used to buy up government debt from the market.  If any signal is being sent at all, it is that the Federal Government is main economic priority is continuing to prop up the balance sheet and profitability of major US banks.

Investment is also not solely driven by the price of funds.  There must be opportunities where businesses see returns that justify the spending.  Unlike the Federal government, which is A-OK blowing billions on companies like Solyndra, businesses don't invest for the sake of spending, they invest for returns.  A soft economy combined with enormous government driven uncertainties (e.g. what will be our costs to comply with Obamacare) are more likely to affect investment levels than changes in interest rates.

 Instead, the CEOs come out and start criticizing the Federal government for stepping in and filling the gap. If it wasn’t for the Federal deficit, the debt-to-GDP chart would be declining even more precipitously, and the economy would be a disaster. Deleveraging is a painful process, and the Federal government is — rightly — easing that pain right now. And this is the gratitude it gets in return!

This is where economic thinking has ended up in 2012:  To Salmon, it does not matter where the Federal government spends this money, so long as it is spent.  He never even tries to justify that the government is running up debt in a good cause, because what it spends money on does not matter to him.  For him, the worst possible thing for the economy is for people to spend their money paying down debt.  Spend it on more drone strikes or more Solyndras or more squirrel research -- it does not matter to Salmon as long as the money is used for anything other than to pay down debt.

Here is the bottom line:  Businesses and individuals are trying to reduce their debt.  And many hard-working people think they are being successful at this.  But the joke is on them.  The government is running up trillions in debt in their name, thwarting American's desire to de-leverage.  Mr. Salmon wants us to thank the government for this.  Hah.

All-in-all, this is an awful argument to try to justify Congressional and Presidential fecklessness vis a vis  the budget.

Consumer Reactions to Higher Gas Prices

It is interesting to me that the government has chosen to subsidize the least desirable actions

via Zero Hedge

Undercharging for Medicare

For a while now I have argued that if people really are attached to Medicare as it is today, then premiums need to triple.

Along comes this analysis from Robert Dittmar via Hit and Run.  He argues almost all the current federal deficit is created almost entirely by the difference between the cost of government medical services and the premiums it charges.

As a thought experiment, let’s suppose that medical expenditures had been self-financed since the inception of government health care in the 1960s. What would our debt and deficit look like today? To answer this question, I simply added the medical care expenditure deficit back into the total government deficit. The result is depicted in [the figure below[ and is astounding (at least to me). Outside of medical expenditures and revenues, the Federal government sometimes ran a surplus and sometimes ran a deficit from 1966 until 1980. Starting in 1980, and lasting until 1994, the government consistently ran a deficit outside of medical spending, but from 1995 until 2010, it consistently ran a surplus. In 1994, the cumulative excess spending would have reached a bit over $1 trillion. But by 1999, debt due to sources other than medical spending would have been completely eliminated by surpluses! The government wouldn’t have needed to borrow again until 2011.

Of course, this is not entirely a Medicare issue.  Almost by definition, Medicaid and VA benefits are always going to be in deficit, since there are no premiums associated with these.

My normal response would be that the government not do this stuff.  But that is clearly a political impossibility.  We libertarians like to ignore realities like that, but it is true.  As such, I think two things will both be necesary

  • Substantial hikes in Medicare premiums
  • Some sort of system-wide cost reduction

To his credit, I suppose, Obama recognizes the need for the latter.  Unfortunately, he goes about it in exactly the wrong way.  His approach is to federalize the entire health care system and impose the same type of government-set rates on the rest of the health care system that obtain in Medicare.   But this does nothing to solve the government's cost problem.  In fact, it is likely to do the opposite.  To the extent that Medicare gets rates today that are subsidized by higher rates on non-Medicare customers, then forcing the entire health care system onto Medicare reimbursement rates will force an increase in Medicare rates, or a vast exit of health care capacity, or both.

If Medicare is going to continue to be a government program, we need to shift to a system that encourages price discovery and price shopping by medical consumers in the market end of the system.  We should be encouraging high-deductible health insurance plans rather than effectively banning them.

So I Made The Mistake of Watching Part of the Third Debate...

It was an amazing spectacle.  Two men fighting for 90 minutes to stand on the same patch of ground.  None of the issues I care about -- escalating drone strikes, rendition, indefinite detainment, Presidential kill lists, warrant-less wire-tapping -- were discussed because both men supported all of the above.  Somehow in just 11 years since 9/11, all of these issues seem to be beyond debate.  Amazing.   I have the third party debate Tivo'd, and I hear these issues got more play.  By the way, here I am in my debate gear

PS-  I am increasingly coming to the counter-intuitive conclusion that if one cares about ending these abuses of Executive power associated with the never-to-end-because-it-is-so-useful-to-politicians war on terror, then one should be rooting for Romney to win.  Not because he will end these practices -- no, I would expect him to enthusiastically embrace them.  But because the natural opponents of these practices on the Left will finally start to speak up and oppose them once they are not being practiced by their guy.  Right now, these practices are being expanded in a vacuum with almost no push-back.

I Can't Decide If This Is Awesome or Horrifying

you make the call -- mushroom cloud atom bomb cake for some sort of military function in 1946.

Update:  I looked at it again.  Someone please tell me this is not their wedding cake.

Part of The Hole Germans Are Being Asked to Fill In

Greek Olympic venues.  I am sure that baseball field gets a lot of use.  And that state-of-the-art man-made kayaking course and associated stadium sure seem to be contributing a lot to GDP.

The whole world patted Greece on the back for completing this boondoggle when in fact we were just enabling an alcoholic, congratulating Greece for, in effect, driving home safely after drinking a fifth of tequila.


A Great Question For Every Expansion of Executive Power

Glenn Greenwald has shown an admirable willingness to call out "his guy" to frequently criticize Obama's claim to be able to order Americans killed at his say-so, "without a whiff of due process, transparency or oversight".  In a recent article, he is flabbergasted that Congresswoman Debbie Wasserman Schulz, who is also head of the DNC, does not seem to have heard of the policy.

I am less surprised than he at the ignorance and mendacity of politicians.  But I did like the question Wasserman Schulz was asked:  did she trust Romney (ie her political bête noire) with such power.  This is a question that everyone should always ask at proposed expansions of government, and particularly Executive, power.  Choose the politician you least trust and/or disagree with the most.  Are you comfortable giving this power to that person?

So many of the Left (Greenwald being one of the few exceptions) have ignored this story, I think because they trust Obama.  Fine, but are you really going to trust the next guy in power?  Because now that you have established that this power is A-OK with a Democrat-Progressive child of the sixties, it is highly unlikely the next Republican in office is going to eschew it.  Wouldn't folks have been a bit more careful about giving this a pass had George Bush claimed the power.  (There is a sort of domestic policy parallel in this, in Republicans rolling over for Medicare part D when Bush was in office when they never would have done so for Clinton).

Italy Jails Scientists for Failing to Predict Earthquake

Unbelievable.  We will be burning witches next.

Six Italian scientists and an ex-government official have been sentenced to six years in prison over the 2009 deadly earthquake in L'Aquila.

A regional court found them guilty of multiple manslaughter.

Prosecutors said the defendants gave a falsely reassuring statement before the quake, while the defence maintained there was no way to predict major quakes.

The 6.3 magnitude quake devastated the city and killed 309 people.

It took Judge Marco Billi slightly more than four hours to reach the verdict in the trial, which had begun in September 2011.

The seven - all members of the National Commission for the Forecast and Prevention of Major Risks - were accused of having provided "inexact, incomplete and contradictory" information about the danger of the tremors felt ahead of 6 April 2009 quake, Italian media report.

This is what I call the layman's "CSI" view of science, which assumes that certainty is possible in analyzing and forecasting complex systems.  I am not going to blame the victim here, but I will note that scientists have to some extent made this situation far worse by insisting that they have levels of certainty they do not have, particularly in highly charged political debates (e.g. economics and climate).

Harvard physicist Luboš Motl argues it will give scientists roughly the same incentives doctors have in areas with lots of malpractice suits:

The verdict de facto lionizes crackpots who were screaming that there had to be a large earthquake and they just happened to be right in that case – while isomorphic and sometimes the very same crackpots are wrong in 99.9% of other cases in which they cry wolf – and it condemns the scientific method. They are wrong in 99.9% of cases because their predictive framework has nothing to do with science – it's all about a psychopathological paranoia – but even a broken clock is right twice a day.

The lesson for the scientists is clear: If you are a scientist who is qualified in a discipline that has implications for the safety of people, you must always recommend precautionary measures to be taken even if you conclude that the probability that something bad will happen is tiny. Italy may expect much more hysteria in various similar science-related situations than it has had so far because a court has declared a war on everyone who is honest and balanced.

Can you imagine that this sick logic would be applied e.g. to surgeons? Surgeons could spend 6 years in prison after every death of a patient whom they or others were optimistic about. It's just insane. People sometimes die, natural catastrophes sometimes occur, and it's just impossible to identify a human culprit in most cases. Only if a professional makes a mistake in which he or she has demonstrably violated some established and functional rules to reduce the risk – and whether or not this was the case may only be determined by another expert – he or she could be considered co-responsible for the deaths.

More Scientific Than Thou

MSNBC has worked hard to be the official TV channel of the "reality-based community" which so often lectures us skeptics on how we are all anti-science and stuff.     (source)

The author of XKCD has a site now that answers odd science questions.  Here is mine:  If, at a mass of over 200 pounds, Felix Baumgartner was indeed be accelerated faster than light and pointed at the Earth, what would happen?

Isaac Asimov has a short story mystery something like this, with a pool ball accelerated to light speed.

Each and Every One Its Own Solyndra

I drove through Indio / Palm Springs on Tuesday and was aggravated, as I always am, at just how few of the zillions of government-subsidized windmills are actually turning.  Saying that one in twenty were generating power would be generous.  I know the wind was blowing because a few of them were turning.

On Thursday I drove back through and tried to take a video, though all I had was my iPhone.

You have to squint to see all the dead windmills in the back of the first shot.  If you have never been to this site, you many not be able to comprehend just how far in the distance the dead masts go.  Here is another shot from several miles further down the site

Here is my proposal.  We make this whole area a National Park and call it "Corporate State Park."  It would be at least as educational as any other National Park.

Making Private Labor Look Just Like Public Employment, One Industry at a Time

Workers get tax money to play cards

Workers at LG Chem, a $300 million lithium-ion battery plant heavily funded by taxpayers, tell Target 8 that they have so little work to do that they spend hours playing cards and board games, reading magazines or watching movies.

They say it's been going on for months.

"There would be up to 40 of us that would just sit in there during the day," said former LG Chem employee Nicole Merryman, who said she quit in May.

"We were given assignments to go outside and clean; if we weren't cleaning outside, we were cleaning inside. If there was nothing for us to do, we would study in the cafeteria, or we would sit and play cards, sit and read magazines," said Merryman. "It's really sad that all these people are sitting there and doing nothing, and it's basically on taxpayer money."

Two current employees told Target 8 that the game-playing continues because, as much as they want to work, they still have nothing to do.

"There's a whole bunch of people, a whole bunch," filling their time with card games and board games," one of those current employees said.

On Private Job Creation, Obama and Reagan are Tied

Obama claims to have created more jobs than Reagan.  Republicans fire back with charts that say otherwise.

Here are the true numbers for private jobs created by these Presidents in office:

  • Reagan:    zero
  • Obama:     zero

Just once I would like to see a Presidential candidate answer:

"Why, I didn't create a single private job in office.  Anyone I hire is by definition a public employee.  The best I can do is to keep government out of the way, as much as possible, of the private individuals who do create new businesses and new products and new technologies that tend to lead to more private employment.  The worst thing I can do is to try to be investment-banker-in-chief.  Every dollar I hand to some company I like is money taken out of the hands of 300 million private individuals, who collectively know a hell of a lot more than I as to what makes for a better business investment  (and by the way they have far better incentives that I as well, since they are investing their own hard-earned money, and should I develop the hubris to play the stimulus game, I would be investing your hard-earned money."


And You Thought The Solyndra Handouts Were Over

Via the WSJ, the Solyndra scam continues

Having sold off its manufacturing plant, fired nearly 1,000 workers and proven the non-viability of its business model, Solyndra's only real assets are what the IRS calls "tax attributes." These are between $875 million and $975 million in net operating losses that can reduce future taxable income, which the IRS values as high as $350 million. Before it went toes up, Solyndra also accumulated $12 million in solar tax credits that can reduce tax liabilities dollar for dollar.

Tax-loss carry-forwards are routine but worthless if a company can't turn profits to pay taxes on. So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar. A holding corporation will then emerge from Chapter 11 that won't make products or employ workers, but it will get the Solyndra tax offsets.

The dummy company is owned by Argonaut Ventures I LLC, Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008.

Wow, who could have predicted this?   Well, lots of folks, including me just over a year ago.   I actually underestimated the value, assuming the losses would be worth about $150 million in avoided taxes, not the $350 million the IRS now pegs them at.  If I can figure out this game, the Obama Administration had to know what was going on.

If the Administration allows this to happen (and remember that in the GM boondoggle,  Obama waived the traditional rules that have bankrupt companies losing their tax loss carryforwards, giving GM a multi-billion dollar tax subsidy almost no one counts in the bailout costs), this will make Kaiser's last cash investment in Solyndra one of the great crony deals of all time.

If you remember, Kaiser (via Argonaut) invested $75 million as Solyndra was going down the tubes.  No rational person could have thought that amount would have saved the company, and it didn't.  What it bought, we now know, is three things:

  • Kaiser got the US Government to give up their lead creditor position to Kaiser, basically putting the US Government behind the Obama donor to get repaid and reducing the taxpayers' influence in the bankruptcy
  • It gave Kaiser a few precious months to loot the company.  Between that $75 million investment and the bankruptcy, Solyndra sold off most of its liquid assets at a discount to .... Argonaut, the group controlled by Kaiser
  • It looks like Kaiser will get nearly a billion dollars in tax losses that can be used to reduce its future taxes by $350 million.