Thursday, June 30, 2005

Brad DeLong's Semi-Daily Journal: Does Financial Globalization Remove the Possibility of a Dollar Crisis? Obstfeld and Rogoff Say, "No!"

Brad DeLong's Semi-Daily Journal: Does Financial Globalization Remove the Possibility of a Dollar Crisis? Obstfeld and Rogoff Say, "No!": "The real question is not whether there needs to be a big exchange rate adjustment.... The real question is how drastic the economy-wide effects are likely to be. This is an open question.... [W]hereas US markets may have achieved an impressive degree of flexibility, Europe (and to a lesser extent Japan) certainly has not. The rest of the world is not going to have an easy time adjusting to a massive dollar depreciation.... With the increasing diversity of banks’ counterparty risk... a massive dollar movement could lead to significant financial problems that are going to be difficult to foresee before they unfold....



"[T]he optimists can point to the dollar’s relatively benign fall in the late 1980s (though arguably it was a critical trigger in the events leading up to Japan’s collapse in the 1990s). But perhaps the greatest concern is that today’s environment has more parallels to the dollar collapse of the early 1970s than to the late 1980s...."



I think this is econmist-speak for we don't exactly what will happen, or to whom, but it will be bad, and maybe even, really bad, and the chances that this bad thing will happen is better than 50/50.

U.S. Case of Mad Cow Traced to Texas

U.S. Case of Mad Cow Traced to Texas: [USDA Chief Veterinarian} "Clifford said the cow was linked to a Texas herd through DNA testing. He said the herd had been quarantined, but he wouldn't say how many animals it included.



"Given the cow's age, agriculture officials believe it was most likely infected by consuming feed before the 1997 ban forbidding the use of cattle parts in cattle feed. The department and the Food and Drug Administration are trying to trace the history of the herd's feed.



"Officials also are trying to identify herd mates born within one year of the infected cow's birth as well as any offspring born within the past two years, even though 'it is highly unusual to find BSE in more than one animal in a herd or in an affected animal's offspring,' Clifford said."



I wonder if Betsey Blaney, the reporter in this article, quoted Clifford on the last part, because it was such an implausible assertion. On June 25, the N.Y. Times reported, "Normally, an infected animal's whole herd is slaughtered on the assumption that all ate the same feed." Charming.



U.S. policy on mad cow disease, in fact the whole USDA food inspection process, is a study in the routine corruption attendant on the business-government nexus in a Republican Administration. The U.S. is not testing nearly enough cattle to find Mad Cow disease, before it enters the U.S. food supply. And, apparently, the Department has been hoping to sunset the heightened level of testing -- it currently tests about 1 in 100 cattle slaughtered, or somewhat less than 1000 per day. When this particular test came back positive, the Department's reaction was to keep testing until they got a negative result, and then announce that no "mad cow" had been found. Seven months later, the department's Inspector General ordered the re-test by a British laboratory, which confirmed mad cow disease. Interestingly, the British lab's ability to find the disease exposed deficiencies in the similar tests used in the USDA's Iowa lab, which had previously produced a negative test. Tracing the cow back to its original herd was complicated by the Department's unwillingness to put a tracing system in place in the U.S. The cow's breed had been misidentified and parts of four other cows had gotten mixed up with the diseased animal.



Corruption and incompetence, which results in the spread of a brain-wasting disease -- could that contribute to a political storm? Maybe.

Dangerous Incompetence - New York Times

Dangerous Incompetence - New York Times: "The latest fantasy out of Washington is that American-trained Iraqi forces will ultimately be able to do what the American forces have not: defeat the insurgency and pacify Iraq.



'We've learned that Iraqis are courageous and that they need additional skills,' said Mr. Bush in his television address. 'And that is why a major part of our mission is to train them so they can do the fighting, and then our troops can come home.'



Don't hold your breath. This is another example of the administration's inability to distinguish between a strategy and a wish.



Whether one agreed with the launch of this war or not - and I did not - the troops doing the fighting deserve to be guided by leaders in Washington who are at least minimally competent at waging war. That has not been the case, which is why we can expect to remain stuck in this tragic quagmire for the foreseeable future."

Echoes of Vietnam

Echoes of Vietnam: "The war Bush declared to rid Iraq of weapons of mass destruction is not the war being waged. The two have only one thing in common: rhetorical sleight of hand. Yet the consequences of pulling out of Iraq would be awful. The day Saigon fell I was ashamed for my country -- an ugly, disgraceful retreat. I don't want that to happen again. But unless Bush rethinks his strategy, fires some people who long ago earned dismissal, examines his own assumptions (what's the point of continuing to isolate Iran and Syria when we need them both to seal Iraq's borders?) and talks turkey to the American people, he will lose everything good he set out to do, including the example Iraq could set for the rest of the Middle East. I know Iraq is not Vietnam. But Tuesday night it sure sounded like it."

Ezra Klein

Ezra Klein: "I want unions to revive as much as anyone, but let's not overstate the case. The last great flowering came out of the Great Depression. It was a mixture of favorable legislation, anti-capitalist sentiment, and worker desperation. The reason unions are dying today -- and Republicans are getting elected -- is that the economic situation is simply not bad enough to provoke a serious outcry for tougher corporate regulations and a more worker oriented regime. That's a good thing. At the same time, the Democratic party isn't good enough to create these issues on its own. That's a bad thing.



"If we continue down this path, there's a fair chance we'll slam right into a severe recession, if not a depression of sorts. A housing crash, a terrorist attack on oil supplies, a trade war with China that makes them decide dollars aren't such a good investment after all...our room for error isn't high. But the better outcome would be a strong Democratic party that regains power, loosens the constraints on union organizing, institutes tougher corporate oversight and better fiscal management, and brings us back from the brink. "



An important, but usually implicit, theme, of The Coming Perfect Storm, is that a narrative line in which the pundit looks to a looming disaster as a reason for hope is . . . what? ironical? perverse?



When evangelical Christians go out and buy novels, which foresee a Last Days in which their "faith" is vindicated in a series of "Biblical" catastrophes culminating in the literal end of world, we secularists may mutter or laugh out loud.



But, liberal Democrats, in the age of Bush, are in a similar position, fearing the worst from Bush policies, and hoping that Bush and his ilk might be swept away by the consequences of their own incompetence.



Ezra, above, drops the irony, and simply expresses hope for change, a change, which liberal Democrats are apparently powerless to actually bring about. More difficult to face is the possibility that Bush is successful, and the fascist state is here to stay; America is a lobster in a heating pot, which will never get out alive.



Better to hope for catastrophe and the cleansing power of the perfect political storm.

Back to Iraq 3.0: Bumps in the Road

Back to Iraq 3.0: Bumps in the Road: " As far as Iraq is concerned, “the progress is impressive,” Rumsfeld said. “I think they're going to choose the path of lightness. The sweep of human history is for freedom. Look at what's happened in Lebanon and Kyrgyzstan and the Ukraine.”

"The secretary said the American people can be optimistic about a good outcome in Iraq, but the optimism must be tempered with an understanding of reality. “We have to recognize that it's a tough, tough, tough world, and there are going to be bumps in the road between now and then,” he said.

“Bumps in the road”? [. . .] I can't even begin to tell you how many Iraqis have been killed in the weeks I was away. And how many more Iraqis, journalists or otherwise, will die because the Americans can't tell who's friend or foe? Those aren't “bumps in the road.” Those are signs that you went off the road without a map a long time ago.

"Where do you even begin combatting the head-in-the-sandism, brazen propaganda and revisionism of the above release. (By the way, it's about the fourth or fifth one I've received in the last few days touting the same theme, apparently in concert with President Bush's push to let Americans know that everything is going hunky-dory.)

"News flash: Iraq is a disaster. [emphasis added] I've been back one day, and the airport road was the worst I've ever seen it. We had to go around a fire-fight between mujahideen and Americans while Iraqi forces sat in the shade of date palms on the side of the road, their rifles resting across their laps. My driver pointed to a group of men in a white pickup next to me. “They are mujahideen,” he said. “They are watching the Americans.” Indeed, they were, and so intently that they paid no attention to me in the car next to them. We detoured around two possible car bombs that had been cordoned off while Iraqis cautiously approached.

[. . .]

"When I was in Ramadi, I found the morale to be lower than expected. It wasn't rock-bottom among the Marines of the 1st Battalion, 5th Marine Regiment, but it wasn't great. Most of the ones I talked to weren't confident they were doing anything worthwhile, and were instead focused on getting home alive. If a few Iraqis had to die to make that happen, well, war is hell.

"I'm not sure who's winning this war, the Americans or the insurgents. But I know who is losing it: the Iraqi people. Those bumps in the road are their graves. "

Whiskey Bar: Failure is an Option

Whiskey Bar: Failure is an Option: "Is the war hopelessly lost? I tend to think so, although I'm realistic enough to admit that I don't have all the facts, and couldn't interpret them all correctly even if I did. I know there are some military analysts whose opinions I respect who think the war is lost -- analysts such as William S. Lind, who, for all his wing nuttery on cultural and social issues, is one smart cookie when it comes to 'Fourth Generation' warfare:



'There's nothing that you can do in Iraq today that will work,' said Lind, one of the original Fourth Generation Warfare authors. 'That situation is irretrievably lost.'"

KRT Wire | 06/07/2005 | Prescient insurgency experts want tactical changes

KRT Wire | 06/07/2005 | Prescient insurgency experts want tactical changes: "'There's nothing that you can do in Iraq today that will work,' said Lind, one of the original Fourth Generation Warfare authors. 'That situation is irretrievably lost.'"

Monday, June 27, 2005

IncomeHouse.jpg (JPEG Image, 600x463 pixels)

How bad is the housing bubble? For a little perspective, consider:
IncomeHouse.jpg (JPEG Image, 600x463 pixels)

Those other, now seemingly modest, deviations between household income and housing prices, in the 1980's and 1990's were also bubbles.

Hmmm.

Thanks to Calculated Risk and Angry Bear

Mish's Global Economic Trend Analysis: Warning bells from homebuilder suppliers

Mish's Global Economic Trend Analysis: Warning bells from homebuilder suppliers: "Housing and the economy are both headed for a serious tumble as a nasty deflationary recession is headed our way. Book it."

Saturday, June 25, 2005

James Wolcott: A-Roving We Will Go

James Wolcott: A-Roving We Will Go: "What amazes me is that more Americans now blame Bush for provoking the war with Iraq than blame Saddam Hussein. That's not an argument I've heard anyone make on cable talk or on the op-ed pages. Somehow Americans drew that conclusion all on their own! The tide of popular opinion turning against the war is washing away walls we didn't even know were there."



Storm clouds gathering in the North.

TPMCafe || HITTING BOTTOM

TPMCafe || HITTING BOTTOM: "I think that many in the majority party are finding themselves in the same psychic shape as alcoholics a few months before they finally seek sobriety, except for George Bush, who apparently does not have a clue. With alcoholism, other people can see that the alkie is, to quote one of my friends, in a state of pitiful and incomprehensible demoralization; but it takes what it takes for the alcoholic to realize that. This is why we have Karl Rove saying that when liberals saw the savagery of 9-11, we wanted to give the terrorists aid, comfort, and aromatherapy. So if the disease model of addiction holds true for this administration, there is something SO stinky and bad that has not quite yet had the light shined on it, that is the rock bottom truth of their madness, and that, tragically, even worse stuff than we already know will be revealed.

"Rove's behavior this week reminds me of three things, besides my own sorry alcoholic collapse: one is what my very wise friend Gil says-and Gil has been sober since before God-that there are three stages in the disease: fun, fun and trouble, and trouble. Fun, for the White House, was the fall of Baghdad and Mission Accomplished. Fun and Trouble held, up until a month or so ago: you had huge body counts, grave global dismay, etc, but you also had the elections here and in Iraq, with all that courage and the purple fingertips. Now?

Well, I don't see where the fun is anymore: I think we are now leaving the fun and trouble stage."

"Trouble" and "even worse stuff" hmmm

The political analysts, who were not distracted by Rove's obnoxiousness, have noted the "coincidence" of rising corruption scandals. Corruption scandals, if combined with other events, have the potential to, literally, destroy the Republican Party and Republican power. Corruption is the one thing, which could blow apart the Republican coalition -- if that part of the Republican coalition, which is not in it for the money, comes to believe that it has been betrayed by the greedy and corrupt, and the Republicans are even more corrupt that the Democrats possibly could be -- well, then the Republican Majority is dead, a corpse.

And, how bad is the Republican corruption? We don't know . . . yet. We may never know, given corporate control of the Media, but then again, we might, nevertheless, gain a clue. Billions disappeared in Iraq, without accomplishing a thing. Somebody got that money. Halliburton is a poster child for corruption. Missile defense is one huge boondoggle. "Duke" Cunningham. Tom DeLay, that ol' drunk, with his K Street project, may have succeeded in cleansing the Democratic Party sufficiently to make at least a few Democrats credible critics of DeLay's corruption.

Corruption scandals, which have the potential to build in a series of crescendos, as more and more is revealed, are a nearly essential part of a political storm. Their dramatic evolution, in which a series of revelations, repeats a damaging message and feeds and gradually confirms a terrible suspicion, is what convinces large numbers of people that something has to be done, something has to change.

The country needs a corruption scandal of gargantuan proportions to undermine the Republican majority. We might just get it.

Friday, June 24, 2005

TPMCafe || Oil Shockwave

TPMCafe || Oil Shockwave: "Indeed, the entire scenario deepened my general pessimism for the future of the United States -- a pessisism rooted in the hapless leadership of the Bush Administration and apparently shared by the huge majority of Americans who believe that the country is on the wrong track. "



This is the second of two blogposts referencing this single article. If you want to take a guess at what will ignite the coming perfect storm, well, this article will give you my favorite.



A modest disruption in the oil supply, followed by collapse in the dollar, U.S. withdrawal from Iraq, bankruptcy for General Motors, . . . shall I go on?



The coming storm begins to look more plausible, something to be feared.

TPMCafe || Oil Shockwave

TPMCafe || Oil Shockwave: "The events were not in the realm of the fantastic -- as Gates said after the game was through, 'the scenarios portrayed were absolutely not alarmist; they're realistic.' They included ethnic unrest in Nigeria, an al-Qaeda attack on a natural gas facility in Saudi Arabia and at the oil terminal in Valdez, Alaska, and further attacks against expats in Saudi Arabia that results in a mass exodus of these critically important workers.



"As the scenario played out, the price of a barrel of oil leapt to $80 a barrel then $100, then $150. Price per gallon broke $5, and the cost to fill up your mid-size SUV broke $100. The economic effects were devastating -- more than 2 million jobs lost in 2007 (largest single yearly loss since 1945), average annual gas costs per household spiking to $5,800 a year, a recession, and 28 percent drop in the S&P 500. Not a pretty picture.



"These events had such a huge effect because there is almost no slack in the global market for oil -- and, importantly, the only swing capacity is in the hands of the Saudis. If they don't want to play ball or a situation arises in which they can't, then basically, we're screwed."



The primary reason the world is in a no-slack situation is that the world is moving very, very close to Hubbert's peak, the point at which it will simply not be possible to increase oil production from year to year. Demand, of course, continues to increase.



The secondary reason is the War in Iraq. Iraq sits atop a lot of oil, but is producing very little. And, whose fault is that?



Hmmm.



Tuesday, June 21, 2005

Whiskey Bar: Rotten Boroughs

Whiskey Bar: Rotten Boroughs: "if the demographic and economic centers of gravity continue to shift towards the red states (and the exurban communities that ring the red state cities) then the GOP may not only be able to keep its institutional advantages, but reinforce them. . . the GOP has learned how to make maximum use of its built-in edge. It's also mastered the politics of cultural symbolism, which could help it contain economic and social forces that otherwise would tend to benefit the Democrats. Maybe these advantages will be decisive. Maybe the Republicans really have figured out a way to stay in power forever."



Perhaps no storm is coming. Perhaps the consequences of Republican incompetence and ill will will not come at once, but gradually, and go unrecognized by a voting majority. Perhaps.

Clusterfuck Nation by Jim Kunstler : Turning Point

Clusterfuck Nation by Jim Kunstler : Turning Point: "this period can probably be viewed as a swing period of history. By that I mean a period when we hoped that there was a quick and easy way to keep the oil flowing westward and found out that it wasn't so. The time is now coming when the American public won't tolerate a dozen US casualties a week, nevermind fifty Iraqis. But Americans won't tolerate $5 a gallon gasoline, either. We'll now see how the public will reconcile these intolerances.



"We enter this week with oil nearing $60 a barrel. Global finance, hedging, interest rates, and the continued zest of America's last remaining industry, real estate, will all hinge on the price of oil and on America's prospects for getting it at any price. President Bush last week shifted the responsibility for an energy policy to congress, because the ideas coming out of the White House have been so transparently lame (the hydrogen economy).



"My guess is that we are about to see the first act of the Hooverization of George W. Bush."



We live in hope.

Sunday, June 19, 2005

Whiskey Bar: Going to Tehran

Whiskey Bar: Going to Tehran: "Perhaps the neocons believe they've locked us into perpetual war in the Middle East so tightly that no subsequent administration will be able to get us out -- no matter what the voters want. They're certainly arrogant enough, and stupid enough, to believe it.



Or does the gang have a contingency plan for coping with an outbreak of democracy in America -- and not just in Iran and Iraq? You never know. Real men may decide they can't afford to let the voters stand in their way. Not if they want to get to Tehran.



That doesn't mean they'll ever get there, of course. Certainly not with this army. But it does suggest that unless they are stopped, the Cheney administration and its titular head will pursue their march of folly to the bitter end -- no matter what road it takes them down or where it may end."



The Downing Street Memos and the course of events in Iraq are beginning the process of asking a truly critical question, "Why are we in Iraq?" Why did Bush lead us in this direction?



Since his announced intentions have proven to be illusory at best, and lies at worst, we are free to speculate, based on outcomes and current trends. Condi Rice's little lie about "generational committments" could not come at a better time, for critics, because it supports the very real possilibility that the Republicans wanted a permanent presence in the Middle East.



Personally, I tend to think Georgie just wanted the political capital, which a President gains in war, and was too much of a moron, to anticipate the risks or plan for the foreseeable consequences. Cheney, Rumsfeld and others associated with the Project for a New American Century (PNAC) were primed to believe in a positive outcome from such a "manly" assertion of power, and too stupid to apply the lessons of history.

TPMCafe || BUSH BEGINS TO TANK: A CHRISTIAN PERSPECTIVE

TPMCafe || BUSH BEGINS TO TANK: A CHRISTIAN PERSPECTIVE: "Even though people will look back at the Bush years agape, it is hard to stay hopeful when we don't know when that will be. It's hard not to know how long of a haul we are in for: it's like when you are trapped in a really toxic relationship, and have not figured a way out yet. "

Saturday, June 18, 2005

At Long Last Have They No Decency?

At Long Last Have They No Decency?: "The left and center-left need to find rhetoric that allows them to strike at Republican abuses, without being shrill recitations of old conflicts. Dean tried rhetoric that is really out of the civil rights era, and Durbin older rhetoric from World War II. But the reactionaries are not hold over segregationists, nor are they totalitarians of the stripe we saw goose stepping around the world in the mid-20th century. They are a unique threat, and must be called by their proper name, one to which they, and no one else, answer to.



"The flip side of this is the need to find a positive rhetoric. The reactionaries have their vision of a take no shit, take no prisoners, god fearing disciplined society. The kind of America that has a super bowl winning military that everyone cheers, and plenty of free beer. It is a simple vision of America that appeals to experiences in popular culture and personal daily life. The left does not have a corresponding vision of America, and therefore it is difficult for it to promote its own ideas, and even more difficult for it to attack the crass 'shit kicker' America that cheers on torture in Guantanamo Bay from the cover of Time Magazine.



"The time to do this is running out. America is going to want answers soon, and if it cannot find them from the Democrats, it will find them in some right leaning supposed maverick, such as John McCain. Someone who will tell America that a few reforms around the edges will solve everything, and the only thing we really need to do is get those boots resoled."



One key problem with the "Coming Storm" is the meterological metaphor allows for passivity. But, in this storm, people and politicians "ARE" the wind, the rain and the thunder.

Thursday, June 16, 2005

The Trillion-Dollar Bet - New York Times

The Trillion-Dollar Bet - New York Times: "This year, only about $80 billion, or 1 percent, of mortgage debt will switch to an adjustable rate based largely on prevailing interest rates, according to an analysis by Deutsche Bank in New York. Next year, some $300 billion of mortgage debt will be similarly adjusted.



But in 2007, the portion will soar, with $1 trillion of the nation's mortgage debt - or about 12 percent of it - switching to adjustable payments, according to the analysis.



The 2007 adjustments will almost certainly be the largest such turnover that has ever occurred.



The impact is not likely to derail the economy on its own, economists predict, but it will probably slow growth. For individual families, the problems could be significant."



Looks like rain in the forecast.

Looking for a Scapegoat

Whiskey Bar: Looking for a Scapegoat: "what Friedman’s comment really drove home for me is how perilous the postwar political environment is likely to be for the remnants of American liberalism – and for the anti-imperialist left in particular."



The Coming Storm, rather than sweeping away the fascist State from its crib, may sweep away the remnants of liberal rationality. Be careful what you wish for.

Monday, June 13, 2005

WSJ.com - What Happens If Real Estate Goes Bust

WSJ.com - What Happens If Real Estate Goes Bust: "A housing bust would be worse [than the stock bust],' says Kenneth Rogoff, an economics professor at Harvard University and former chief economist at the International Monetary Fund."



". . . a dollar reduction in stock wealth cuts household spending by four cents, but a dollar lost in housing wealth reduces it by seven cents. Mr. Rogoff says the effect may have since grown because home buyers are more leveraged.



"The IMF found after studying housing cycles world-wide that "private consumption fell sharply and immediately in the case of housing price busts while the decline was smaller and more gradual after equity price busts." That's even though housing price declines were usually smaller at 30%, adjusted for inflation, compared with 45% for stocks. The U.S. had never experienced a decline of such a size in the period the IMF studied, so it's unclear how much the global experience would apply to the U.S."



Sunday, June 12, 2005

War: Realities and Myths - by Chris Hedges

War: Realities and Myths - by Chris Hedges: "We are losing the war in Iraq. We are an isolated and reviled nation. We are pitiless to others weaker than ourselves. We have lost sight of our democratic ideals. Thucydides wrote of Athens' expanding empire and how this empire led it to become a tyrant abroad and then a tyrant at home. The tyranny Athens imposed on others, it finally imposed on itself. If we do not confront the lies and hubris told to justify the killing and mask the destruction carried out in our name in Iraq, if we do not grasp the moral corrosiveness of empire and occupation, if we continue to allow force and violence to be our primary form of communication, if we do not remove from power our flag-waving, cross-bearing versions of the Taliban, we will not so much defeat dictators such as Saddam Hussein as become them."



We cannot simply wait for the coming storm to do what we are unwilling to do for ourselves. If we would save our democracy, we must save it, and not sit passively hoping that, by "overreaching" Bush and his ilk will do it, for us. If the Iraq War was not "overreaching", the word has no meaning. He must be driven from office for this crime, or America is lost.



If you know someone, who now supports this awful war, talk to them. No, better, punch him in the nose and keep on punching, until he agrees never to vote again as long as he lives.

Whiskey Bar: Hard Evidence

Whiskey Bar: Hard Evidence: "Maybe the Downing Street Memo (coupled with Bush's sinking poll numbers) will be the cocktail that puts a little fire in the bellies of the Washington press corps. A few stiff belts of the truth seem to have encouraged Polman to stop pulling his punches anyway. More likely, the corporate drones at the top of the editorial pyramid will heed the voice of their master (Mammon) and simply close the bar -- long before the timid nobodies at CNN or the henpecked husbands of CBS/NBC/ABC ever get their hands on a drop of the good stuff.



"On the other hand, the sheer insanity of the Iraq occupation (and the administration's own progressively more flagrant detachment from reality) finally seem to be having an effect on the American public -- despite the media's attempts to severely ration the truth. It may not take much of the stuff to get a good bar fight going, one in which the administration -- and the conservative propaganda machine -- will come out the loser for a change."



One would have thought an unpopular war might have affected the 2004 election. One might have thought that numerous scandals might of interest.



It may be that the scandals are piling higher and higher, a giant bonfire of corruption and incompetence, which will ignite in an apparently spontaneous media firestorm. Of course, this is the same corporate right-wing media, which kept Whitewater alive for seven long years.



For the news junkies, all of this stuff is known. It is being reported. It just is not being reinforced into a continuous narrative. There was nothing to report about Whitewater. But, the continuous narrative was put in place anyway.



It is not the facts, which make a scandal. It is the will to repeat a narrative, which unites the facts. That will is lacking. And, without it, no facts about Bush will bring him down. There will be no perfect storm, to rescue America from a long, fast decline.



And, even if such a perfect storm should emerge at the horizon, look for Bush's masters to try some horror, to shortcircuit it all -- some dramatic, horrible event, to bring American atavism to the fore, and to preserve the fascist State Bush has been building.

Friday, June 10, 2005

Brain degeneration at the Dept. of Agriculture - MSNBC.com

Brain degeneration at the Dept. of Agriculture - Hardball with Chris Matthews - MSNBC.com: "Did I mention that American scientists are tracking a mysterious spike in the U.S. of the human form of BSE, known as Creutzfeldt Jakob disease?"



The corrupt morons, who run the Agriculture Department on behalf of corporate agribusiness have evidently muffed the job of making sure U.S. beef is safe. And, the proof of that tragic, criminal incompetence is starting to emerge.

Thursday, June 9, 2005

WSJ.com - Deficit Is Arriving Under Forecasts

WSJ.com - Deficit Is Arriving Under Forecasts: "Overall federal spending is increasing, including for war costs. More broadly, spiraling health-care costs for Medicare and Medicaid programs, including a prescription-drug benefit for seniors starting next year and a wave of baby-boomer retirements after 2008, will drive federal deficits to unsustainable sizes.

'These are the good ol' days. These are the best of times,' says Congressional Budget Office Director Douglas Holtz-Eakin, a former administration economic adviser. 'After this, it gets worse.'"

This is the good news / bad news story of the day. The country is prospering, for the moment, and the storm clouds some see on the horizon are far away.

But, notice the projected timimg. The coming storm has been timed by Republicans to engulf the next President, and not this one. The Republicans are planning to lose in 2008, in order to hooverize the Democrats. {You heard it here first.)

Tuesday, June 7, 2005

Iraqis Look at Cuts in Payroll

Iraqis Look at Cuts in Payroll: "On Sunday, members of Iraq's elite police commando units, heralded by U.S. and Iraqi officials as a key to stemming the insurgency, staged a protest outside Baghdad's heavily fortified Green Zone, saying they hadn't been paid in four months, witnesses said. "



I got this via Brad DeLong, who got it from Eric Urmansky.



But, there it is, in the L.A. Times.



I do not know which is more incompetent -- the American news media for not reporting this astonishing story more prominently, or the American occupation authorities for, well, being complete friggin' idiots.

Monday, June 6, 2005

The New York Review of Books: Selling Washington

The New York Review of Books: Selling Washington: "The Republican purge of K Street is a more thorough, ruthless, vindictive, and effective attack on Democratic lobbyists and other Democrats who represent businesses and other organizations than anything Washington has seen before. "



Thanks to Carpetbagger for this link.



This is an article on the Republican K Street project, by Elizabeth Drew, is excellent.



The purge of Democrats from lobbying will accelerate the shift in the Democratic Party toward a more radical and "pure" ideology. It will also keep the Democrats from power, until such time as a catastrophe overcomes the country.



A "coming storm" is not merely a perverse hope or rhetorical framework for alarm, it becomes a kind of political necessity built into the political structure. The Republican Party becomes a thoroughly corrupt instrument of the corporate executive class, while the Democrats, almost against their will, are forced to become representatives of whoever, other than business, cares about politics.



Until catastrophe strikes, the Democrats are excluded from political power, and even then, they may get screwed. Corruption does not necessarily entail fatal incompetence. Thoroughly corrupt institutions do not exactly prosper, but they can endure indefinitely, as the history of Empires attest.



But, the K Street Project, while disgusting, is actually a hopeful sign, because it will help the Democrats shake off the corruption, which has prevented the Democrats from effectively opposing the Republican agenda, and from offering a clear alternative. If the storm comes, and if the Democrats standing away from power and responsiblity are able to tell a clear narrative, which connects corruption to disaster, the country may yet be saved.

Clusterfuck Nation by James Howard Kunstler

Clusterfuck Nation by James Howard Kunstler: "The Times's star columnist Thomas Friedman is making hay this season with his new book, The World is Flat, about the global economy. His book asserts that current trends will continue indefinitely -- China will continue to manufacture ever more of America's household products, Americans will continue to enjoy cash-out home equity loans to buy plastic patio chairs made in China, WalMart will keep running its warehouse-on-wheels at a thumping great profit, and all impediments to global trade will be vanquished by telemarketing, computer technology, and confident corporate can-do spirits. I am tempted to ask how Friedman manages to type on a laptop with his head so far up his ass, but this blog is dedicated, above all, to a high-minded brand of politeness so we'll just say that he is not paying attention to a gathering global energy shitstorm that is going to change absolutely everything -- including global economic relations which pundits foolishly maintain to be permanent conditions of life."



Kunstler is a true believer in the Coming Storm -- but his apocalypse is an energy-driven one of truly global proportions, and not the local political meltdown of the Republican right-wing, which I am fond of hoping for. Still, he has style. ;-)



Just for the record, I do think the energy situation is a critical, global problem, and, of course, I do not expect Bush-Cheney, who are, after all, two oil company executives, to address it in anything like a sensible manner. However, I am also an economist, who knows that there is a lot of slack and waste in our energy use, and huge reservoirs of marginally more expensive fuel available. I am with Stirling Newbery, in thinking that the developed world will have to make a technological switch, which will affect politics deeply, just as the original switch to fossil fuel in the industrial revolution, circa 1830, did. But, still I would not expect much of anything to happen, which would be suitable fodder for a summer blockbuster movie. Then, again, maybe India and China will ally against the U.S. in World War III, or IV or V. You never know.



(But, Kunstler is right about one thing: Friedman does write his column with his head (ahem) somewhere unsuitable, and a neat trick it is.)

Good Intentions Gone Bad - Newsweek World News - MSNBC.com

Good Intentions Gone Bad - Newsweek World News - MSNBC.com: "Living and working in Iraq, it's hard not to succumb to despair. At last count America has pumped at least $7 billion into reconstruction projects, with little to show for it but the hostility of ordinary Iraqis, who still have an 18 percent unemployment rate. Most of the cash goes to U.S. contractors who spend much of it on personal security. Basic services like electricity, water and sewers still aren't up to prewar levels. Electricity is especially vital in a country where summer temperatures commonly reach 125 degrees Fahrenheit. Yet only 15 percent of Iraqis have reliable electrical service. In the capital, where it counts most, it's only 4 percent.



The most powerful army in human history can't even protect a two-mile stretch of road. The Airport Highway connects both the international airport and Baghdad's main American military base, Camp Victory, to the city center. At night U.S. troops secure the road for the use of dignitaries; they close it to traffic and shoot at any unauthorized vehicles. More troops and more helicopters could help make the whole country safer. Instead the Pentagon has been drawing down the number of helicopters. And America never deployed nearly enough soldiers. They couldn't stop the orgy of looting that followed Saddam's fall. Now their primary mission is self-defense at any cost—which only deepens Iraqis' resentment.



The four-square-mile Green Zone, the one place in Baghdad where foreigners are reasonably safe, could be a showcase of American values and abilities. Instead the American enclave is a trash-strewn wasteland of Mad Max-style fortifications. The traffic lights don't work because no one has bothered to fix them. The garbage rarely gets collected. Some of the worst ambassadors in U.S. history are the GIs at the Green Zone's checkpoints. They've repeatedly punched Iraqi ministers, accidentally shot at visiting dignitaries and behave (even on good days) with all the courtesy of nightclub bouncers—to Americans and Iraqis alike. Not that U.S. soldiers in Iraq have much to smile about. They're overworked, much ignored on the home front and widely despised in Iraq, with little to look forward to but the distant end of their tours—and in most cases, another tour soon to follow. Many are reservists who, when they get home, often face the wreckage of careers and family.



I can't say how it will end. "



I can say how it will end. Badly.



The L.A. Times, today, is reporting the Iraqi government is planning big layoffs. That will surely make everyone very happy.

Saturday, June 4, 2005

TPMCafe || The Democrats' Dilemma

TPMCafe || The Democrats' Dilemma: "Democratic candidates in 2006 and 2008 are going to need to essentially admit that they don't have magical solutions that will make this all come out all right and will, consequently, need to spend a lot of time making the case that this lack of appealing options is fundamentally the Bush administration's fault. That's fair enough as far as it goes, but it's bound to re-open the extremely divisive debate within the Democratic Party about the initial decision to go to war."



Iraq is part of the scenario of the coming storm for many. Surely, the Republican Party cannot continue indefinitely to prosper on the basis of their performance in the Global War on Terror, generally, or the War in Iraq, in particular.



The Democrats do have a problem, however. It is not a problem of previous intellectual committments, however, it is a problem of narratives.



The "credibility" issue is not about past intellectual committments so much as the difficulty of finding a common narrative, to which the whole party can subscribe, without too much individual embarassment.



Many on the Left would like a mind-your-own-business narrative, which is simply not all that credible, for a couple of reasons. First, like it or not, Iraq and the Middle East are vital strategic interests. Leftist Democrats, who live in fantasyland, can pretend otherwise, but those of us in the reality-based community are unlikely to trust those dwelling there, to "protect" our interests.



Second, the "other" side in Iraq are genuinely evil. Many leftists convinced themselves that the "other" side in Vietnam were Vietnamese patriots; whatever the merits of that view, it doesn't apply in Iraq. The "other" side in Iraq are evil and/or crazy; some are ruthless criminals, others are sectarians of the worst kind.



The Democrats need a narrative that will affirm that the decision to go to war in Iraq was wrong, practically and morally, without building into that narrative assumptions, which will seem hopelessly naive to a majority of Americans. And, the Democrats need a narrative, which will point to a future policy, including withdrawal of military forces, which is not clearly self-destructive (and, no, it does not matter, how clearly self-destructive, staying is likely to be).



Any good Democratic narrative will start by characterizing Republican policy to date. That is key. It is the great advantage of being powerless and in opposition, that you can unify in opposition to the objective committments of your opponent, without having to unify in favor of any particular committment of your own. Republicans, even though they have been in power for several years, still do a better job of uniting themselves in opposition to Liberal Democrat strawmen, than real Democrats are able to unite in opposition to the reality of Republican policy.



So, instead of worrying quite yet about what ultimate Democratic policy in the Middle East might look like, let's start by figuring out a compelling narrative, which characterizes what the Republicans have been doing in the GWOT and Iraq.



It is really pointless to worry about whether Democrats favor withdrawal or aggressive military action in the present circumstances. We have no power to affect policy in the present circumstances; it will be hard enough to salvage something from the shambles, which will be the U.S. position in the world and the Middle East in 2008. So, no, Matthew, Democrats should not worry about prescribing "what do we do now"; instead the Democratic narrative should restrict itself to characterizing what the Republicans are doing now.



What are the Republicans doing? What is their policy? What is their plan? What is their objective? What have been the results? And, what is likely to be the result?



My recommendation for a narrative characterization of Bush and Bush's policy, would make ample use of the twin, alliterative adjectives, cowardly and corrupt.



When Democrats are asked for the Democratic plan, they should say, "if and when the American people again trust us with power, we will do our best to salvage what we can of American interests, American resources and American honor."



In the meantime, concentrate on characterizing Republican policy as dishonorable for being cowardly in its foundation of unreasoning fear; concentrate on characterizing Republican policy as corrupt and wasteful for squandering American resources in Iraq and elsewhere -- the borrowing, the absurdly expensive fantasy weapons programs, the ineffective reconstruction program in Iraq, the deterioration in military strength, etc.

Friday, June 3, 2005

The Blogging of the President: 2004

The Blogging of the President: 2004: "Watergate . . . was a wake up and drive moment for America. Iraq and the economy are converging on another such moment. The first principle of scandals, as we are reminded by the identification of 'Deep Throat' as Mark Felt, is that scandals don't happen, they are allowed to happen. Scandals happen when some institutional players have a reason for putting pressure on someone else."



. . .



""Why is that? Because a scandal is a way of turning things people don't want to hear about - policy, facts, principles, history, numbers - and turning them into soap opera: the bad bad person gets caught.



The Republicans hope that they can hold off recession until after 2008. That way they can



1. Blame it on the Democrat, if they lose 2008. And obstruct anything the Democrat wants to do so that it won't get better.

2. Have 4 years to hope it gets better if they win.



Since the 'Powers that Be' want reactionary government, we should expect to see all the accoutrements of the reactionary order, for example, the cult of Reagan, continue to be pushed by the top down media. What is funny is that this is about the high water mark of the reactionary civic religion in America - the top down media is going to be pushing a religion that has less and less of a constituency."



Stirling Newbery is my hero.



No, seriously. This post is a masterpiece. Read it all.



"However, once a scandal is in play, anything can happen. The 'winner' will be the one who comes up with a good narrative. Jimmy Carter road Watergate to the White House by saying to the American people that the problem was lying. They were lied to. The reality is that the problem wasn't lying, it was energy, and telling the truth to people about energy, namely we had to use less and do more with what we had, wasn't very popular. Americans didn't want to hear that, and so they voted for Reagan, who lied more often, and better, than Nixon ever had.



"Gingrich road Wright's scandals to power. The narrative was that the entrenched Democrats were the problem. Leave aside the Republican Congress is more out of touch and corrupt than the old Democratic Congress was, that was the narrative.



"Bush road Clinton's scandal into power, because he too had a narrative: it was that Clinton was too smart. Stupid is good, you can't trust anyone who uses language well, that's "flip flopping". Like Carter's mantra, it was important because it destroyed the very willingness of people to even listen to the otherside. It got at the core of ethos.



"Thus when the scandal comes into play, the real question isn't the facts, it is the way to string together the details. The side that strings those pearls together to produce a bright glamour, will win."



Readers of this blog will know that I think liberals and Democrats are hoping that Bush is brought down by scandal. Mr. Newbery reminds us that power politics lies behind scandal. Liberals and Democrats are decidedly out of power at this moment. And, Republicans are still hoping to hooverize the Democrats, to put Democrats in the unfortunate position of having to administer the pain, which accompanies adult responsibility. Can they put off debacle in Iraq and economic collapse at home until November 2008?



It seems impossibly long to me, and I wonder what they [the reactionary, Republican power structure] will do, when 2008 seems a bit too far to reach? If the Democrats were to gain control of either house of Congress in 2006, the fat would be in the fire, because, then, there would be some Democrats able to investigate the myriad scandals of the Bush administration. Such a prospect remains remote.



I honestly would not put anything past the Republican powers. Rove is capable of any kind of conspiracy. Bush should definitely watch his health and safety.

Irradiated Oil

The Blogging of the President: 2004



Stirling Newbery is better than anyone I know of, at giving people the really Big Picture.



He identified the 2004 election as a watershed election, similar to 1824, 1860, 1896, 1932, 1968 in the breadth of its implications for the politics, which followed.



Today, he identifies the paramount economic issues underlying the politics. I think he is dead on. We have built an economy on petroleum, and for a variety of reasons, we have to give it up, and fairly quickly.



Thursday, June 2, 2005

Priorities | Liberals Against Terrorism

Priorities | Liberals Against Terrorism: "what's up with the Bush administration rushing to name the pro-Enron Chris Cox as the new SEC Chair when AFAIK there's been no similar rush to fill long-vacant counterterrorism slots and top Treasury jobs, the State Department is still waiting for Karen Hughes to do whatever she's doing, and there's been no US ambassador in Iraq for some months now?"



sniff, sniff . . . one almost might suspect a corporate scandal in the offing, which is being nipped in the bud by firing Donaldson and bringing in Cox. Hmmm.

Billmon

Billmon: "it's still hard to escape the conclusion that the American people have had, generally speaking, plenty of opportunities to learn the filthy truth about this administration and this war -- that is, if they were actually interested in the truth, which many of them (up to 51%, judging from the last election) apparently are not.



What the health of the Republic requires, in other words, may not be a new crop of leakers and whistleblowers, or a fresh young generation of Woodwards and Bernsteins -- or even a more independent, aggressive media. What it may need is a new population (or half of a population, anyway), one that hasn't been stupified or brainwashed into blind submission, that won't look upon sadistic corruption and call it patriotism, and that will refuse to trade the Bill of Rights for a plastic Jesus and a wholly false sense of security.



That's a much taller order than asking the Gods to send us another Deep Throat -- or even a Luke Skywalker. It's also not an easy thing for liberals, with their old-fashioned faith in democracy, to face: That the Evil Emperor might have a majority (a narrow one, but still a majority) on his side. But a truth isn't any less true for being politically unpalatable.



Which is why right now it's easy for me to imagine Richard Nixon, looking up from the inner circle of hell and lamenting his bad luck in being elected to the presidency just 30 years too soon."



Bush II has produced more scandal than all of the Administrations of the 20th century put together, and a majority of the American People, fat (very fat), dumb and Happy? refuse to be shocked or outraged.



That's why the perverse hope for a perfect storm is about the only slender thread, on which a true patriot can hang her hopes for her country's redemption.

Wreck It and Run - by William S. Lind

Wreck It and Run - by William S. Lind: "When Rumsfeld leaves office, what will his successor inherit?

#



"A volunteer military without volunteers. . .



"The world's largest pile of wrecked and worn-out military equipment (maybe second-largest if we remember the old Soviet Navy). I'm talking about basic stuff here: trucks, Humvees, personnel carriers, crew-served weapons, etc. This is gear the Rumsfeld Pentagon hates to spend money on, because it does not represent "transformation" to the hi-tech, video-game warfare it wrongly sees as the future. . .



"A military tied down in a strategically meaningless backwater, Iraq, to the point where it can't do much else. . .



"Commitments to hundreds of billions of dollars' worth of future weapons programs that are militarily as useful as Zeppelins but less fun to watch. . .



"A world wary of U.S. intentions and skeptical of any American claims about anything. . .



"We will be lucky if we can get out of Iraq with anything less than a total loss."



Will these failures be blamed on Democrats or Republicans? Politics is dramatic manipulation of events to create meaning.



We are heading toward one of two political futures. In one, things finally spin completely out of control, well before the 2008 election, and the moderate middle loses its misplaced faith in the Republicans. In the other, the Republicans manage to hand off the country to Democrats in 2008, and the Democrats start acting responsibly -- they pull out of Iraq (who lost Iraq? the Dems, of course, it was all going so swimmingly under Bush); they raise taxes, they watch helplessly as the Chinese stop loaning us money to buy their stuff at Wal-Mart, etc. The Democrats are thoroughly hooverized, and the Republicans dominate the country politically to the end of time.



The "Coming Perfect Storm" -- coming by 2006 or so -- is the Democrat's best semblance of "hope". The Republicans are forced by the Iraqis out of Iraq; the housing bubble bursts, taking the economy with it; the Chinese let the dollar crater.



The hard core of the Republican Party will not be the least swayed by any of these events. Nothing penetrates their double-digit intelligence. But, the moderate middle is results-oriented. Stupid, but results-oriented. If the Democrats, say, withdraw from Iraq and raise taxes -- no matter how necessary and responsible those policy choices may be -- the Democrats will get blamed. If the country gets thrown out of Iraq and experiences a major recession before the Republicans can flee the scene, the Republicans may get blamed. I say, "may" because, let's fact it, Republicans own the corporate right-wing media, quite literally. Katherine Graham and Otis Chandler are long gone.



Democrats need to be in a position to say, "I told you so." And, Democrats -- well, it seems unlikely, but I really wish Democrats could be in a position to push radical change in the form of a repeal of the Republican revolution.



Change the media ownership rules to destroy the corporate right-wing media.



Unionize Wal-Mart.



Enact progressive income taxation and bring back inheritance taxes.



Stop oil drilling in wilderness areas; restore the Clean Air Act, etc.



Amazon.com: Books: The Stock Ticker and the Superjumbo : How the Democrats Can Once Again Become America's Dominant Political Party

Amazon.com: Books: The Stock Ticker and the Superjumbo : How the Democrats Can Once Again Become America's Dominant Political Party

"Perlstein offers a vigorous critique and far-reaching vision that is a thirty-year [!!!] plan for Democratic victory."

Oh, so little faith in the coming storm!

Given the established patterns of American political cycles, the Republican Party's majority should last until the Presidential election of 2036 or 2040. So, Perlstein may be on to something. (Unfortunately, I will be past 80, by then, and no longer much interested in reestablishing the Enlightenment.)

Wednesday, June 1, 2005

Bloomberg.com: Germany

Bloomberg.com: Germany: "Inflation and growth differentials ``can lead to a meltdown in a couple of years, the collapse of the euro,'' the German magazine quoted Joachim Fels, chief fixed-income economist at Morgan Stanley, who took part in the meeting, as saying."



The possibility that China's faltering support of the U.S. dollar might trigger a crisis is a favorite of those fearing a coming storm. But, here's a new storm cloud on the horizon: a unified currency is not an entirely happy experience, evidently.



Just as an aside, it might be noted that Europe would probably benefit from a bit more Euro inflation. A slightly higher inflation rate might help lubricate the gears of the European economy.