Keynesian Economics and the Business Cycle: Or why are there no new jobs and we're about to lose the house?

INTRODUCTION:
Brad Delong writes about the current GDP report and the possibility that the Fed intervention has spurred a real-estate bubble. First let me state that Alan Greenspan, the chairman of the Federal Reserve Board, has done in my opinion a good and sometimes great job in minding the economy. However, the power of the Federal Reserve Chairman to affect the economy is primarily Keynesian in its nature.

The Federal Reserve Bank was established to prevent shocks and panics like those associated with the Great Depression. Over time, the role of the Federal Reserve has evolved to mulitples roles such as regulatory, monetary policy, and including the promotion of price stability. A prime example of a failure of price stability was "Stagflation" as occured in the in the 1970's and was associated with Federal Reserve monetary policy as well as the oil shocks of the period. Stagflation is a term coined to denote slow economic growth as well as rising prices.

However the "jobless recovery" (Federal Reserve Board, CSM) is still here unless the February 6th 2004 report is significantly more robust than I'm expecting.

ANALYSIS:
The question is then "why?" is this happening. Keynes advocated a theory of economics that argued that uncertainty (or inefficiency) in supply and demand balances would mean that full employment would not necessarily be reached without government intervention. On the other hand, "Free Market" economists like Mark Skousen argue that government intervention is what creates boom/bust cycles:

" Fortunately, most economists now recognize that government's monetary and fiscal policies are the main source of economic and financial instability in the world today. In fact, more and more college textbooks teach up front that the economy is relatively stable at full employment; this is known as the "long-term growth model." The short-term Keynesian model is taught at the end of the textbooks, where government intervention is recognized as a destabilizing factor in the economy and the chief cause of the boombust cycle. See Roy Ruffin and Paul Gregory's Principles of Economics and N. Gregory Mankiw's Economics."

So if this is the case who is right? Well, unfortunately it seems that both Keynesian and 'Free Market' economists are correct. How can they both be correct? Well, it's quite simple. The Federal Reserve controls interest rates and monetary policy (Fiscal implementation belongs to the Treasury department). Using this power, the Federal Reserve Banking system as the "lender of last resort" can effectively prevent panics and minimize shocks to the economic system. However whenever the Federal Reserve pursues a policy that deviates from true market conditions it creates excesses that build up and cause "irrational exuberance" that may create a financial bubble and the accompanying shock of its bursting. However once the bubble has been created, the Federal Reserve does not have the power to magically wave its hand and make it disappear. It can only once again using monetary policy and setting interest rates manage to "cushion the shock".

John Cochran writes on unsustainable growth of which we saw quite allot of with the Internet bubble bursting.

" Unsustainable growth occurs when the central banks's creation of credit (often accompanied by crony capitalism) allows investment to exceed available savings. The amount and type of investment and growth are not consistent with preferences and resource availability. The process generates significant malinvestment and the possible consumption of capital. The downturn is inevitable because production has been misdirected by central bank action. "

As Christopher Farrell of Businessweek notes there is a discrepency however. The full economic "crash" never happened:

" But when the dot-com bubble burst, the investment Calvinists warned, the market collapse would take both the New and the Old Economy down with it.

" Well, it sure looks like the Internet balloon has popped... But where is the economic crash?"

So what did happen? Well the Federal Reserve intervention prevented "finanical contagion" and a crisis of confidence. This deferred the economic "crash". Why do I say deferred? Well the problem is that the excesses in the system were never wrung out. The asset liquidation as part of the business cycle (and the "Austrian school/theory of economics) hasn't been deflected - it has merely been delayed and shifted from stocks to stocks AND real estate.

As John Cochran notes:
" The recession is the corrective phase of the cycle; market forces have begun to reassert themselves. Once a crisis has begun, policymakers must walk a fine line. If market processes are not interfered with by government policies, the recession that follows the crisis will be sharp and short and will eliminate and correct the past errors and malinvestments. In other words, the economy moves on.

" If the government interferes with the market processes, however, the adjustment may be postponed, but the recession eventually will be more severe and, most likely, more prolonged... "

Well that's theory. Are we seeing something like that happen? Well according to Brad Delong we are in fact seeing that now:

" The argument seems to be that when the NASDAQ crashed the Fed sharply lowered interest rates... in a highly normal, expected, and predictable fashion--raised property prices...

" And then--I think the next stage of the argument goes--a positive-feedback loop got going... the Fed's accomodation has set off a real estate bubble--and planted a ticking time-bomb in the American economy, for when the real estate bubble pops the consequences (collapsing consumption spending, large-scale foreclosures and household bankruptcies, corporate bankruptcies, et cetera) may well be dire."

Brad Delong then proceeds to ask: What is the alternative?
" But if it is true that America is embarked on an unsustainable real-estate bubble, and if that bubble is driving high consumption spending, then how, exactly, would raising interest rates help? Raising interest rates lowers the fundamental value of real estate, yes. But the key problem is the gap between the current "bubble" and the fundamental value of real estate. If that's the problem, you don't want to increase it by lowering the fundamental value of real estate, do you?"

Well what is the alternative?
Under the present economic system there are only three choices. The first is to accept that there will be an asset bubble created by Federal Reserve intervention in the aftermath of every intervention to prevent a major shock or contagion situation. The second is to drop full employment as a goal of monetary and interest rate policy. The third is to create better regulation of markets and have the Federal Reserve more closely follow "market factors" that would dictate the interest rates so as to prevent unsustainable growth. In other words, now that the excesses are in place there is no way to "wring" them out of the system. They must be played out in one fashion or another. It is only on the front end, by keeping interest rates and credit standards sufficiently rigorous that unsustainable growth is not produced in the first place. The question is not whether or not Greenspan should have raised interests after 2000 instead of dropping them, but why did Greenspan back off on raising interest rates in 1996.

What happened is that Alan Greenspan raised interest rates, the financial markets got spooked, and then he backed off. This is the mistake that Greenspan should be held accountable for. Given that he clearly perceived the dangers of unsustainable growth, why didn't he stand firm and so prevent irrational exuberance from reaching such heights? The economy needed to be cooled off but he wasn't willing to stay the course! One might argue that it was politically unacceptable to the Clinton Administration, but the independence of the Federal Reserve Board is key to the working of the economy.

Given that we are in this mess now, what is to be done? Part of the problem is that the Federal Reserve Board control of interest rates is (perceptually at least) a blunt instrument. The Federal Reserve pronouncements are attended to much too closely, and the slightest move on their part or shift in the smallest wording is cause for celebration or dismay in the financial markets. A policy intervention approach in which the intervention is more gradual and more incremental is needed. The Federal Reserve Banks change interest rates by buying or selling into the bond markets as well as setting overnight lending rates to banks. A more market style forum where the Federal Reserve can intervene as a driving force rather than setting categorical "break points" is needed badly.

Short Term Solutions to the coming Housing crash.
1. In the short run, the Federal Reserve can take the edge off the real estate bubble appreciation by forcing/advocating the tightening of lending standards. Part of a bubble bursting's sting is not just that people are speculating on an asset and inflating its price, but that they borrow money to do so. The prospect of being forced to pay it back is what drives the fear created by an asset price shock and forces a mass firesale.

2. At the same time, the Federal Reserve can work with the subsidied mortgage lending companies such as Freddie Mac / Fannie Mae to get more real home owners into the market to provide a "base" to support the speculative over-extension.

3. The Federal Reserve needs to work with HUD in order to help develop low-ROI housing nation wide. Allot of the speculation driving the demand in the real estate bubble is for high end homes. This is because high-end homes offer a much higher Return on Investment for the same capital ("dollar for dollar value"). A person can make allot more money buying and selling expensive homes then building and selling low-rent or starter homes on the same lots. By building a strong "base" into the speculative over-reach, you'd get more real home-owners into the market to keep demand up. This is because people often trade-up using the asset appreciation in their first home to finance a better one.

4. Every financial bubble and its asset speculation is typically driven by financial instruments or organizations that facilitate such speculation on the top-end of large scale investment. In this case, the instrument is REIT's or Real Estate Investment Trusts. Typically such instruments in a true asset inflation bubble become riddled with corruption and criminal evasion of regulations. After the crash typically such excesses come out into the full light of day that were ignored during boom times. We could save ourselves allot of pain later by reigning in the REIT's (and other instruments) today before they go bust. By doing so we could again blunt the economic "reset" caused by the correction deferred and magnified by Federal Reserve intervention.

SUMMARY:
The coming real estate crash is driven by the magnified correction to the economic system that was created when the Federal Reserve attempted to intervene to cushion the shock of the unsustainable growth created by its failure to rein in the economy when times were good in the 1990's. Intervention itself per se to deal with shocks and contagion do not necessarily create such deferred and magnified corrections. Only interventions that attempt to delay the reckoning of unsustainable growth created by a deviation from "true market conditions" in interest rate and monetary policy are subject to this criticism. Thus the Austrian School, 'Free Trade' economists, and Keynesian economists are correct about the value of central bank intervention depending upon the circumstances.

The only way to avoid a large scale crash at this point is to make very fast regulatory and structural changes to the economy that would help dissapate the correction to something bearable. In the absence of such regulatory and structural initiatives we may expect the correction to be worse than the original affects of the bubble deflation shock would have been. This is supported by micro-economic observations of effective "asset-stripping" when home refinance and home equity loans allow individuals to convert asset appreciation and principal payments into consumer spending without decreasing consumer debt. Keynesian style intervention by a central bank can be justified after a period of unsustainable growth, if and only if the delaying of the correction is used to introduce structural and regulatory reforms that would disappate the asset inflation bubble. This would allow the Keynesian goal of full employment to be achieved, while satisfying the criticisms of the Free Market and Austrian School about the wisdom of government intervention. Reforming the markets and introducing structural economic modernization to disappate the asset inflation are the key steps to making modern central bank intervention work.

There is ample sign that the Federal Reserve needs to take action quickly. Recently a small deletion of language suggesting that the Fed might not keep interest rates at their historical low was the cause of a market fallback. This fallback was only halted by the recent GDP announcement which led the investors to believe that Fed would use the "low" GDP growth (4% in fourth quarter) to not raise interest rates. Ironically, this mirrors the over-sensitivity and asset price falls in 96/97 that accompanied interest rate rises then (and in retrospect were signs of an already over-valued market). In fact asset valuation has risen once again to all time highs in stocks, and now also in real estate. This suggests to me along with the current extreme sensitivity of asset prices to Federal Reserve interest rates that we are already nearing a "top" in the market after which an incipient economic crash will ensue shortly. Therefore strong and quick action must be taken NOW or there will be hell to pay in the near future.

Finally, what about the jobs? An asset inflation bubble typically represents an inefficient allocation of capital in an economic system. Asset liquidation as part of the creative-destructive system of Capitalism is needed to free up that money so that it can be used to create new businesses / investments that will create greater economic wealth. Part of the reasons why the jobs aren't being created is that while the Federal Reserve is pumping money in the economy, it is being sucked back up into this speculative cycle. The cycle needs a real economic correction in order to release that money tied up in Wall Street and Trusts back into the ordinary healthy economic networks that form the "real economy" on Main Street. Taking on the regulatory and structural reforms are needed in order to "kick start" the economy back into real growth. Failure to do so will result in spectacular wealth destruction on a scale unpredented since the Great Depression.

Whew! That was a long screed!

Doubts on the Presidency: Protecting Americans or Protecting what America means?

Daniel Drezner in his weblog comes out with a thoughtful statement:

Here's my position -- I'm genuinely unsure of who I'm going to vote for. More and more, Bush reminds me of Nixon. He's not afraid to make the bold move in foreign policy. On domestic policy, Bush seems like he'll say or do anything, so long as it advances his short-term political advantage. If Karl Rove thought imposing wage and price controls would win Pennsylvania and Michigan for Bush, you'd see an Executive Order within 24 hours. Andrew Sullivan and others have delivered this harangue, so I won't repeat it.

If -- a big if -- the Democrats put forward a credible alternative, then I could very well pull the donkey lever. [emphasis added]

This is an extraordinary statement. Dan has been no apologist for the Administration, but like many Republicans has often chosen to quietly express his dismay with the President's policies. The ultimate problem though is that the Democratic candidates are still tripping over their own feet. There's a seeming "fatal flaw" with each and every last one of them that is on prominent display. One could argue that some are fixable, but it's a hard thing to genuinely and credibly change one's approach to life perhaps even more so since it has proven successful to these gentlemen in the past.

My position is pretty simple on the topic. The first duty of a President of the United States of America, is surprisingly not the directive to protect the populace. Instead every President swears an oath of office which binds him to the duty (that is shared by all citizens) to "... to the best of my Ability, preserve, protect and defend the Constitution of the United States." So protecting individual Americans is not the President's first priority, though rightfully Americans seek a President who will protect them, but the President must as his first duty seek to protect what it means to be an American. There is a subtle but all important difference between protecting Americans as a primary obligation, and protecting what it means to be American.

Some may argue that the President is right in his actions. Others may argue that even if they disagree with his tactics, that he is a more credible Executive than his Democratic opponents. However, each American should be ready to lay down their lives if necessary to protect the way of life embodied in the Constitution. If that is our first responsibility and if it is true indeed that "More and more, Bush reminds me of Nixon.", then our first responsibility is to democratically remove a President who however seemingly capable of realizing his ambitions includes in those ambitions undermining what it means to be American.

As Benjamin Franklin observed: "They that can give up essential liberty to obtain a little temporary safety, deserve neither liberty or safety...".

Whitewash or Hogwash? White House refuses even Kay's plea for inquiry

WASHINGTON, Jan. 28 — David A. Kay, the former chief weapons inspector in Iraq, called on Wednesday for an independent inquiry into prewar intelligence about Saddam Hussein's weapons programs, but he said he did not believe that the Bush administration had pressured intelligence analysts to exaggerate the threat.

The White House immediately turned aside the calls from Dr. Kay and many Democrats for an immediate outside investigation, seeking to head off any new wide-ranging election-year inquiry that might go beyond reports already being assembled by Congressional committees and the Central Intelligence Agency.[emphasis added]

As reported in the NYT.

Now that's interesting. Personally my initial reaction was that while Kay had been very careful to stick to the facts in his reports of lack of Iraqi WMD, he was clearly in Bush's corner. His hyperbolic language provided a cover for the President to claim even in the SOTU that Iraq had been at least involved in "weapons of mass destruction program related activities". Which is pretty vague. It's sort of like saying if you went to a plastic surgeon for some Botox treatment you were in with the crowd trying to make the Atom Bomb. Botox is considered a biological weapons material. Bush actually earlier called the discovery of a single vial of a weak strain of Botox - yes quite similar to the kind used in cosmetic treatments - as "proof" of an Iraqi weapons programme. Now that Kay and a Senate commitee have apaprently sided with Bush on who was at fault:

The report is already being described by Senate Republicans as evidence that President Bush and his top advisors were primarily the victims, not the abusers, of faulty intelligence about Iraq. But some administration critics are calling the report a whitewash. And Senate Democrats insist its scope was so narrowly focused that it fails to present the full picture of an intelligence failure on Iraq that now appears to have bordered on the catastrophic. [emphasis added]

Now however, meek Kay who has run cover for the White House in exaggerating every possible find - a few college university chemistry department with standard off the shelf chemicals becomes a sinister "network of laboratories" supporting a chemical weapons programme - has called for an inquiry. One that he no doubt means for the blame to be shifted entirely onto the much abused Intelligence Agencies, and no blame at all placed on the politicians who put their fingers in their ears and shouted "I CAN'T HEAR YOU!!!" every time someone brought up any evidence contradicting what the politicians wanted to hear.

Yet this scape-goat of an inquiry is too much for the White House! They will brook no questioning whatsoever! In fact despite admitting that "some errors" were made, Condi Rice denies any need for a review of what went wrong whatsoever(NYT).

WASHINGTON (Reuters) - President Bush's national security adviser acknowledged Thursday some prewar intelligence about Iraq was flawed but brushed aside calls for launching an independent investigation.

That's very interesting. They won't even give in a single inch, not even at the suggestion of their tame dog Kay. Well, well, well. Personally, the oldman honestly thought that nothing could ever or would ever be pinned on ole GW Bush. Whether or not they were guilty, the oldman figured that they'd covered their tracks well enough or had a handy scape-goat ready to take the fall for the big guy that it would never ever be laid at the Administration's top door. Could it be that Bush has the equivalent of Nixon's tapes somewhere, that somewhere they've slipped up and there is some sort of incriminating evidence? Do they have something to hide? Veerrryyyy interesting. Very very interesting. The oldman will continue watching this issue closely.

Meanwhile Senator John McCain (AZ-R) splitting with many of his Republican colleagues has has called for an independent investigation as reported by the AP.

WASHINGTON - Parting company with many of his fellow Republicans, Sen. John McCain said Thursday he wants an independent commission to take a sweeping look at recent intelligence failures.

The White House has dismissed the proposal, saying the CIA is committed to reviewing the intelligence behind claims that Iraq had weapons of mass destruction. The Bush administration also argues that the weapons search is not yet complete.

New York Times demands Greenspan condemn Bush spending spree,

The NYT Editorial calls on Alan Greenspan in order to testify to Congress that Bush's spending is out of control. Frankly, is about time!

"The cut-taxes-and-spend Bush administration and Republican leaders in Congress
are engaging in serious economic malpractice. The latest evidence of this was provided
on Monday by the nonpartisan Congressional Budget Office, which now expects the
federal deficit to amount to $477 billion this year. That's an alarming 4.2 percent of
gross domestic product and $100 billion more than last year's deficit, and the agency
expects the government's debt to increase by $1.9 trillion over the next decade.

Despite this warning from an office run by a conservative former White House
economist, Douglas Holtz-Eakin, the administration remains in denial. Not only
does President Bush insist — as he did a trillion dollars of red ink ago — that the
deficit is manageable, but he also wants to make his tax cuts permanent, even
though many of them were passed with an expiration date to keep their cost down.
That would cost the Treasury an additional $2 trillion over the next decade, the
budget office says." [emphasis added]

It's time for a national intervention folks. Greenspan is like the trusty Dad who can't bring himself to believe his son is wildly out of control. Meanwhile, Bush and co. are the sons living it up on a prodigious buying binge with the national credit card. Only of course, in this scenario the son can fire the dad. Hmmm.... maybe we fire the son? Maybe? We'll see in November!!!

Comments enabled ...

It's a somewhat amusing jest that perhaps nobody is reading this weblog but me. That's entirely possible. Given the vastness of information on the net, there's no real reason why one more "amateur" pundit should make any particular impact. It wasn't ego that led me to writing this blog. It was more ... one could call it consternation. After spending the better years of my life dedicated to the discovery of pragmatic truth and practical perfection, it felt disturbing to tune back into "planet earth" - a world of misdirection, half-lies, and deceptions made up whole cloth and embroidered with confusing ambiguities. It wasn't that the world confused me. The most confusing thing was that people were confused by the world. It is if one is watching one's fellow citizens be befuddled by a silly carnie shell game, and seeing their money taken from them.

That sense of outrage mixed with slight chagrin led me to begin writing. What's the point of truth if no one is willing to test their ideas? What is the point of rationality and reason if the very presumptions and assumptions we use as our premises are riddled with holes poked by doubt and ambiguity? No wonder why people can't tell what is going on, and in that vacuum the unscrupulous move into the void with their every step rationalized by gilded lies. There's a reason why we tell children not to take candy from strangers. An equally good rule in life is that if someone tells you that it isn't going to hurt, it probably will hurt like hell. The third rule in life one should follow in the oldman's handbook of hopeful cynicism is that if anyone tells you that it's for your own good, it's probably for their's.

Is that delightfully optimistic enough for you? On the contrary, my experience has found that the more skeptical I am of other human beings the more happy I am myself. Not only am I fooled less often, my own actions gain a clarity and confidence of purpose that would be impossible if I went around doing something as foolish as actually believing what people said. Even people who have no intention of lying will often confabulate (tell tall tales) in order pretend to know more than they do. Others will quite honestly argue from ignorance or prejudice that black is white, and that B is A, because they heard it somewhere. As P.T. Barnum once said, no one ever lost any money underestimating the public's intelligence. Some dishonest souls will loudly sell you a bill of goods and then shrug when you call upon them to explain the shortfall in the case they argued so passionately before. They were passionate certainly- about taking you in. The older I get, the more I long for the code of Hammurabi. There's this neat clause in there supported by Persian culture: public lying is a death penalty offense. If only we could get that kind of values back into the mainstream! (Now my Republican roots are really showing)

This sort of deception does not arouse in me existential doubt however. Remember? I've spent my whole life harshly testing myself as much as possible against a variety of academic, conflict-oriented, personal, and organizational challenges. I know how to win. I know how to prevail amidst doubt and uncertainty. I know how to call my own fouls. This sort of confidence is rare in a world where people first take as an assumption that we should believe in what others tell us, and then test truth by examining their credibility. Instead I believe in myself, and then test the truth by examining how well I stand up to the harshest rigors I can contrive to face.

A Neo-Darwinian ethical "survival of the fittest" epistomology is what I call it. My dad would have called it being harder on yourself than anyone else, and then demanding high standards. So I don't know if anyone is listening, besides those friends and family I've clued in to where I'm wasting copious amounts of my free time. It doesn't matter. Like always I'm doing this for me. This is another chance for me to become better than I am - in writing, in argumentation, and in ideas.

But I was curious if anyone WAS reading at all, so I enabled comments. We'll see. Right now it's even odds no one ever comments. ;-)

The Big Chill, a fluke or a forewarning?

Right now, things are cold out there. It's not that it's particularly cold compared to winter's of memory, but there's a pattern musing on the edge of the oldman's mind. The unprecedented (in modern times) heat wave in Europe this past summer that killed thousands of lives; the longest recorded stretch of time in Oklohoma without twisters (tornadoes); and now the artic blast that has frozen half the USA. The oldman had allot of time to think about it today as he drove through the teeth of a blizzard. There seems to be a pattern of extreme weather this past year, including the California fires, that while individually has precendent altogether raises some neck hair on the oldman's intuition.

Paul Epstein also has thoughts on the matter, in his op-ed in the NYT.

Normally, water circulates in the North Atlantic like this: Cold, salty water at the top sinks; that sinking water acts as a pump, pulling warm Gulf Stream water north and thus moderating winter weather. But now, fresh water from the thawing ice and heavier rain is accumulating near the ocean's surface; it's not sinking as quickly. (The tropics are faced with the opposite phenomenon. According to Dr. Ruth Curry and her colleagues at the Woods Hole Oceanographic Institution, the tropical Atlantic is becoming saltier; as warming increases, so does evaporation, which leaves behind salt.) The "freshening" in the North Atlantic may be contributing to a high-pressure system that is accelerating trans-Atlantic winds and deflecting the jet stream — changes that may be driving frigid fronts down the Eastern Seaboard. The ice-core records demonstrate that the North Atlantic can freshen to a point where the deep-water pump fails, warm water stops coming north, and the northern ocean suddenly freezes, as it did in the last Ice Age. No one can say if that is what will happen next. But since the 1950's, the best documented deep-water pump, between Iceland and Scotland, has slowed 20 percent.

Why now? After all, the planet's previous periods of global warming resulted from changes in the earth's tilt toward the sun, and recent calculations of these cycles indicate that our hospitable climate was not due to have ended any time soon. But because of the warming brought by the buildup of carbon dioxide, mainly from the burning of fossil fuels, the equations have changed. We are entering uncharted waters. It's something for New Yorkers to ponder as they bundle up.

The problem is that the atmospheric and metereological conditions don't respond linearly. It isn't as if one can put out one change, and then measure conditions to see how they will react. Changes in the environment often take years to have any significant impact, but this doesn't mean that the impacts are minor. Small incremental changes can over time suddenly result in a massive reactionary change. Think of earthquakes. Over time the crust of the earth moves in small increments, rubbing tectonic plates up against each other. This compaction builds up tremendous energy. Then one day it all cuts loose. Similarly often earthquakes are quiescent for decades or even centuries, but swell up and blow their tops in a matter of mere weeks or even days.

Not exactly pleasant thoughts to be thinking!

Another rant on economics,

Note: This is another posting that originally went on Dan Drezner's website responding to a followup Dan did on outsourced jobs. Why pick on Dan so much? Well, to be fair Dan is a thoughtful intelligent writer which is what attracted me to his website so much. However, Dan makes no bones about "taking on" writers such as Krugman who he feels fall short in their arguments. Well, Dan is an unabashed proponent of "free-trade" but hasn't really told the other side of the story. So I am. That's all there is to it. If Dan weren't able to put together a half-way decent argument, I wouldn't bother rebutting them. So in a way, it's sort of a compliment. ;-)

Oh boy!

Where to begin? First comparing the automation and then information revolutions to the outsourcing (manufacturing or intellectual) is like comparing apples and oranges. Why? Because the automation and information technology allowed the savings in profits to be reinvested directly back into the same national economy. Outsourcing contains the possibility of "leakage" to another economy. In addition, there is the question of production infrastructure - it's not just jobs moving but the factories, research centers, and the demand economy for skilled labor moving overseas.

For outsourcing to result in a net gain is a subtle argument. You see, a company pays less to have a worker overseas do the job for less. But unless they pay the worker a negative amount of money, they can't actually make more money in absolute retail pricing (without raising prices). What they do is convert the labor costs to profits.

Now this money they pay to these workers, plus the money that would go into building the facilities and the stimulus on the education system for producing skills for these workers, clearly is being injected into a foreign economy.

For there to be a net benefit to the domestic economy there must be a ROI argument. That is the company must get a better return on investment of capital, and being able to spend the same amount of capital to get a better return (because of higher profit margins) they produce more wealth. And this created wealth must be greater than the loss due to price-competition and "leakage" in production infrastructure and outright labor costs to the other country, for it to be beneficial to the domestic country.

Thirdly, market liberalism in "free-trade" has some seriously contradictory arguments. One argument they make is that foreign investment is the way to help third world countries develop. Indeed, it is a way to do that since the transfer of jobs, facilities, an education demand economy, and other aspects of production infrastructure cause a nation to develop. However, the citizens of the other nation will soon become more educated and capable of doing better work. So they will start competing for information tech, knowledge, and creative type jobs. Market liberalists also claim (correctly) that competition reduces prices. This is correct. Even if one were not to factor in the lower cost of living factor, the basic laws of economics dictate that a greater supply relative to the same demand leads to a downward pricing pressure. Thus this "outsourcing" job transfer overseas would lead to downward labor wages *across the board* in the more "advanced" domestic economy.
Thus a "rising tide" would NOT lift all boats! This would be reflected in practice by a largening discrepency in incomes - which we are seeing.

If a pie grows, but your cut of it shrinks, you can end up with a smaller slice of pie than if the pie had stayed the same size but your cut of it had stayed the same too. You do the math.

Finally, the "outsourcing" argument does nothing to address the concern of simply being "outcompeted". Once these massively populated nations have modern social infrastructures, manufacturing capacity, and educated populaces what's to stop them from simply beating our pants off in a straight up contest? Unless you "magically" believe that the laws of market competition have ceased to apply to nations, one cannot assume that the direction of the flow of profits from global productivity increases will necessarily continue to flow to the United States. The world may get richer - but the US may get poorer. Market distorting factors such as inequities in intellectual property protection, working environment standards, government subsidy of education, etc. will only exacerbate this problem.

In other words, we're all in big trouble because the professors like Dan have missed the forest for the trees.

Getting our asses whooped by India and China, failed economic modernization

Here at Dan Drezner's website, Dan argues that outsourcing fears are overblown. In it he quotes somebody who argues that the "jobless" recovery is just a "cyclical" (temporary) adjustment instead of a permanent loss by quoting somebody (yes, it's confusing- I know) that says:

Some point to the jobless recovery as evidence of offshoring's impact, but the lack of jobs is just as likely the result of booming productivity and the economy's (until recently) anemic pace. "I think people are confusing the business cycle with long-term trends," says Daniel Griswold, an economist at the Cato Institute. "People are looking for someone to blame. They say, 'Aha, it's because our jobs are moving to India.' If you look at the late 1990s, though, all these globalizing phenomena were going on." In other words, it wasn't that offshoring practices changed; it was that the economy slowed.

*-*-*
Here is the body of my rebuttal on his comments section:

First of all, I'm amazed that Dan here wants to treat the issue as if all the authoratative comment is pro-trade, that the job losses are cyclical rather than structural, and that criticisms of "free-trade" are all protectionist or pandered for partisan advantage.

Here is a link to a book arguing that the losses are structural and not cyclical. Here is Peter Drucker's book, arguing that the knowledge economy is here and he's also argued that America is already being outcompeted by India and China. Here is Tony Blair, acknowledging what anyone who works at a research university knows: there are literally several dozen scientific researchers from China for every single new American graduate student.

Also India has highly protective domestic corporation laws, that put strong limits on foreign investment. In addition, China has massive intellectual rights problems. Even if one were to buy the argument that outsourcing jobs to China doesn't eliminate US jobs, it's still a terrible policy because the Chinese get to effectively steal US trade secrets to produce brand name imitations or knockoffs of their own. This "patent piracy" is rampant in China as any US exec who does business there can tell you.

"Free-trade" market liberalism without an equal playing field in foreign capital investment and intellectual property rights protection is a suicide pact!

The primary hypothesis being bandied about is that manufacturing and now hitech services outsourcing to India and China is "okay" or even "good" because US brand name merchandising forces repatriation to corporations here in the US leading these corporations to spend money, and then through "trickle-down" economics this eventually leads to the creation of compensatory jobs.

This proposal is dependent upon several assumptions 1) That the US will remain the knowledge-capitol of the world 2) That US brand-name merchandising allows repatriation of profits (and therefore the lob losses are cyclical and not structural) and 3) that intellectual property rights and foreign capital investment rules are an "even" playing field so that the other nations can't steal US R&D and then set up shop with protected companies that the US companies can't get at.

Well as it turns out, every single one of these assumptions is either wrong or soon about to be proved wrong.

Okay, wake up people. It's not just about a few jobs going and new ones replacing them. It's about the US being displaced completely as the commercial and innovative center of world capitalism by being sheer outcompeted by India and China. Now unless you happen to have a "magical" belief that no matter what the US will remain "on top" and that profits will disproportionately always flow to the US mainland, and that capitalistic market competition doesn't apply to countries the same as it does to companies, then the only logical conclusion is that this country is in serious trouble.

*-*-*

Read more about it at Oldman's posting "Are we exporting America?" and "Economic decline of America".

UPDATE: Ignatius of the WaPo and the WaPo Editorial weigh in on the dollar problem and the "jobless economy" respectively. Read the WaPo Editorial for a counter-argument but my opinion is still that this "cyclical shift" argument ignores the dangers of simply being outcompeted rather than just being outsourced.

Ignatius has some nice comments including:
Discussing the falling dollar at a panel of the World Economic Forum here, a former U.S. senator said the greenback's decline was just a blip. The abiding fact was that for more than a century, in good times and bad, the world's investors have been in love with the American economy. And that ardor continues today.

Yes, responded a Chinese economist, but "love affairs always end."

Ashcroft condemns "evil chemistry", is "evil physics" next?

Look no matter what anyone says, John Ashcroft is not some scary creepy enemy of the Constitution of the United States of America. He's just a slightly unhinged but otherwise morally upstanding law&order Republican from Missouri with fundamentalist religious values. This isn't to say that I agree with his pushing of "Patriot" Acts I&II, but let's say there's a case for him simply being a parochially self-righteous but sincere man rather than a religious bigot as some have accused.

Sometimes though I wonder about GW Bush's judgement in appointing him to head the Justice Department as Attourney General, clearly a compensating sincecure for his electoral loss to Carnahan's widow Jean, instead of appointing somebody who oh, might for instance actually have some real experience in the courts. The fact that he sometimes spouts off inane comments, rather like Rumsfeld off his lease, only increases my doubt on the purely competency angle in the wisdom of his appointment.

Here's the AP story where Ashcroft condemns "evil science".

VIENNA, Austria - Even if weapons of mass destruction are never found in Iraq, the U.S.-led war was justified because it eliminated the threat that Saddam Hussein might again resort to "evil chemistry and evil biology," Attorney General John Ashcroft said Monday. [Emphasis added]

Yes, Ashcroft has just formally condemned "evil chemistry and evil biology". Next he'll be condemning "evil physics". Maybe you can tell the evil scientists from the "good" scientists because the "bad ones" wear black labcoats instead of the usual white labcoats. That could be the start of a whole new trend. Imagine a new professional society - the IAES: The International Association of Evil Scientists. Instead of having their professional conferences in Rio or Australia or San Diego like normal scientists, they could have them in North Korea, Cuba, Iran, and Yemen. Imagine the association newsletter titles: "Evil Scientist of the World Prize goes to Weaponization of Smallpox". Just think too, they could get Dr. Evil in order to be the first world President of the International Association of Evil Scientists.

Frankly, this sort of Keystone cop behavior in the Bush Administration severely undermines my confidence on their seriousness about the War on Terrorism.

For another thing, why is John Ashcroft, the Attorney General for the United States of America, speaking out on this topic? His portfolio is the Justice Department and prosecution of Federal crimes inside the legal system. Whether or not the invasion of Iraq was justified or not, it is not John Ashcroft's place or expertise in order to say. The fact that he's weighing in must be the result of some short-circuit sparked in his overly moralistic brain where he figures he get's to say what's right or wrong about anything. I can find no other plausible reason for the Attorney General speaking out on what should be an issue for Congress, the public, and the Executive branch in order to decide. So yeah, he is a little unhinged!

Sunday Confessions I

The oldman has been traveling the last few days and pitching in with some family friends to help out relatives. It's been funner than I ever imagined it would be. As a youth, the oldman was a somewhat distant surly teenager who often felt bothered when family members tried to drag him away from his obsessive self-training regimine for boring family stuff. Now the oldman recognizes this bizarre activity for what it is: love and caring. The oldman has always been old, being something of an "old soul" as some quaint old people once put it when encountering his younger incarnation. Now things are different. With time has come seasoning, both in acumen in the various joys / pitfalls of human nature and also in the living of a fulfilled life.

My youth was filled with an unrelenting focus on private measures of achievement and introspective journeys of intellectual investigation in all manner of sciences heathen and cutting edge. Dad was a workaholic, what he didn't throw into work he filled his hours with book studies and private tinkering with cars, electronics: you name it he did it. It wasn't until he passed away tragically that some old resentments died and I realized how much I loved him. It's a cliche that you don't appreciate what you have until you've lost it, but it's too true.

It's not like the memories of Dad's fits of anger, his frustration with my lack of interest in worldly success, or my uneasiness at whenever he simply tried too hard to get something across to me and it fell flat disappeared. Not a single fault vanished into dreamy nostalgia. He'd grown up fatherless, and while it was always known by me I never really tried to understand him. I had never given him credit for how obviously hard he had tried. My critical faculties were all too ready to fault him for his failings, and my pride was all too ready to disregard his advice in the face of my relentless search for excellence beyond human recognition or fame. Never once did I try to understand him.

I never tried to understand the marital dynamics and his own struggles with my grandmother that drove him to the brink of distraction. I know them all too well know because after his death, it became all too clear the tensions and pressures that tormented him because now I had to deal with their aftermath. Yes, he could go into a frenzy of anger sometimes but I could always stand up to him and face him down. He never wholly lost reason. But I only saw the anger, and not the provocation - absorbed as I was in my pursuit of private achievement.

My family never really knew these many long years of my true activities. Sometimes my father complained of how "mysterious" I was. My mother complained about my distance even when I came home. Like my siblings they only saw the aftermath of my struggles. In order to cloak them and the sometimes less than legal lengths I went to pursue my avocations I allowed others including my family to think the worst of me. That I was whiling away all my time playing cards with my buddies, that my medical problems came from being unlucky and not from less innocent injuries, and that sometimes that I was even slightly crazy rather than admitting all the "crazy" things I was doing. They only saw the puzzling paradox of a highly intelligent and talented young man, who was seemingly doing nothing with his life.

In truth I cared nothing for fame, recognition, or money. For years, I lived like a monk burning with the passion for only my investigations, discipline, and pursuit of skills and knowledge. Even the slight obligations of success - mortgages, families, and careers - I denied myself to give myself a purity of contemplation and a complete freedom to take any risk necessary to prove the true validity of my ideas. Sometimes I would purposely throw away opportunities, fail deliberately tests, and walk away from ludricously lucrative wealth opportunities. It was all a trap for me, an illusion whose attachments would prevent me from pursuing the epitome of my ambitions: Arete and Excelsior. Excellence ever higher or excellence ever better. Excellence for excellence's sake, and damn all the trappings of success that would distract me from that goal.

My family could only see the scars that I explained away or the ever expanding encyclopediac base of knowledge I was accumulating in all manner of endeavours. The latter occasioned them with great confusion, for if one could know or do so much (and my attitude could be very haughty and arrogant at times) then why was there no outward manifestation? It must have driven them nuts. They undoubtedly came to their own conclusions.

But in the end it was I who didn't understand my family, most especially my father. It was after his death, that it all hit me in one terrible blow. We'd quarrelled before his passing, and the last time I'd seen him alive I'd tried to patch things up. It was only a partial reconciliation with so many things left unsaid. To myself I said that this would be the year that I came into the open and shared all that I had done and cloaked under misdirection. To myself I said, that the very next time I saw him I'd finish making up with my father and we'd have that talk I'd always been meaning to have and spend more time with him. It sounds too crazy, but that's exactly the way it happened. When I turned to go away, my mother actually told me that I should go talk to him one last time, because who knows I might never see him alive again. She actually said that. And I did try (awkwardly) to hug him, but he'd only shake my hand. It was a brilliant metaphor for the whole of our relationship.

Then he died, and there would never be a next time to explain all, to ask for all sins to be forgiven, and to forgive all. It was only then that I realized that my utter insensitivity to the opinions of others, my obsessive drive for achievements that I shared with no one, and my inhuman ambitions of achievement were all just extreme cariactures of my own father's behavior. It should have been obvious, but it wasn't. I had promised myself that I would never turn out just like my father. I had succeeded all too well: I had become far worse.

At the same time, it all came flooding in. Everything that had been opaque to my understanding was illuminated. His frustration over my outwardly achievements were the reflection of the natural frustration of an ambitious man whose oldest son seemingly ignores all opportunity for advance. His lack of ability to communicate his genuine concern and greviances were reflected in my alienation from the rest of my family. His snappishness was the mirror of my own irritability. His unending curiousity was the dual of my pursuit for knowledge and truth for their own sake.

My siblings didn't know the details, but they knew of my long rocky relationship with my father that had culminated in estrangement before his death. So they blamed me in the aftermath of his death, a blame redoubled because I was distracted by the enormity of my own culpability in piling grief on his head before his demise. I cannot say they were wrong.

Many times my siblings have misjudged me, and I have humored them knowing that to do otherwise would be to blow my double-life apart. But that time though they were dead on. My mother recently told me in half humor and half reproach that she hoped that my father would haunt me in the light-hearted guilt-tripping fashion of which only mothers are natural virtuosos. He does haunt me. A few times a month now I dream of him. These are not chain-rattling dreams. He looks quite healthy and well. However they are not fuzzy dreams of nostalgia either. In them, he is just himself as he always is. He is still quintessentially himself. It is me who is overcome by remorse. It is me who reaches out to him. His flaws have not faded from my mind, but I no longer blame him for them because I finally understood the context from which his frustrations stemmed. I hope he continues to haunt me. Sadly, this is all I have of him now.

Also I admit to myself the ultimate truth, which is that I never had anything to fear from him. It was only my hurt feelings, childish resentments and snubbed pride nursed over the years that had stood between us at the end. I had traveled too far from that young boy in order for them to dominate my thinking, yet they did. He had changed too. He had mellowed over the years and tried for quite a while to make ammends. But I wouldn't forgive him for past slights and actual misdeeds. I had by my own measure completely outgrown the insecure young boy that had been overawed by my father's seeming wide-ranging expertise at anything he put himself to. I could admit that my own epic quest for excellence had been inspired by no other than trying to live up to the standard my father had set. Yet my heart was still too petty to reconcile fully with him before his demise.

The only balm is that before the end I told him how much I respected him. Not loved, but at least respected. I still remember the look of surprise on his face, as if I'd told him something he never expected to hear. That should have been a warning sign to me, a rebuke of how I had disregarded him over the years. It is a small thing to set against the look of pain and even moisture I'd brought to his eyes the day I'd shouted in frustration that he'd never given me a single good piece of advice. I'd never meant it how it came out, but I was always frustrated because being so competent my father couldn't understand how what worked for him didn't ever end up working for me. I remember thinking smugly at the time, that good at last I've finally gotten through to him. Now I'd give anything to take it back.

Such is life however. We make our beds and then we lie down in them. The greatest punishment we bear is to simply live with what we have done. We make our choices and then we have to live with them. So I have borne every coldness and every rebuke silently since my father's funeral, thinking of each time he himself swallowed the insult that I this sharper than a serpent's tooth child had given him. It is the least I can do. There are other things he has asked of me over the years in the event of his passing, and however ridiculous now after his passing I have followed them to the letter as intelligently as I can manage. I always had responded flippantly to them, saying "Sure Dad." They have taken on new importance now. Having failed him in life, I can hardly fail him in his death.

A great debt to the rest of my family I owe also, who while not as hurt as my father was by my turning away from him were hurt as well in more ways than I can say. It is time to drop the masks and facades, and to stand up and be counted. Whether they approve of what I have done and what I intend to do, is irrelevant. They deserve to know the real me, and have of me my best that before I have always reserved solely for my own personal vision of striving. It is not complete yet, but soon I think it will start to become apparent.

Once my father asked me that if I ever achieved anything great, that just to thank him in it and that would be enough. I bitterly regret now how contemptuously I disregarded any need to try to make my father proud of me. Whatever I shall do good or ill, he will never know of it. Now that I finally move out from the shadows ever so slowly to prove my worth, I will never have the chance to gain his forgiveness or make him proud. That is my punishment. This is my Sunday confession.

No Child Left unBothered - an Update

The White House continues to stand by its increasingly controversial policy act called "No Child Left Behind" (NCLB). However NCLB is accruing critics from across the political spectrum, as Republican politicians are beseiged by educators complaining that NCLB sets unrealistic standards and interferes with local schools (LAT).

WASHINGTON — President Bush's much-heralded education reform plan, his first domestic policy accomplishment and one of his most important, is in danger of becoming as much a liability as an asset in his reelection campaign, observers from both political parties say.

The 2002 law, known as the No Child Left Behind Act, has come under fire from school officials around the country as they labor to comply with its tough requirements and find the federal government is providing less money than the law promised.

"This is a big, big problem," said one House Republican, who spoke privately about being inundated with complaints from educators in his district. "The goals and requirements are just not attainable. It is going to hurt the president politically among school people, people who are elected to school boards, community leaders."

Read more about it at Oldman's posting "No Child Left Behind?".

More Iraqi turmoil, killings intimidate or silence free voices

The new face of imminent Iraqi democracy is looking a little rough around the edges. That's putting it mildly since a series of killings targeting academics speaking out on issues has intimidated intellectual freedom of speech in the new Iraq. The LAT reports that academics admit that the campaign of intimidation has been successful.

Mayah, whose friends said he was 54, was a longtime pro-democracy activist who had been jailed by Hussein after calling for elections in 1996. He had received anonymous death threats for several weeks, friends and family said, and began traveling with a bodyguard.

As he drove to work Monday, his Mitsubishi sedan was stopped by unidentified men. Mayah, the bodyguard and a colleague were ordered out of the vehicle. The gunmen opened fire only on Mayah, and he died at the scene. One local media report said he was shot 32 times...

The killings of the three other Mustansiriya professors came amid anonymous notes left on campus warning members of the outlawed Baath Party that they faced execution. In the northern city of Mosul this month, the dean of a local university's political science department was slain, an attack seen as the work of Baathists against someone they viewed as a collaborator in the U.S.-led occupation.

Other killings have taken place, this time almost openly committed by Shiites taking revenge into their own hands by eliminating previous Baathist officials. While no one is likely to weep a tear for the officers of Saddam Hussein, the precedent it sets and the fact that US military officials turned a blind eye to it are establishing a precedent of politics by murder and intimidation. Political racketeering is no more desirable than organized crime and can be a mite bit more destructive to civil society. It is hard to see how fair and free elections can be conducted in this environment.

UPDATE: The CIA is not as upbeat as Bush is about the prospects for a Peaceful Iraq.

WASHINGTON - CIA officers in Iraq are warning that the country may be on a path to civil war, current and former U.S. officials said Wednesday, starkly contradicting the upbeat assessment that President Bush gave in his State of the Union address.

To be fair, the CIA got the WMD issue in Iraq wrong but since then they have been right about several issues such as the turmoil that would result from dissolving the Iraq National Army and trying to build a new one "from scratch". The CIA's cultural and political analysis sections are apparently much better than their weapons intelligence division. Not exactly comforting as we face the prospect of having to guess how advanced North Korea's state of nuclear proliferation is, but cogent enough to ring warning bells regarding Iraq political disintegration.

The Natives Are Restless: continued political disintegration of Iraq

The Kurds complain about US rule as reported by the Independent (UK).

21 January 2004

Iraqi Kurds, the one Iraqi community that has broadly supported the American occupation, are expressing growing anger at the failure of the United States and its allies to give them full control of their own affairs and allow the Kurds to expel Arabs placed in Kurdistan by Saddam Hussein.

Massoud Barzani, the leader of the Kurdistan Democratic Party, told The Independent in an interview that the Kurds had been offered less autonomy "than we had agreed in 1974 with the regime of Saddam Hussein".

This shocking turn of events can only be compounded by the imminent collapse of US resistance to direct election demands by southern Shiites. This is in part due to large protest marches in southern Iraq by the Shiite community. While it has been widely reported that some 30,000 protestors marched in Basra to complain about economic conditions, it hasn't been widely reported that other cities in southern Iraq have also seen economic protest marches. The final straw seems to have been the march by an estimated 100,000 Iraqis in support of their highest spiritual authority Ayatollah Ali Sistani. Jack Straw the foreign minister in Tony Blair's cabinet has already reportedly advised Washington to accede to Shiite demands rather than risk a stall of the political process [Guardian(UK)].

However if the Shiites soon take power, they are unlikely to be willing to honor any promises that Americans may have made to the Kurds. The greatest risk of the situation has always been not a pro-Saddam or pro-Baathist resistance movement, but a true general uprising motivated by the political tensions between the different ethnic and religious groups. As the case now seems to be occurring, the whole of Iraq is being pulled into highly polarized pieces whose only real factor in common is their increasing disenchantment with American occupation.

This is in stark contrast to the upbeat tone of President Bush's State of the Union speech text delivered tonight (MSNBC). In it, he claims that:

"The work of building a new Iraq is hard, and it is right. And America has always been willing to do what it takes for what is right... Today our coalition is working with the Iraqi Governing Council to draft a basic law, with a bill of rights. We are working with Iraqis and the United Nations to prepare for a transition to full Iraqi sovereignty by the end of June."

The true danger is that the Iraqi's lose patience with the process we've imposed and rise up against it. This problem can only be solved by hurrying out the door and not letting it hit us on the way out. However any imminent US withdrawal or even turn-over of the political reins might incite fractious sectarian violence and even outright civil war. Right now because of their mistakes, the Administration is between a rock and a hard place. Their only real hope is that it either doesn't go to hell in a hand basket quickly, or that Americans don't really care about that come November.

The actions of the Bush Administration so strain all credibility, that unfortunately that they lead to cynical denunciations of American motives. However as the old saying goes, never look to malice what stupidity alone can suffice as an explanation. Here the CSM reports an outraged critic of the Administration in his frustration resorting to accusations of US interference in Iraqi democracy. It is fairly clear that the handpicked Iraqi governing council has no legitimacy or support within the country of Iraq. It is also clear that the Administration would prefer a compliant puppet government over a robust if anti-American democracy. This is however the game that Americans have been gotten into by the Bush Administration, and that critics warned against. If some have in their outrage called France or Germany obstructionist or even outright enemies of the United States, then since they are democracies it is somewhat naive to underestimate the possibility of anti-American democracies even if we should be the ones promoting the democracy.

Speaking from Ajman, a coastal city in northeastern United Arab Emirates, former Iraqi UN envoy Mohammed Al Douri accuses the United States of sowing chaos in Iraq so that it could delay or prevent altogether the direct elections of a new government. A vote by the Iraqi people would probably lead to electing leaders "against the American presence in Iraq," he told The Associated Press, and such elections would threaten the US stronghold of oil wealth and strategic location.

Meanwhile, the chief of the Army Reserves admits serious errors in call-up errors and an increasingly likely future problem with personnel retentions according to the NYT.

WASHINGTON, Jan. 20 — The chief of the Army Reserve said on Tuesday that a series of mistakes in mobilizing and managing reserves for the war in Iraq had put the Army on the brink of serious problems in retaining those soldiers.

Red Flag on North Korea

According to the wires, as reported by the CSM U.S. troops with the cooperation of South Korea are going to relocate south of Seoul. This is being touted as a diplomatic breakthrough and a concession to Seoul residents who have long complained about the U.S. housing taking up valuable residential real estate.

Under a historic plan to end the US presence in the capital dating from the 1950-53 Korean War, about 7,000 US forces and their families will be moved to an expanded facility about 45 miles south of Seoul. The move is to be completed by 2006.

and:

Residents have long complained that the base occupies prime real estate and contributes to the city's chronic traffic congestion. Younger generations also see the foreign military presence in their capital as a slight to national pride.

However as the article notes:

Taking US forces out of the capital also removes them from the front lines of a potential North Korean attack.

The problem with this is that this move could be preparations for military conflict on the Korean Peninsula. The reason why is that in the event of a conflict, Seoul would be bombarded with artillery and be rushed by the North Korean massive infantry forces because it is so close to the demilitarized zone dividing Korea. As Stanley Kurtz notes in his excellent analysis of options on the Korean-situation:

"Yet war with North Korea would be a horror. True, the United States and South Korea would ultimately win... But in the initial stages, the North would probably kill hundreds of thousands of South Koreans. They would quickly destroy Seoul with a massive artillery barrage from hardened bunkers, and would at first overrun much of the Korean and American army with a massive land attack."

Families are of course the hardest to evacuate in case of an emergency. Soldiers on active duty could always be moved rear of the forward engagement zone of an artillery barrage by an emergency deployment order. Spouses and little kids who may be about town attending school or shopping could never be evacuated in time except with days of advance warning. Even a night-time emergency evacuation order would be a chaotic mess with some families possibly left behind as commanders moved to save as many as they could. An essential step to planning for a Korean conflict would be moving the family residencies out of the danger zone well beforehand. Forty five miles south of Seoul is about an hour's drive, and enough of a buffer zone to make evacuation less than a nightmare while remaining close enough for necessary commutes to the capitol city by any serving soldiers stationed in Korea.

It would be possible to argue that reading too much into a single relocation is alarmist, but consider that Bush Administration insiders David Frum and Richard Perle have recently sent a book to the White House advocating exactly such redeployment steps as precursors for an armed confrontation with North Korea. As reported by Stars and Stripes, the article quotes them saying:

“We fear that it is unlikely that North Korea will accept such terms. If those fears are correct, then the United States must ready itself for the hard possibility that our choices really shrink to two: tolerate North Korea’s attempt to go nuclear — or take decisive action to stop it,”

This article in Asia Times Online contains actual quotes from their book and includes this ominous note:

"Decisive action would begin with a comprehensive air and naval blockade of North Korea ... Next, we must accelerate the redeployment of our ground troops on the Korean Peninsula so they are beyond the range of North Korean artillery and short-range rockets."

Of course, military commanders would prefer to put the redeployment of hard to move units like family residences well before hand, and reserve full pullback from the front-lines as a last-minute response to imminent hostilities. North Korea has already stated that it would treat sanctions or a naval blockade as an act of war. Any imminent blockade attempt would have to be treated by the American military command as a provocative step that might generate immediate military retaliation.

This otherwise innocent seeming step of moving families back from the frontlines, while not ruling out the possibility of peace with North Korea, is certainly far more ominous sign that is being popularly reported.

Read more about the oldman's views in his posting 'Damned if you do and damned if you don't, North Korea'.

UPDATE: Time Magazine argues that North Korea will never renounce nuclear weapons. Time also explores issues of Pakistani nuclear proliferation. Read more about it at the Weekly Standard's article on the nuclear technology smuggling by Pakistan.

UPDATE 2: Op-ed on North Korea in the NYT indicates that the United States is running out of time.

WASHINGTON — "Time is not on the American side," Kim Gye Gwan, vice foreign minister of North Korea, told me a few weeks ago. "As time passes, our nuclear deterrent continues to grow in quantity and quality." Those words are an indictment of United States intelligence as well as a potential epitaph on the Bush administration's failed policy in North Korea.

Modern slavery, the faces of despair

In a moving testimonial, Kristof of the NYT performs an act that is almost heroic in its stature as he frees young slaves. However brave and moving his saving of these girls was, and it is a far better act than many people will go throughout their entire lives doing, it cannot solve the problem. Indeed, if we all collected together funds and put together a program to buy overseas sex-slaves their freedom it would only worsen the overall problem.

Q: How could buying the freedom of individual slaves actually worsen the problem?

For one thing, there's the eternal market laws of basic economic theory: supply and demand. As purchasing these girls will increase demand, it may actually stimulate "entrepreneurs" in order to go out and coerce more girls into slavery to supply the liberation movement. Also there has been no political will in order to free even a handful of these girls, much less large numbers. Kristof's act will remain an isolated bright and inspirational human act that has utterly no power to change the underlying situation that has created these problems. I've heard of other travelers or journalists when faced with this problem, cannot but help trying to save a few from a fatal end. Despite this, the problem has dragged on for years.

Q: If there's nothing we can do, then why should we worry about it?

There is something that can be done. Just nothing at the individual level. Kristof's greater motive in freeing these girls may be to bring their plight to the light of the (fickle) conscience of the developed world. These whorehouses and pimps can only operate with active police complicity. The police in turn can only act with at least a political culture that doesn't question their actions so long as they are sufficiently "discrete". The solution isn't necessarily to directly pressure the politicians on the issue of sex-slavery directly. It is to pressure the politicians in order to take steps that would modernize the country, which would gradually remove the conditions that produce such unconscionable practices.

So long as there is crushing poverty, people will always be tempted to sell young girls for money.

Q: Will development truly stamp out the problems of sex-slavery?

Unfortunately, no. Japan is a highly developed and prosperous country that is being investigated for sex-trade violations by the International Labor Organization (ILO). Organized crime and forced prostitution are linked. It is a hard thing to suggest that prostitution be legalized (as in Europe) but regulating sex-trade may result in better lives for those who voluntarily participate rather than involuntary slavery.

However, even Europe has its sex-trade problems. CNN reports that the same phenomena unfortunately occurs in Great Britain, with foreign girls coerced into prostitution by organized crime in England. It is ironic that one of the reasons that the Serbians were rightfully reviled for rape camps, now that SE Europe is "liberated" organization crime is moving in to establish "white slavery" drawing from women from SE Europe.

There are no up-to-date statistics for the size of the problem. But the Geneva-based International organization for Migration has estimated that 120,000 women and children were trafficked into the European Union each year, most of them through the Balkans.

In a grim assessment at the end of a year in which the OSCE pledged to do more to combat trafficking, the report said there had been no substantial increase in the prosecution of traffickers in southeastern Europe.

Q: Given that development alone cannot stop sexual slavery, do you suggest legalizing prostitution?

I am reluctant unlike some reform proponents to over-simplify the problem of forced prostitution. Even if prostitution were legalized, there is no reason to conclude that an underground black market would not exist. Criminals could continue to kidnap women from poor disadvantaged countries in order to provide a supply of "cheap" and "dispensable" forced labor pool that would give its proceeds directly to organized crime. The existence of hygienic legalized prostitution might decrease the demand for forced prostitution, but because it would almost certainly be more expensive there is no reason to conclude that full regulation would remove the problem.

Legalizing and regulating sex-trade workers could only be a single (highly controversial) step in solving the problem. Another solution could be strengthening illicit smuggling barriers between countries. However borders are porous and it is impossible to scrutinize every passenger deeply without creating huge delays, while many of the girls are fooled into coming "willingly" on false pretenses. Some border enforcement improvements would probably help though, such as training to spot such travelers and a network identifying known traffickers. Education could play a part, by establishing programmes informing young women and families in poor countries about the tricks that slavers use and how to report anyone who approaches them on suspicious grounds.

As Kristof discovered however, some of these women are actually sold into slavery by unscrupulous relatives. Clearly programmes targeting for intervention vulnerable households might be necessary, but also be Sisyphusian as a task. Target every poor household in a developing nation with a young pubescent woman for intervention? Only a small handful could be saved by such intervention methods. Another tack would be to encourage gradual adoption of women's rights, and to better the economic independence of women by pushing for laws that let them have their own bank accounts, credit cards, etc. For poorer women, proven programmes such as micro-lending which lends women small amounts of money to start (profitable) home businesses also would prevent women from being as vulnerable to this sort of predation. If their relatives saw them as a potential income stream to the family, they would have more incentive not to sell them into slavery.

Finally while economic development is not sufficient, it's clearly necessary to solve the problem. While developed nations do have forced sex-trade, most often it's filled with vulnerable women recruited from poorer nations with porous borders. A strong trafficking enforcement, family education, and development aid programme combination stands the best chance of success.

This is important. It's important because whenever we tell ourselves that the present economic and social order is "okay" and that it does more good than harm, we need to remember these faces of despair. It is not just one, or a few, but thousands upon thousands of lives doomed to this dark fate. It is a sign that there is something wrong with the system. If we don't fix it, the sickness that torments these young lives might spread in contagion to the rest of society and eventually bring about our own downfall. That this should be happening is a sign that something is dreadfully wrong.

Q: How bad is it?

It is a problem as serious in our time and as widely ignored as the slavery of African Americans was in a prior time. Many of the girls end up dead by HIV-AIDS which in turn spreads the sickness even more. This is pretty serious and should be considered a high priority for all civilized peoples.

18:9 The kings of the earth, who committed sexual immorality and lived wantonly with her, will weep and wail over her, when they look at the smoke of her burning,

18:10 standing far away for the fear of her torment, saying, 'Woe, woe, the great city, Babylon, the strong city! For your judgment has come in one hour.'

18:11 The merchants of the earth weep and mourn over her, for no one buys their wares any more:

18:12 merchandise of gold, silver, precious stones, pearls, fine linen, purple, silk, scarlet, all expensive wood, every vessel of ivory, every vessel made of most precious wood, and of brass, and iron, and marble;

18:13 and cinnamon, incense, perfume, frankincense, wine, olive oil, fine flour, wheat, sheep, horses, chariots, and the bodies and souls of people.

From the Book of Revelations, by John.

UPDATE: The New York Times Magazine has a story on imported sex-slaves and child-prostitutes in America. Read about it here.

Shiites throwing their weight around,

As reported by the LAT:

Bremer Denies Rift With Iraqi Cleric
BAGHDAD — The U.S. civilian administrator in Iraq, L. Paul Bremer III, repeating the Bush administration's intention to keep its deadline for transferring power to the Iraqis, brushed back reports today that he openly disagrees with a key Iraqi cleric.

The LAT reports that Shiites are continuing to pressure the United States about direct elections. The Bush Administration seems understandably reluctant to provoke a face-down with the highest spiritual authority venerated by the Shiites in Iraq.

"We are neither so stupid nor so reckless as to want to make an enemy of Ali Sistani," a senior U.S. official said.

However, if the Administration caves to Shiite demands for direct elections it could have serious consequences for U.S. credibility in the region.

Officials fear that any sign that they would be prepared to abandon that agreement, which was signed by the Governing Council, would sow mistrust of the United States' willingness to keep its word among the Iraqis who have agreed to the plan.

A reversal also could invite new demands from other ethnic groups.

Clearly at this point, the Shiites are "testing the limits" of their burgeoning and imminent dominance of Iraq's political dynamics. By making demands on issues like elections or rolling back women's rights, the Shiites are attempting to see if Washington will back down rather than provoke a confrontation with them. The United States is in a precarious situation because it already faces stiff resistance from a domestic insurgency by the Sunni minority in central Iraq. The prospect of a military clash with Shiites clashing with U.S. troops would leave the United States isolated in Iraq with about 4/5ths of the country rising up to take arms against them. On the other hand, giving in to the demands might provoke a bloody civil war as the Kurds and Sunni's feel disenfranchised by Shiite dominance and take up arms. At one extreme the U.S. uses overwhelming force to crush dissidents and impose an illegitimate government, and at the other it withdraws and leaves the governance of Iraq to fractious ethnic violence. Unless the Administration can broker an acceptable compromise that ensures ethnic and regional stability in Iraq, this situation could rapidly devolve into a true military "quagmire".

UPDATE: U.S. offers partial compromise but insists on the previously established transition schedule.

Administration officials insist that they will hold to the July 1 deadline, but they are exploring ways to strike a compromise with al-Sistani and his supporters.

The Shiites seem in no mood to back down however:

... an associate of al-Sistani’s, Abdel Hakim al-Safi, wrote a letter to Bush and British Prime Minister Tony Blair, accusing the coalition of seeking to deny Iraqis their legitimate aspirations.

“We know that all the excuses you used to hinder the elections are not based on reality,” the letter said.

The Shiites show their hand, and it sure ain't pretty.

Some defenders of Bush Administration policy have talked up the fact that the Shiites of southern Iraq may not want a theocracy afterall, and that maybe they won't abuse their majority status in a democracy in order to suppress the rights of others. Interestingly enough, they're not even formally in power yet but they've already started by taking away the rights of Iraqi women. The move apparently was sponsored by Conservative Shiites on the Iraqi National Council (INC) that American administrator Paul Bremer appointed and hand-picked.

From now on the women of Iraq, according to the INC which America put in power, will be subject to the medieval laws of Sharia or fundamentalist Islamic law. Previously, Iraqi women have enjoyed modern rights very similar to American women. If this is what the Shiites are doing now, and they haven't even taken over yet well no wonder why the Kurds are so skittish about being underneath the central government thumb and the Sunni's with their own history of oppressing the Shiites are so terrified of payback for all the generations of downtrodden Shiite marginalization.

And we're supposed to turn power over to these guys in less than six months?!?! Even the Administration sees now that things just aren't going according to plan in Iraq!

Read more about the problems in Iraq in my 'Democratization is more attractive in abstract', 'Mesopotamian blues', Iraqi strategy update, and What if the Middle-east is like South of the border? postings.

No Child Left Behind?

The Federal government has been engaged in an ambitious program in order to Federally mandate the testing of schools. In schools that fail to meet standards, the students are given a voucher which their parents can use to send them to another school - including private or charter schools. Despite that this program affects virtually every school system in the country, most parents and the public don't know about how NCLB works at all.

Here is the formal Dept. of Education NCLB summary. However, as one might expect from a government bureaucracy they skim over the critical details. The act has proven quite controversial, with some like Rod Paige of the Concord Monitor Online writing in support of NCLB claiming that it provides additional funding and requires local school systems to improve in exchange for Federal money. On the other hand, the NEA has filed a lawsuit against NCLB claiming that NCLB is an unfunded Federal mandate.

Some have accused the NEA of being an obstructionist Labor union that opposes genuine reform in school systems. However, local school systems like Franklin, NH are also fighting NCLB as an unfunded Federal mandate. Specifically the article notes:

Most education officials — including Franklin’s Title I reading specialist Michelle Kreamer — say that it will cost school districts more money to implement than they receive from the federal government. US Senator Judd Gregg, R-NH, maintains that the money which comes with the law, along with the greater flexibility that the law provides for money that previously came to local school districts, will cover the implementation costs.

Kreamer told the school board that No Child Left Behind already has cost Franklin money because of its reauthorization of the so-called McKinney-Vento Act. According to Kreamer, among other provisions, the law now defines homelessness as including students who stay with relatives. It forces school districts to pay expenses such as food, transportation, school supplies, clothing, and medical expenses for “homeless” students.

If it was one school system then this might be an abberation, but in fact other schools systems in New Hampshire voted to oppose NCLB:

PLAISTOW -- School officials last night voted to join other school districts across the state in taking a stand against the federal government's imposition of new educational laws without providing enough federal money to implement them.

However, some people still hotly argue that NCLB is a fair and fully funded program. However, most of these people who argue for that are bureaucrats or politicians at the Federal level. At the local level, places like Vermont candidly acknowledge that NCLB contains "hidden" implementation costs and increases Federal control of local-state school systems. Once you get away from Washington or pundits in the pockets of idealogues, it becomes abundantly clear that NCLB is a seriously intrusive and expensive Federal mandate.

Educators of every stripe at all levels, beyond the much pilloried NEA crowd, strongly oppose this act on those grounds. Furthermore, polls conducted by the Phi Delta Kappan Proffessional Journal of Education indicate that most people do not know much about NCLB and that they generally oppose strongly the key parts of the measure.

Specifically the following findings by a PDK/Gallup poll are notable:

A total of 83% of respondents believe decisions regarding what is taught in the public schools should be made at the state level (22%) or by the local school board (61%). NCLB involves major federal intervention. (See Table 7.)

The public strongly opposes excessive Federal intervention into state-local school systems. Also:

Eighty-four percent believe the job a school is doing should be measured on the basis of improvement shown by students. NCLB requires that a specified percentage of students -- in the school as a whole and in each subgroup -- must pass a state test, and improvement is not a factor. (See Table 8.)

The public realizes that it is unfair to expect poor school districts to compete with affluent ones. The only fair way to compare progress is by improvement compared to past performance. A rich school district that has athletics, drama, Advanced Placement courses, well-adjusted kids from well-off families, foreign language, and can afford to hire better teachers (such as with Master's degrees) cannot be compared to a poor school district that can barely keep the roof from leaking.

Furthermore the public does not believe that NCLB uses the right testing method for evaluating schools:

Sixty-six percent believe a single test cannot provide a fair picture of whether a school is in need of improvement. NCLB bases this judgment on a state test administered annually in grades 3 through 8. (See Table 9.)

Is there any support for the President's NCLB program? Well interestingly enough, most parents seem to be willing to consider private schools and use a voucher system, where they are available.

Given a full-tuition voucher, 62% of respondents would choose a private school for their child, while 35% would choose a public school. The choices change if the value of the voucher drops to half the cost of tuition, with 47% choosing a public school. (See Tables 33 and 34.)

SUMMARY:

The NCLB act is pretty clearly a program that is an unfunded mandate and excessively interferes with local-state school systems. While defenders of the act point to funding that was included in the legislative measure, on the ground local school systems find that it is costing more to implement NCLB than it provides money for. In addition, supporters of NCLB tout that it gives more freedom for school systems to spend some type of Federal funds. However, this is far outweighed by the Federal government testing school systems and then mandating that they achieve unrealistic and unfair standards that the public does not support in order to get their share of Federal money.

As a conservative, I must oppose NCLB on the grounds that two classic conservative principles of:
1. Conservatives believe in localism. Conservative ideals hold that central government bureaucracies are inefficient and overly intrusive. Control of money should remain at the local levels where it can be spent the most wisely.

This theory was in fact first publicly articulated by President Richard Nixon (R) who proposed the creation of block grants. These grants have been used successfully to give control of social services back to state and local government in Welfare reform, road-construction, and many other aspects of society. Conservatives and Republicans strongly support this.

2. Conservatives oppose unfunded mandates. Federal mandates that require state or local governments to spend money to comply with new regulations are really another form of taxes. Because there is "no such thing as a free lunch". Someone always pays - usually the taxpayer!

In fact, it is no longer merely a principle. As the Heiritage Foundation has noted, Congress passed a law making unfunded mandates illegal. However as the article notes:

Few Americans have any idea that Washington forces all sorts of laws and regulations on state and local governments -- concerning everything from storm-water drainage to health care for illegal immigrants -- without giving states and localities so much as a penny to pay for them.

Unfortunately, NCLB despite the protests of its supporters is clearly an unfunded mandate. It should never have been passed, because it is illegal to try to make local school systems pay out of pocket to meet Washington testing rules. However, this hasn't stopped President GW Bush from supporting NCLB even though it may be underfunded by as much as several billion dollars.

In light of all this information, no conscientious Republican or conservative could support NCLB even though many like I encourage charter schools and a reasonable voucher system. Unlike Democrats, I do not fear the dismantling of the public education system. But as a matter of social justice and respect for the dictates of the Bible, it would unconscienceable in order to let school children have no place to go. The great danger is that if the public school system fails, some poor counties or school districts will only have ramshackle buildings with poorly trained teachers in order to instruct them. This is clearly against the American ideals of an egalitarian society and equal opportunity. So before we let the whole school system go private, we must set up a system so that it will ensure that local kids will always have a school in order use their vouchers at. Without a choice in schools within a reasonable travel distance, vouchers are just so much worthless paper.

So as people who care about the future of our country and want little kids in order to have the education they need to become healthy and happy citizens, please oppose NCLB and please do so most especially if you are a conservative!

"18:5 Whoever receives one such little child in my name receives me,

18:6 but whoever causes one of these little ones who believe in me to stumble, it would be better for him that a huge millstone should be hung around his neck, and that he should be sunk in the depths of the sea."

From the Book of Matthew

NOTE: I no longer regularly attend Church, but I still read the Bible quite a bit and believe in the values taught to me.

PS: Thanks to Beth for cluing me in on the Phi Delta Kappan source. You know who you are! We'll get together soon.

Are we exporting America? Laize Faire capitalism comes back in style

That any single job disappears isn't cause for concern. The oft cited example is buggy-whips. Times change. Once horses went out of fashion as a transportation means, the accessories of horse-drawn travel vanished from the popular landscape. However, this should be treated with caution. New jobs must be created to take the place of old ones. Furthermore, most people would not be satisfied with new jobs that pay less or offer less benefits or are less fulfilling than their old jobs. That wouldn't be considered forward progress.

In a thoughtful op-ed, Robert Samuelson in the WaPo argues that job-loss fears are over-blown. However he notes a possible problem, writing that:

Is America's economic vitality still suffering from the technology and stock "bubbles''? If companies won't expand -- if they're glum about the future -- then lackluster job growth will choke the recovery. And what about the trading system? In Asia, some countries hoard export earnings. They accumulate huge reserves of "hard" currencies (mainly dollars) rather than spend for imports. If too many countries do this, the trading system promotes stagnation and merely shifts jobs from one country to another. In a weak job market, outsourcing -- a small threat by itself -- could become a large lightning rod for anti-globalization discontent. [Emphasis added]

Writing on inflation in the Weekly Standard, Irwin Steltzer notes that in an otherwise optimistic picture we have the following condition:

THE DOLLAR IS DOWN. Oil is up. America is running huge trade and budget deficits. The Japanese are intervening massively in the currency markets to prevent the yen from rising, and the Chinese show no signs of abandoning the renminbi's peg to the dollar. So the euro is bearing the brunt of the dollar's decline, making euroland goods less competitive and snuffing out any signs of a European recovery.

Daniel Drezner, a free-trade and market liberalization proponent who teaches political science at the University of Chicago, makes an argument that there is no difference between buying goods here and goods made elsewhere except that it's more efficient to buy them from the low-cost producer. Most notably he quotes from Noam Scheiber at the TNR who argues that:

Put differently, you can either trade machines and workers (which is basically what you're doing when you're outsourcing), or you can trade the goods these machines and workers make. But, as a theoretical proposition, the two scenarios are EXACTLY THE SAME: They both maximize productive efficiency. Indeed, one of the great accomplishments of international trade theory, post David Ricardo, was to prove mathematically that trade in goods accomplishes the exact same thing, efficiency-wise, as trade in machines and workers.

But the problem is that trading machines and workers is NOT the same as trading goods. The difference is not theoretically equivalent. The key issue is production infrastructure. Here that means machines, companies that produce goods, and workers skilled in making them. Suppose there was one country that was the low-cost producer. In the theoretical case, all production would shift to that country. That country would then have all the production infrastructure, because there would be no need for any of the other countries to have any.

As one can see, either trading goods or trading production is not equivalent theoretically at all. Well what's the problem with this? Suppose that something real enters into the airy world of economics, like a war. Countries still go to war with each other you know, even with international treaties and the U.N. around. Suppose the country that you went to war with, was the country that produced all your stuff? Well that would be a big problem wouldn't it?

In WWII, car factories were converted into making tanks. Bids were put out for a new transport vehicle, giving us the creation of the jeep/humvee. Companies that made airplanes, were tasked with creating new planes to fight over the skies of Europe and the waves of the Pacific. It was the great production capacity that helped Winston Churchill sleep soundly at night when he heard that the US had entered the war finally.

Is this a reasonable concern anymore? It should be remembered that China took hostage a US spy plane in 2001. Furthermore, sentiment on the street in China stoked by proganda was strongly nationalist and advocated strong "measures" against "US aggression". The US manufactoring base has contracted 16% in the last three years, with many lost jobs going to China. In addition, the US has long standing international tensions with China over Taiwan and the Korean Peninsula. Recently, China has stated that it will "pay any price" to ensure Taiwanese reunification with the Mainland, something the US is committed to opposing if it happens by force.

Remember, that it isn't just a matter of getting new machines or converting old ones to make products. Without a need for them, people stop training to make those goods. Afterall, their jobs are going to be Walmart greeters or retail store clerks or short-order cooks. Why should they invest the time and effort to become engineers, mechanics, or learning how to use dangerous industrial machinery when they won't be able to get jobs using such skills? When was the last time you met anyone that knew how to make a buggy whip?

If this was a perfect world, then the economists would be right. It would be okay to ship our computer and telecom service jobs to India, and it would be fine to ship our factory jobs and equipment to China. However this is not a perfect world, it is filled with governments that disagree with each other and occasionally go to war.

Besides, free trade only works if it is truly free. The problem is that all countries have protectionist policies that prevent truly free trade. The only cases where free trade has actually happened historically have been small-scale experiments, local small-scale markets, and the theoretical models of the free-trade proponent economists.

As this article on Free-trade history in Foreign Policy in Focus (FPiF) shows, nations have never been all that eager to open up their markets. To this day, massive agricultural subsidies in corn, cotton, and sugar are given lots of funding by the US government. Cheap chicken is flooding the markets of Ghana from Europe according to NPR. Do you fly on planes often? After 911, airlines received a massive bail-out. Without that bail-out many companies would have folded, and with less competition ticket prices would have shot up. Do you use long-distance calling? In the 80's and 90's, the Federal government sold off cell-phone radio-wave bandwidth licenses very cheaply. The consequence was that cell-phone companies were able to offer long-distance virtually for free, cause they'd gotten the frequencies practically for free. It was this that drove long-distance calling prices into the ground, and not regulatory anti-trust breakup of Ma Bell into the Baby Bells. Yes, competition helped there somewhat but it was really government subsidy that dropped the price almost to nothing. As for the telecom companies themselves, they did invest allot of money laying fiber-optic lines but they were responding to a demand created by the Internet - a creation of the DOD and government scientists starting in the 70's and meant to hook up university research (as well as provide Doom's-day contigency communication lines).

So from everything we do, whether type on a computer or ship packages (Railroads and the Post Office were government funded projects), to call long distance (space satellites, Internet, and cell-phones all subsidized by government), to buy a cotton T-shirt, to bake a cake (sugar industry protection), to fly (Boeing and American plane manufacturers are subsidized by pork-ridden Military procurement; the Wright brothers' first customer was the US military), to make a sandwhich (the grain in the bread is subsidized), to pay your electric/gas bill or driving down the street (we intervene militarily overseas to ensure oil stability and access), to turning on the lights (hydro-electric and nuclear power was subsidized and developed by the government) - every facet of our lives is touched directly or indirectly by incredibly distorting government subsidy.

There really is no such thing as a "free-market" or a market without "regulation", and in fact even if it were to exist one finds that it would collapse and be completely unworkable even in theory. Why? Because without the regulation of law&order, people will try to cheat each other. The reason the FDA exists is that the Food and Drug Administration is meant to stop people who try to be Snake Oil Salesmen. Caveat Emptor or let the buyer beware has been completely discredited as a viable economic practice. Yet under the guise of "deregulation", "privatization", or "market liberalization" individuals are trying to bring back laize faire capitalism. Yes, too much regulation can be stifling as anyone who has sat through too many meetings knows. However completely removing regulation only leads to anarchy.

However this is the course that we have set for ourselves as a nation by listening to pie-in-the-sky scholars and pundits in the pockets of the unscrupulously greedy.

Btw the "low-cost" producer after WWII, was the USA. Because Europe and Asia were devastated by war, the US became the producer for the world. This was what helped the US become immensely rich and powerful after WWII. So there must be some advantage to being able to make all that stuff, right?

The Stock Market, trading broken dreams

The LAT reports that Tech stock prices may be inflated. Surprise, surprise, surprise. Meanwhile the NYT reports that the SEC (Security and Exchange Commission) that regulates the stock markets has found that most mutual funds are a bunch of dirty crooks who pay kickbacks to brokers in order to funnel business to them.

Federal officials announced a new front in the investigations into the mutual fund industry on Tuesday, saying they had uncovered widespread instances of brokers receiving undisclosed payments for steering investors toward specific funds.

Initial results, indicate that up to 14 out of 15 unnamed funds were found to be engaging in this unethical behavior. Personally, I was all for mutual funds, IRA's, and 401-k's. The epidemic corruption found on Wall Street however by Elliot Spitzer in his crusade against corruption in the most well-known names on Wall Street has revealed a broken system. Talking to Republicans on the street, their response was almost uniformly "Take them (the crooks) away in cuffs! Personal accountability!". This is of course the rational response from Republicans who believe in more enforcement rather than more regulation. However, the Bush Administration is falling down on the job. More and more Americans are shown to have been cheated or swindled by powerful moneyed interests, and the only thing coming from the White House is silence while crooks walk away with sweet-heart deals or mere slaps on the wrist. For stealing golf-clubs in California (under three-strikes) you can go away for 20 to Life, but if you swindle millions upon millions it's a fine and back to the golf course for you! That's their idea of justice!

Initially the idea of creating personal retirement accounts sounded like a great idea to me. However the truth is that the greedy thieves on Wall Street need to be reined in first, or they're just going to steal ordinary everyday Americans blind. A massive conversion of retirement investments from the public system to stock and bond investments would be a perfect opportunity for con-men in suits in order to rip off every penny that the ordinary guy had saved up for his old age. Let's clean up Wall Street before we even think about trusting them with the bankroll!

Good news and bad news in Iraq, update

William Safire of the NYT discusses modest progress regarding Kurdistan autonomy. Kofi Annan will urge the Shiites to hold off on their demands for immediate democratic elections. In addition, the NYT reports that Canada will be allowed to bid on Iraq reconstruction projects. That's the good news. The bad news is that the NYT also reports that an Apache helicopter was downed by enemy fire, though thankfully the pilots were unharmed. In addition, they report that Saddam Hussein warned his followers not to ally with jihadists. The Alqueda-Hussein link asserted by the Administration including Powell's UN presentation is looking weaker and weaker all the time. Meanwhile the CSM reports that large numbers of Americans believe that the war in Iraq is making the world safer.

In a Christian Science Monitor/TIPP poll conducted last week, 62 percent of Americans said US military action in Iraq is helping to make the world a safer place - down slightly from December but more than 10 points higher than in November.

This is despite as previously noted the Army War College has issued a report indicating that military action in Iraq did not hurt Alqueda and was not in the strategic National Security interests of the USA.

What the heck do they know? They're just the Military!

WASHINGTON — A report published by the Army War College criticizes the Bush administration's global war on terrorism as "unfocused" and contends that the war in Iraq is "unnecessary" and a "detour" that has diverted attention and resources from the threat posed by Al Qaeda.

What the heck do they know? They're just the military! If our Commander and Chief wants to launch ill-concieved wars around the globe anytime he wants to, then that's his right. Except of course for the part in the Constitution that says only Congress can declare war. But what the heck did the Founding Fathers know? They're just a bunch of dead white men. And some of them owned slaves. Yeah! So if George W Bush wants to completely ignore that this is a democracy and send soldiers off when our best strategists tell us that it's completely pointless, then he can any time he wants to!

Read more all about it at the LAT.

P.S. That was sarcasm if you couldn't tell. Undoubtedly some yuck will take it seriously, and either agree with me or tell me off for being a mindless Bush supporter. It isn't entirely clear which would be more frightening in a prospective voter.

NOTE: For those who still support the Iraqi war, here is a fascinating report on "the facts on the ground" in Iraq after the Hussein capture by Kenneth Pollack in the current issue of Foreign Affairs Magazine. For the record, Kenneth Pollack advocated the invasion of Iraq in his book The Threatening Storm. Let it not be said that the oldman cherry-picks his information. Pollack's main conclusion is that some good stuff has happened there, but we need to change how we're operating there soon in order to make the transition to democracy successful.

Consumer debt update,

The WaPo reports on consumer debt joining the other news-sources writing articles on the topic. The new twist under consideration?

Robert D. Manning, a leading expert on the credit card industry, sees families as likely to come under even greater stress as interest rates -- currently near historic lows -- inevitably rise.

"That's one of the trends that's really going to kill the American consumer in the next downturn," he says. "It's just impossible to keep these interest rates this low for much longer."

Yes, that's right. Consumer debt has risen throughout the recent recession as families borrow to stay afloat. Now that the economy shows signs of recovering, but with wages flat and people actually giving up looking for work, then we could have a scenario with rising interest rates but zero new disposible income. That's a recipe for bankruptcies that will leave families with nothing.

Mortgage refinancings put cash in the pocketbooks of Americans, but since the debt was rarely paid down this meant stripping the assets of the house. Home buying is still considered the single largest investment most American families will make. When the creditors come baying families will have nothing left and be put out on the streets. Now thanks to our great President and his Republican controlled Congress who have made it harder to declare bankruptcy families may not even have the slim protection of bankruptcy. It's good enough for the big boys like Enron and Worldcom-MCI but not good enough for Mom and Pop. That's what the Republican leaders on the hill have said!

The response of economists working for credit card companies?

Dan Laufenberg, Chief US Economist at American Express Financial Advisors in
Minneapolis;

"But the unemployment rate was equally shocking in the other direction.
Some people will make a big case about how it fell (because 309,000 people
left the labor force), but I would argue that in the unemployment rate it's
less important how you get there and more important where you are, and 5.7%
is pretty good."

So according to them, a low unemployment rate is good even if it's only low because people can't find any work at all and run out of un-employment. Hmmmm ... what's the problem with this picture? Talk about being out of touch!!!

Push comes to shove, Democratization more attractive in abstract

The NYT reporting on the political situation in Iraq notes that the desire of influential Shiite religious leader Ali Sistani for direct popular elections in the next few months conflicts directly with American caucas-style style selection of governing candidates. Negotiations in order to resolve differences have so far failed in order to obtain any compromises. Experts warn that early popular elections could destabilize the situation in Iraq. The article relates:

Ayatollah Sistani is the most respected cleric here among Shiite Muslims, who make up 60 to 70 percent of Iraq's population but have never ruled Iraq in modern times. General elections would favor the Shiites, and experts have warned that ethnic and religious tensions would increase if elections were held quickly. Guarantees of rights for Iraq's other groups, including Sunni Arabs and Kurds, might also be jeopardized.

Supporters of aggressive democratization in the Middle-east, who in the past have criticized status-quo solutions, so far to my knowledge have not responded to this troubling sign in their first large-scale test case for advancing democracy in the region. Proponents such as Daniel Drezner in his Transparent move article on The New Republic and his commentary on his weblog about democratization tend to treat democratization as an immediate and tangible good, while treating the possibility of radical populist take-over as a distant abstract evil.

Dan quite charmingly writes:

The $64,000 question, of course, is what would happen if democratization led to extremist rule. This is undeniably a scary prospect. Still, the case of Iran, whose leadership seems increasingly out of step with its younger, pro-American generations, suggests that radical elements will experience difficulties retaining popular support over the longer run. Likewise, Hugo Chavez's attempts to pursue dogmatically anti-American policies in Venezuela have been met with increasing opposition. Anti-American jihads are of limited utility if they fail to deliver the goods.

The problem with this is that the test case of Iraq shows the exact reverse in the short-run. Cultural traditions and social institutions necessary for democracy are difficult to form quickly, requiring long incubation periods. It is a slow thoughtful journey to a civil society. On the other hand, conflicts of interest and prejudicial tensions are quick to rear their ugly heads in destroying the trust and goodwill necessary for people to work together in common. It is easy to criticize US policies supporting "our sunnuvabitches"; it's not necessarily easy to find a secular tolerant democratic alternative. In the long-run of course, non-democracies may become unpopular but that's the whole point - waiting until the people are ready to take a chance on democracy instead of trying to stuff it down their throats.

What about the democratization down south of our border and the collapse of the iron curtain? These are indeed clear empirical evidence that autocratic and economically devastated societies can transition to democracy. However, they are equal evidence of a long slow road requiring patience with setbacks and a clear acknowledgement that people may be attracted to other systems of governance. The invasion of Panama that removed Noriega was successful precisely because the removal of the dictator followed nearly a century of extensive American commercial and cultural influence via the Panama canal. Likewise the liberation of Mexico was followed by the Mexican-American War (PBS) that occured about 150 years ago. When America did intervene actively south of the border in this century, as in Cuba, Mexico, or Argentina the results both economic and political were often dire to our interests.

The Fall of the Iron Curtain likewise may have seemed to have taken place in a historical blink of the eye. However it took economic pressure, military competition, confrontation in countries as far flung as Africa to Cuba to Berlin, Germany to Afghanistan, and a concerted long dawning realization of the citizens that the West had become economically superior in order to slowly eat away at the foundations of the Communist Empire. Then and only then, after many decades of forceful, persistent, but slow outside pressure did the Soviet Union and its satellites collapse.

Trying to ride in and sell democracy with high-pressure tactics like invasion and cultural shock & awe have never worked. Indeed trying to force governments on foreign peoples as in the case of the second Iranian revolution against the Shah almost always ended in radical anti-American non-democratic regimes. Democracy is not an easy or quick process. The history of Europe's evolution from aristocratic elitist states to modern democracies show this. It should not be forgotten that Adolf Hitler was an elected leader of Germany before Germany had matured into a modern stable democracy.

So while saying "democracy is good!" is a nice bumper sticker, blindly pursuing it can actually result in disasterous reversals unless proper care and patience is taken to gradually coax democracies from developing and modernizing nations.

Update: Remember when we invaded Haiti a few years back? All to restore "democratic rule" to that benighted nation? Then the UN came in and tried to patch things up? To be fair this was a Clinton policy, but it shows the folly of trying to change a culture by crude outside intervention. Democracy has to come from inside, from within. Now we got this situation in Haiti as reported by the Independent in the UK.

The political and constitutional turmoil in Haiti deepened yesterday as the country's parliament ceased to function and President Jean-Bertrand Aristide began in effect to rule by decree while mass protests against him continued.

Update2: Bush speaking on democratization from beside Vincente Fox declares (MSNBC):

... American leaders must support “democratic institutions ... whether in Venezuela, Haiti or Bolivia.”

Does this mean that we're going to send troops to Haiti now? Or is this just (more) empty rhetoric? It's easy to talk big, and harder to follow through on it.

You know things are bad when ... Bush falls back on Clinton

In an effort to assert legitimacy for his policy in Iraq, President GW Bush during a joint briefing with Mexican President Vincente Fox told reporters the following:

“The stated policy of my administration toward Saddam Hussein was very clear,” Bush said. “Like the previous administration, we were for regime change.” [Emphasis added]

The difficulty with this position? The previous administration was the Clinton Administration. Clearly President GW Bush doesn't feel that the justifications articulated during his own tenure are sufficient any longer to convince skeptics without citing the support of the previous Democratic President's administration policies.

Credit where credit is due, the Bush Admin get's something right (but...

Well, we may have climbed back from the brink of a nuclear war between Pakistan and India. The leaders of the two nations have met in what have been reported as warm peace talks by the WaPo. This cannot be interpreted as anything other than a coup for the Bush Administration. Just a few short years ago, both sides were escalating massive troop deployments to their mutual border. The world held its breath as heated rhetoric and terroist attacks pushed the two nations breath-takingly close to nuclear exchange. Millions of people would have died both during and in the aftermath, with the possible genocide of the Pakistani peoples as a result. Now the Indian PM wants to leave a legacy of peace as he steps down from office.

It should be made clear though that this victory is not a result of hard-liner foreign policy, but a triumph for the multi-lateral diplomatic wing of the State Department. It was Richard Armitage who went to the region and knocked heads together in order to get both sides to back from the brink of nuclear war. Furthermore, our alliance with Pakistan is not without its risks. It has come at the cost of turning a blind eye to Pakistan's nuclear proliferation as reported by the Weekly Standard. Yes it was a good step forward, but it's hardly a stirring recommendation for the aggressive policies of premption and "preventive" war. Yet these are still being touted at the highest levels by neo-conservative thinkers as reported by the Daily Telegraph.

That's exactly what this country needs: to alienate Saudi Arabia, put sanctions on France, militarily intervene in Iran and Syria, and start mobilization for a war on the Korean Peninsula. All while tidying up Afghanistan and sitting on Iraq's recovery. Certainly this is what Perle and Frum are suggesting. This brings up the whole irony of "preventive" war. Talk about an oxymoron. How can a war be prevented by starting one? They should call it by what it really is: A first-strike policy. This however runs into the problem that the good guys don't draw first - read here about it in my "What's the difference? Ask a cowboy." post.

Mesopotamian Blues, can't get no satisfaction

This hasn't been a drop of good news in Iraq since Saddam Hussein was captured. Okay, that's an exaggeration. Since then some of our boys who've been away for up to two years serving in Afghanistan and Iraq have started coming home (NYT). In addition, there has been some movement on the frozen assets in Syria (NYT). Most of the news however has been mildly bad to downright troubling. Remember when the Administration's line was that it was just all media bias? They don't seem to be singing that song recently at all. ;-)

Of note, there continue to be blackouts and fuel shortages (NYT). Apparently the culprit is part fuel smuggling and part gaz guzzling luxury cars that have flooded the country (LAT). Talk about too much of a good thing! Besides that, we had another chopper shot down (WaPo). Meanwhile bombs (WaPo), riots in the previously quiet south of Iraq (MSNBC), and violent clashes and shootings in Kirkuk to the north don't paint an exactly rosy picture (NYT). Here Newsweek asks if we can keep things from completely falling apart in an article entitled "Refereeing in Hell". This isn't just a collection of bad anecdotes either. On the political level, Ali Sistani who is just considered the highest religious authority for the Shias who are 60+% of the Iraqi population has completely rejected any compromise with any political transition plan that does not include direct elections. The problem is that the current plans for Iraqi self-governance don't have any! Meanwhile to the north, Kurdish reluctance to cede autonomy creates the prospect of politically splitting Iraq in half (WaPo)!

In light of events like this, the optimism of our leaders as commented upon by Glenn Reynolds based originally on a September article by the CSM seems to be so much more cherry-picking. Never underestimate the ability of synchopants in order to tell you exactly what you want to hear. Yes, attacks in Iraq have gone down to about a dozen a day after a string of American military offenses. However they had risen from a dozen a day to two dozen right before Hussein's capture. The big offensives in other words just reduced the number of attacks back to were they were before the big surge.

Is all the news bad? No, Knight-Ridder reports that some Iraqis resent the loss of Iraqi life created by many insurgency attacks. However this same news source reports that we are running short on ammo for the troops. Apparently we just can't buy off the shelf because of the high army specifications that the ammunition must perform under. Additionally, the old truism that 'good help is hard to find' apparently is holding as far as recruiting Iraqis to either help us or prepare to take over security in the June transfer. That's less than six months away. Actung!

To quote from Yeats' poem the Second Coming:

"...Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all convictions, while the worst
Are full of passionate intensity..."

Update: Not only does the Shiite religious leader oppose American plans that don't include direct democratic elections, but he is being quoted in a publicly placed ad. This definitely escalates the situation. The Shiite religious leadership has gone on record in public with their demand, so backing down is unlikely as it would mean a loss of 'face'.

BAGHDAD, Iraq - In a full-page newspaper advertisement on Monday, Iraq’s top Shiite Muslim cleric reiterated his demand for the country’s next legislature to be elected, hardening his opposition to U.S. plans for regional caucuses.

Damned if you do and damned if you don't, North Korea

Here Kristof has a nice op-ed about the dilemma in Korea. He writes "Granted, all the North Korea options are awful... The upshot is that we've slipped from a troublesome situation to an appalling one." It is looking increasingly likely that war on the Korean peninsula or complete capitulation to North Korean nuclear proliferation is becoming inevitable. Things are looking very bad indeed.

Q: Come now, Oldman! Aren't you making the mistake of the excluded middle here? It's not an either-or proposition.

I wish it were not so, but really viable options are running out. Negotiations have been re-started by the Bush II Admin but despite the multi-lateral nature of the talks, Korean overtures have not been met with substantial half-way proposals by the Bush II Administration. I understand their gripes about the Korean cheating on the Clinton agreements (we fudged too on our end), the problems of verification/inspection (though they did seem to have worked in Iraq), and sympathize with their hopes of a democratic unified Korea. However, they simply aren't willing to really negotiate beyond superficial talks so far.

Sanctions likewise aren't really a viable option. Korea has declared that any form of sanctions would be considered an act of war, precipitating what sanctions supposedly were meant to avoid. To be fair, historically a naval blockade is recognized as an act of war. Certainly Isreal treated it that way in retailiating to a naval blockade by launching an all-out offensive war in the 20th century.

Finally waiting things out may not be an option. While North Korea may not have a long-term viable economy, the problem is that it may take too long for things to fall apart. North Korea is producing by two different methods nuclear weapons today, and has the missile technology to lob them at targets as far off as the West coast of America. Now maybe you don't care if California evaporates, but as for the oldman he has family in Seattle, WA and the West Coast sprouting mushroom clouds isn't my favorite scenario. This is a bad situation and it's not entirely clear if we can get out of it.

So war may be inevitable. Here the true bankruptcy of the GWB Administration's policy in Iraq is clear. The real problem with fighting wars of pre-emption or prevention is that voluntary wars may drain one's resources for involuntary wars. Troops dedicated to one location are pinned down and can't easily be shifted to other locations. Fighting wars on more than one front means splitting logistical supplies - food, water, shelter, medical care, ammunication, satellite coverage, transport, armored vehicles, etc. Basically everything and anything an army needs.

Some historic military offenses were destroyed by over-extending and fighting wars on multiple fronts. Napoleon lost control of all of Europe after his disaster invading Russia when he didn't have to. Later, Hitler would make pretty much the same mistake. Alexander the Great committed himself to too many fronts and lost his troops' support in India when he'd taken them too far from home.

The big problem with fighting wars of "choice" is that wars that you may not be able to avoid may also come home to roost at pretty much the same time. We're juggling Afghanistan which is still not secure, and have pretty much the whole army straining to maintain deployment in Iraq. What would happen if a war on the Korean Peninsula became inevitable? And what if China choose at this moment of vulnerability to invade Taiwan on the assumption that the normally incontestable American military machine was completely over-extended? And at the same time, the clerics in Tehran decided that just the thing to keep themselves from being thrown out of power by the disaffected people of Iran was to support a bloody take-over by the Shias in Iraq?Literally the only way we could face these threats is by a massive mobilization including the dreaded draft. It would also result in a huge shortfall of necessary supplies. Already we can barely keep up or are short of small-arms munitions (e.g. bullets), advanced bullet-proof vests (to stop bullets), vehicle treads, etc.

It could be a bloody disaster, with drafted kids frog-marched to war with hardly any notice or more than a few weeks of basic training going into battle light on ammo, protective gear, and vehicles. It would be the biggest losses we've suffered since WWII. We're talking tens of thousands dead, minimum. We might lose that early on. It'd be more like hundreds of thousands dead in a short period of time - one to two years.

This can't possibly happen? Sadly, that isn't true. The history of warfare has been filled with clusterf*cks that started out with similar seemingly harmless miscalculations by leaders of nations that misread how far the others would go. Get ready for a bumpy ride ...

Update: The WaPo has an article with initial indications of what the "unofficial" inspection team found. Hint: It was glowing. Also it contains commentary about how this visit may be a bargaining tactic to pressure the Bush II Admin into coming up with real concessions at the bargaining table.

Weak job numbers, a surprise

The Labor Department reported that 147,000 less jobs were created than expected in the month of December. What about the possibility that these numbers are wrong? It is true that initial government numbers are often revised. However, the report also downwardly revised previous month's gains by 66,000 jobs. In other words, if the trend holds even this number may be over-optimistic!

What does this mean? That the economy is more shaky and the recovery more tepid than has been previously thought by optimists. It also somewhat vindicates Paul Krugman's criticism that the recovery isn't as solid as widely thought, though I still disagree with many of his basic arguments. Certainly the nay-sayers who were over-joyed at the recovery and weren't afraid to trumpet it as a success for GWB's policies must certainly be taken aback. The "jobless" economy still marches on.

Technically we're actually "losing" jobs because since demographic trends mean that we need to create "X" number of jobs just to keep with new job-seekers. Failing to grow fast enough means that we're falling behind. Another depressing thought for current job seekers!

NOTE: Here's another source from MSNBC that sites the shortfall as being slightly smaller. The past downward revision is reported 51,000 jobs lower and not 66,000 jobs lower as I suggested above according to this alternative source. Here's relavant quotes from the MSNBC article putting it all in perspective:

“It’s a lousy report any way you look at it,” said David Wyss, chief economist at Standard & Poor’s Corp. “Employment has been up five months in a row, but all five months together add up to about one normal month of growth. We’re just not getting any kind of job growth despite the strength we’ve seen in GDP.”

Another economist that MSNBC quotes adds:

“The popular, man-in-the-street, ground-level view of the job market is that it still stinks,” said Bill Cheney, chief economist for John Hancock. “All of us forecasters were getting a bit complacent, and it turns out the man in the street was probably right.”

Traveling and volunteering,

Over the past few days, I've been quite busy. First there was a day of traveling on Thursday after my post on the funny signals coming out from the IMF on the US Fiscal and Currency policies. Then there was Friday on which I met a Dean coordinator. Today I volunteered during a Dean canvassing drive for the upcoming Primaries. It was rather all exhausting.

How dare I try to get out the vote for Dean and call myself a conservative? Well, anyone who could support GWB's new Immigration Policy and still call themselves a conservative is just engaging in wishful thinking. This hasn't been the first time that GWB has gone against deeply held conservative tenets either. From spending discipline, military adventurism, interfering with local control of schools in his No Child Left Behind legislation, to failing to rigorously enforce laws against systematic corporate corruption then those who wish to cling to GWB as a standard bearer only have mostly pandering concessions to cling to rather than real issues.

He is strongly pro-Isreal, openly anti-gay, willing to implicitly appeal to racial prejudices, and publicly religious. His real policy contributions have mainly been in the areas of being pro-business and cutting taxes. The anti-environmental regulation initiatives are an extension of the pro-business orientation. Well as a conservative I am for business growth, less red tape, reasonable environmental regulation, and like anyone else also prefer lower taxes.

However none of these policy issues have addressed deeper base concerns like law&order, being for small businesses and farms as opposed to catering to corporate giants and subsidizing large agri-business, and the fact that environmental policy used to not only be bi-paritisan it was also Republican. Nixon afterall created the currently much loathed EPA. And while big business have special preferences given in consideration to them, the much touted small businesses languish because the government agency that underwrites loans for them is unfunded currently. Even if it get's a continuing resolution that allows it to continue operating, it will be under-funded by about 2 billion dollars in expected demand. Considering that it is a modern conservative tenet that small businesses need help because they create the majority of jobs in this country, this behavior is contradictory at best and hypocritical at worst. Big businesses have enough advantages, it's unfair to also hand them out large subsidies that they then use to put small farmers and businessmen out of operation. That is hardly what it means to be conservative or Republican!!!

UPDATE: David Martin has an op-ed on the subject in the WaPo that talks about the inherent problems of this approach to Immigration issues. The NYT agrees in a review review of Illegal Immigration in America by Dean Murphy. Cited in the article is a quote that summarizes it all:

"I think it is hard to imagine a worse immigration reform proposal right now," said George J. Borjas, a professor of economics and social policy at Harvard who has written extensively about the drawbacks of illegal immigration.

Some good news for the dollar, bad news for trade deficit

Here an op-ed by Ignatius in the WaPo discusses why China and Japan continue to accumulate dollars even as their value drops. It apparently is a by-product of their export-led economic strategy. They export more to the United States than they import from it, meaning they accumulate dollars because each exchange nets them money that is denominated in American currency. This raises an interesting question however. Once having cashed in their goods for Greenbacks why don't they then turn around and exchange them for Euro's? This would safeguard them against a further drop in the value in the currency. The only evident answer is that they must think that the dollar will soon straighten out on its own, something that might not happen if they were to start making available huge quantities of the currency on the FOREX markets. This is a vote of confidence for the future stabilization of the dollar at least in the mid-term.

China and Japan could still flush their dollar accounts and cash them in for Euro's if the long-term financial picture of the United States becomes sufficiently shaky. Despite the contra-indicator of the IMF giving a red flag, and therefore being a good sign for the US economy this is a cause for concern. It is also bad news on the trade deficit front because it means that China and Japan have no intention of slowing down their flood of cheap consumer goods in US markets. Here is a relevant section:

"This counterargument was presented to an IMF forum two months ago by Deutsche Bank economist Peter Garber. If an abstruse economic theory can be said to be generating "buzz," that has happened with Garber's work.

Garber argues that Asia's seemingly irrational accumulation of surplus dollars is the inevitable consequence of its export-led development strategy. To increase domestic employment, the Asians keep their exchange rates artificially low and sell cheap goods to the United States -- in the process accumulating those ever-larger surpluses of dollars."

Another thought occurs to me however on the lines of the IMF being so regularly wrong. Since the IMF is known to be wrong so often and they've come out against the budget deficit policy raising interest rates(at least in the short run which is what they focused on) but seem sanguine about the dollar situation, then maybe I've had it in reverse all along. The budget and interest rate situation is going to be fine, but the dollar is about to plummet to new lows and create a currency crisis similar to the Asian currency collapse in the late 90's. If that were to happen, there would probably be a devaluation in many currencies as they attempted to stop hyper-valuation against the dollar and the death of their export markets. So interest rates stay flat short-run, but there's a run on the Greenback.

Another interpretation is that no one knows what is going to happen, since one report by the IMF comes out against US fiscal policy but another says its Treasury policy is sustainable. They cancel each other out so to speak. What a mess!

Exec's warn of failed US economic modernization effort,

The WaPo reports that corporate executives, usually not the foremost critics of globalization, are warning that the US could lose its technological edge against China, Russi, India, and other developing countries. They are quickly catching up in this category. In the history of nations, it is generally government that has led the building of critical infrastructure and driving economic/technological modernization. Some examples?

The prize of Queen Anne was given out for the solution to the Longitude problem. It was necessary for navigating the oceans. Through sighting on the stars, it was possible for shipping fleets to determine latitude or the north-south position on maps. However, it was impossible to determine reliably or the east-west placement with any precision. Before the British government of Queen Anne offered the prize, the best method known was to drag trailing bobs behind the ship and by how fast they played out calculate the velocity and therefore general distance traveled. The errors in the method could often lead ships to smash themselves on shoals or rocky shores however because they thought they were someplace that was further east or west than they actually were. It was eventually a clockmaker ironically, who through developing ingenious clocks whose mechanical accuracy was not affected by their parts being tossed about onboard a ship that allowed the longitude problem to be solved by comparing the time set on the clock to observed high noon of the sun straight above the ship.

Similarly Railroads were heavily promoted by government intervention and laws that facilitated gaining crucial landspots and gave subsidies for building them. The railroads completely changed the rules on business shipping and casual travel. Later on in the early twentieth century, Rural Electrification built an infrastructure that allowed America to automate their households and businesses. The development of Airplanes the Wright brothers was specifically for military use by the American army corps. Later after the war it would revolutionize shipping and travel again. The invention of Radar was pioneered by the British government to help the RAF mobilize against German air-raids. In the twentieth century it would be government scientists working for the Defense Department that would create the Internet a vast communications network that allowed the Information Economy to come of age.

Not all innovation or forward developments are driven by government planning of course. But in the history of human progress it has often been the government that has coordinated and encouraged large infrastructure projects even when individuals or private companies have taken the initiative in creating the technology and science. Since America's might and prosperity depends heavily upon its leading dominance in technology and science, the structural economic shift taking place can only be managed by a government willing to look at the long run and take into account the big picture. We need to lay the ground-work today for the future of tomorrow.

Bad and good economic news, the IMF weighs in

The bad news is that the IMF in a NYT article declares the US fiscal policy to be a threat not just to its own economic prosperity but could threaten world economic performance. The good news is that the IMF has declared the US budget and deficit prospects to be ill-favored. This is good news because through the 90's the IMF had a track record of prescribing budget austerity and market liberalization. Robbed of the Keynesian tools to curb economic shocks from becoming full blown crisis, and subject to speculative instability because of deregulated markets open to foreign investment, many countries became economic basket cases. Argentina is still that way. In fact, the countries that defied best meltdowns like the Asian Economic Contagion Currency Crisis back in the late 90's were the ones like Malaysia that discarded such advice. Since the IMF has a track record of being wrong, that's good news for the US economy. Call it a leading converse indicator. Whatever way they fall on a subject, think seriously about betting the other way. This ironically is a backhanded vote of confidence for the Bush II Admin fiscal policies that I have strongly advocated against earlier.

Hey, I did it again! South of the border raises questions about Iraq,

NOTE: Once again I wrote a comment on Dan's blog, and thought it was good enough to paste to my own. Enjoy.

Dear Appalled Moderate,

"With the possible exception of India, I can't think of a viable democracy coexisting with crushing poverty and lack of economic opportunity."

Would you consider Brazil or Mexico to fit your analogy?

Seriously, advocates of foward promotion of Democracy to my knowledge do not mention South America or Meso-America. This is a hugely diverse region of multiple cultures (mostly related by Spanish or Portugese colonial influence) that has had a history of transition to democracy. It is also a stark warning to those who would let a hundred democracies bloom. It is also a region that has seen heavy US influence over a period of decades to the present day.

The answer seems to be that yes, Democracies can successfully form from previously autocratic and economically devastated third world countries. It is also often extremely unstable, prone to civil wars and revolutionary movements, often is plagued by uneradicable drug export problems, open to competition from other political ideologies such as Socialism, and not necessarily very friendly toward the USA at all. It is also true that even after decades of structural political progress, many of these countries are economic or social basket cases even with heavy Western patronage and guidance. Think of Venezula with its large oil industry and then think of Iraq, or Columbia and then of Afghanistan.

I'd say that anyone overly optimistic about the progress in Iraq or exporting democracy elsewhere should take a serious cautionary note from south of our border. People down there are still coming north because things are so much better here in every which way for most of the citizens of these countries. History - those who do not learn from it...

Hey Oldman:

That's Claude Tessier you were quoting, not me. You should have been able to tell it wasn't me by the lack of typos and presence of philosphical content.

I have no problem with encouraging democracy as suggested in the footnote and detail post by our proprietor. I just fear that W might turn his devotion to the "promotion of democracy" in various places as another reason to indulge in a little preemption. Unless there are genuine US interests involved, that would be an outrageous use of the troops.

Tthe rise of democracy in Latin America in the 80s always struck me as something that was organic -- rather than the result of US influence.
For that reason, my guess is, despite the strains we see now, most of the regimes down there will continue to be democratic.

Posted by appalled moderate


Dear Apalled Moderate,

Thank you for the correction. You are absolutely right, usually your posts are more 'nuanced'. As for your commentary, I would agree that Democracy is here to stay South of the Border. However the road to this point has been filled with corruption, civil war, social turmoil, and they still aren't necessarily places you'd want to live OR in agreement with the USA. And while the overall arc of democracy was organic, there has been extreme influence by the United States including invasions, power play diplomacy, taking part in coups, propping up dictators, etc. Noriega wasn't that long ago.

The question is are the American people really gung-ho on doing this for the next thirty or forty years. Because that's been the kind of history we saw south on the border, with some of the civil wars (Columbia) and political instability (Venezula) and economic problems (Argentina) continuing to the present day. There were been no simple ecstatic spreads of democracy and economic liberalization similar to Eastern Europe which the pro-transformation advocates are fond of quoting. What if the Middle-east is more like South America than Eastern Europe? We could be in for a bad time for a long time, and meanwhile other priorities would have to compete ...

An current economic overview,

NOTE: This post was originally a commentary on a thread on Daniel Drezner's weblog. The content was good enough to clip and copy it onto my own weblog. Writing is hard, why do it twice if you've done it well the first time around? Gotta love Copy and Paste.

Let's try to take a step back and get a big picture view on all sides shall we? I think we can all agree that formal unemployment underestimates the number of people that are ready and willing to work but have no opportunity. The "real" unemployment however isn't nominally as bad as it was in the 90's, and that wasn't as bad as in the 80's. For those out of work however, they often have been out of work for a very long time.

This is because the economy is undergoing a precipitous structural change. Despite the upbeatness of Catherine Mann's economic article cited by Dan Drezner in his blog, a growth of a few paltry percentage points in IT that doesn't even match inflation much less smoking hot GDP isn't cause for relief. It is the statistical sign of foreign outsourcing of formerly domestic jobs. The fields hardest hit are the ones with still a backlog of current or up-and-coming trained personnel but the greatest globalization transfer impact.

The economic recovery is not robust, with labor not just wobbly in manufacturing but flat in service as well. Whatever jobs are replacing some (but not all) of those lost to globalization are often lower benefit, pay, and status service oriented jobs. This is supported by how wages have not risen even as productivity has, as well as the slow jobs growth number compared to extremely hot GDP.

Krugman et al. are in fact over-reaching, and therefore damaging their credibility by this. Their likely motivation is that they feel that GWB is mismanaging the current economic modernization, and more importantly preparing the USA for a castatrophic economic shock in the long term. However, the economic shock will not be felt for many years and it is frustrating in order to try to make long term impact arguments on most people who don't know that much about the economy and have an extremely short window of forward planning. Even Wall Street doesn't look much more than a few months ahead of time.

Out of understandable frustration, Krugman et al. have tried to tar GWB for what anyone rational would call a cyclical recession and structral economic modernization. This has bit them in the ass, because of heavy Central Bank, Federal, and Treasury stimulus the economy has come back - but by all the numbers is still not steady on its feet much less running full speed.

Nice going Kristof!

Kristof is a columnist at the NYT. His op-ed article on the "God Gulf" is very good and should be read by anyone thinking about electoral politics this year. His summary of how Republicans are focused on personal morality and elitist on policy issues, but Democrats are focused on social morality and elitist on personal values is a great observation. He may or may not have invented it, but he should get credit for the sense of saying it.

Economic decline of America,

This Associated Press article discusses the increase of consumer debt, doubling over the last dozen years. This trend has continued despite the cash infusion from mortgage refinancing. The conclusion has to be that people are stripping their own housing assets for ready cash. This combined with a historically low savings rate doesn't bode well for the solvency of the American household.

The cause why? Lou Dobbs Tonight has a special called Exporting America. While some commentators have noted that it's not a single one for one transfer of jobs overseas, it is true that the American manufacturing base has contracted 16% in the last three or so years. That's approximately one in every six manufacturing jobs. In addition, while there may be only about 20% overall job-loss contraction due to overseas job transfers from job losses the replacement 80% of jobs are not necessarily the same quality as the previous ones. This is the problem of the so-called underemployed, a variation on the old problem of being over-qualified for a position. Nowadays people are widely taking low paying and low benefit service jobs that are far less satisfying than their previous careers. The jobs re-training programs are openly redirecting people toward such occupations, in the anticipation that this is where they will be able to find employment. So a former manufacturing worker in Iowa would be retrained for a job as a respiratory therapist, making about half of what they made before.

This problem is not only with manufacturing jobs, but as Lou Dobbs Tonight points out, it is a widespread phenomena applying to accountants, computer programmers, telecommunication workers, etc. IBM recently announced that they too will join the trend by outsourcing more work overseas in order to remain competitive. Daniel Drezner on his blog has cited Catherine Mann's economic article describing anticipated productivity gains to come from an IT globalization outsourcing movement. The problem is that GDP has been as widely touted by the GWB Admin as as smoking 8%+ for several quarters. The figures cited for the growth of IT jobs for computer programmers are a few paltry percentage points, maybe not even matching the still low inflation figures that justifying the Fed currently holding interest rates at the historically low 4%. This is a field that used to lead the American economy, and now it's in a growth contraction. Clearly the job growth in America is not going to be led by the IT field. With all due respect to Catherine Mann, rationalizations like this to my mind just add up to apologism for Market Liberalism, corporate slanted globalization, and Supply Side economics run amok.

Well the plight of American labor may or may not move people, but the truth is that it's not just the little guy that is getting quashed here. There is danger of systematic failure, which is another way of saying that the whole economy might tank. How? Previously I've criticized Paul Krugman for allowing himself to be seduced into quick and dirty arguments that burned him as the economy has shown signs of turning around. Here he redeems himself by writing an excellent article discussing the true dangers of GWB Administration fiscal and trade policy.

Well is there any sign of this collapse of market confidence or is this just chicken little crying about the sky falling? Well as it turns out the dollar is tumbling compared to the euro, which is a direct proxy for relative confidence in economic performance. Consider that Europe has been widely acknowledged to be stuck in bad labor agreements in France, Germany, etc. and a basket case with companies not just like ELF turning belly-up but the dairy product giant Paramalat in Italy suddenly imploding. If despite this the markets have less confidence in American economic performance even before the true effects of large deficits haved kicked in then the falling dollar is no less than a blinking red danger sign.

As for the rising tide lifting all boats counter-argument, I guess somebody forgot to tell the manufactoring sector and for that matter the service sector as well. This is still a fragile economy, pumped up more by Central Bank, Treasury, and Federal stimulus than it is a truly recovered stage of the business cycle. While Krugman's arguments against the recovery of the economy being genuine are kind of iffy, his heart is in the right place and while the economic surge is real it's still wobbly. Everything could still go to hell pretty quickly if no one is minding the store. The continued deflation of confidence in financial markets due to the continuing unpunished scandals on Wall Street can't be exactly greasing the wheels of commerce either whatever the current hyperbolic heights of the DJIA.

As for any rebuttals based on criticizing Clinton, please remember that George Will has in the WaPo op-ed pages noted that Rubinomics, or the economics of Rubin the Treasury secretary under Clinton are actually more conservative than the present illiberal budgetary tragedy of the Republicans today despite the fact that they control Congress and Pennsylvania Avenue. I have yet to hear anyone accusing George Will of being a liberal commentator, and indeed his position is well established as a conservative economic pundit. The idea that Rubin, who as Will notes focused so long on establishing confidence, is forecasting a precipitious and future failure of market confidence in American economic prospects is rather quite alarming to any sensible person.

Some surely however will object that no reasonable person would take a course that utterly irresponsible, and that surely the GWB Administration would never do anything that completely disasterous to America. Well there's a problem with that interpretation of events. Jackson Diehl in this interesting piece in the WaPo illustrates how perfectly foreseeable many of the current factors in the Iraqi reconstruction struggle were. Jackson Diehl also to the extent of my knowledge hasn't been accused of being a liberal apologist or advocate. As this is the case then, the Bush II Admin is on record as taking on a huge task but completely ignoring any salient and proven facts on how they should proceed and because of that running into huge and entirely anticipatable problems later on. As Rummy might say, it is known that the facts are not "unknowable", and so we can know them and so act on them. So the fact of the situation is that the GWB Administration has a demonstrable track record of being able to drive a hugely important situation directly into a brick wall despite abundant and perfectly accurate information warning them to do otherwise.

This of course does not bode well for the prospects of the Bush II Administration being able to manage or finesse this little problem of a systematic market failure of confidence that may strike America because of fiscal mismanagement. Indeed, the Bush II Administration seems to be perfectly determined to go forward full steam ahead on the basis focusing on ultimately misleading attention on indicators like short term GDP growth, stabilization in the rate of unemployment claims, and a not quite as big as expected budget shortfall. Yes, it's true the Bush II Administration is taking it as a good sign that we're not quite as deep into the hole as the worst case scenarios might have suggested, but instead we're just short of them. While I'm not advocating that the worst should happen, it seems doubtful to me that merely falling short of the worst should be a grand occasion for celebrating success as much as a grateful reprieve to be quickly followed by a scramble to get out the pit as swiftly as possible. This is the nature of hubris however, even when a way out offers itself the prideful and arrogant take it as a sign that one should press on and damn the consequences. This is of course a great way to get a situation to blow up in one's face by going too far and rushing in where angels fear to tread.

As such the final conclusion is that unless there's a serious change of heart in Pennsylvania Avenue on the scale of the Grinch's conversion or that there's a change in office holders come November then we are all well and truly fucked.

Foreseeable error,

Here Jackson Diehl says it all. Too bad. Coulda, woulda, shoulda. Unfortunately, we're still stuck with these losers running the show at least until November. Argh!

A case against frivolity,

A few posts back I railed against the obsession of the news media with Michael Jackson. To be fair, the preoccupation with scandal is hardly a new phenomena. Yellow jounralism afterall propelled Pulitzer to the fortune with which he would attempt to redeem his reputation later with by establishing the most famous prize for journalistic high-mindedness and excellence anywhere. Nor is it a particularly bad thing that human beings have a streak of tabloid fever in them. I am not against vicarious and voyeuristic prurient interest in the affairs of others per se.

The problem is that when this sort of fascination crowds out higher priorities. If afterall a spouse was about to go to the hospital to deliver a child, one might expect a person to reasonably put all thought of reading the tabloid story regarding Michael Jackson's relationship with children for more personal and relevant concerns regarding their own impending child. This would be only natural and right, and any person who acted contrary to this expectation would be questioned most likely as to the correctness of their personal priorities.

True frivolity is not merely goofing off. Play-time whether for adults or children is a healthy and even necessary part of life. All work and no play makes not only dull people but worse ones as well. There is however a time and a place for things. Entertainment is recognized as pathological when it becomes an obsessive concern that crowds out other important components to a balanced lifestyle.

Recently Penn of Penn and Taylor the famous team of magicians wrote an op-ed piece for the LAT. He related that he had been asked to comment on the relationship between the principles employed in stage magic and those in politics. Most of the article was devoted to the discussion of misdirection. The audience is never lied to, but instead given distracting or misleading perceptual cues and then left to speculate whatever they wish. The audience rarely comes to the simplest possible and logically necessary conclusion, that it is a simple bait-and-switch job but even educated and intelligent observers often try to create complicated explanations for rather straightforward illusions. Penn directly compares this to how politicians perform their own craft.

The analysis is brilliant and correct. By framing the issues to their advantage, by suggesting more complicated reasons than in fact exist, by encouraging people to rationalize the policies, and by distracting the public with impressive-seeming but empty displays politicians are able to "magically" entrance and "trick" their audience into agreeing and carrying out their agendas. The most recent incarnation of this methodology is the so-called divisive social wedge issue. In reality this sort of thing has been around for a long time in public discussion. Demonizing opponents and scapegoating them is a time honored technique in demagogery.

Dante Chinni of the Christian Science Monitor has written recently an excellent opinion peice on the likely use of legalized gay-unions in the upcoming 2004 elections as precisely one of these divisive social wedge issue. His analysis neatly sums up the frustration of a sense of priorities gone wrong and a sense of outrage that politicians on any side of an issue would use what is essentially a matter of lesser importance to divide people from what should be their own best interest on matters of greater import.

For the homosexual and alternate-sexual identity citizens of this country, as well as for those strongly opposed to such practices no doubt it is a matter of consuming personal importance to resolve this issue. However if a theatre is burning down, I'm not really concerned if the couple next to me is homosexual or even joined in legally sanctioned matrimony but my most burning concern would be whether or not it would be possible to avoid being burned to a crisp. My assertion is that even those who believe strongly one way or another regarding the issue of gay-marriage should subordinate their personal concerns when discussing and supporting politics if other issues of greater life-and-death value are on the table.

This is only possible however if frivolity, or the inappropriate priority of concerns, has not taken hold. A people willing to be obsessed by the Michael Jackson drama, not as a fascinating commentary on the human condition, but as a prevailing focus of primary attention is going to be more likely to allow themselves to be misdirected by unscrupulous political actors of any stripe. When the house is burning down, you don't ask if your child has made their beds no matter how irritating it might be that they neglect it - you just try to get everyone out with their skins intact and damn the bed-spreads.

In a slow election year it would be appropriate for the American people to let concerns such as the moral decay induced by Britney Spears videos affecting impressionable young women's minds dominate the public discourse and priorities. This election year however promises in order to prove a stark choice between two different possible paths that America can chart into the future, with dire consequences domestic and foreign abounding. In 2000 the big media outlets got the story horribly wrong when they advanced the interpretation that there wasn't that much difference between the two major candidates running for President. Now we know that whoever is elected will determine the outcome of a struggle for the direction of America itself. If GW Bush is elected, it will stand as a vindication and further encouragement for all the policies advanced in his movement. Similarly, if his opponent is elected it will be seen as a repudiation of those very same policies and a choice by the American people for a different manner of doing things.

Whatever one's position on matters, one shouldn't allow frivolity in order to undermine the seriousness of the current debate. I supported Dole in 1996, but I didn't end up voting for him. Part of the reason why was that I didn't perceive him of being capable of winning even with my best efforts. This is what a political commentator might call not having an "energized" or motivated (political support) base. However in this election, not only am I going to be voting (as I voted in 2000) but I'm participating in the Primary process. Allot of important issues are on the line, and for me its imperative that they be decided not by a passive tolerance or indifference but by active deliberation. This year we basically get to decide the future course of American democracy, and I for one want to be able to say that I did everything possible to do my part in determining that choice and making sure that it was decided for the right reasons.

So if there is a New Year's resolution for the American people, let it be no more inattention and no more frivolity. Let us put away things that however normally important to us are not critical right now, and let us focus on the very important issues and process before us.

Slow posting day: Family time

Saw my brother and an elderly relative off to the airport today. It was all smiles and genuine hugs. Then it was a delightful evening visiting another older relative. A good time was had by all. Our culture often tends to depict family as somewhat humorously eccentric people we happen to be connected to, and not at all part of a normal social life. In other words, family isn't supposed to be fun - or if it is then its a rather plain vanilla Disney ride kind of fun. The flip-side is the ubiquitous side commentary of the family as a source of dysfunction. My childhood was dysfunctional to about the normal degree I expect. Getting really fucked up was admittedly mostly my own idea later on. From such suffering came the hated improvement of character which is the eternal runner-up-prize seemingly for bitter frustration and disappointment. From picking up smarts about the world however, we then learn how to really appreciate our lives not in a passive and resigned sort of way but in a way that let's us see what we've taken for granted in a new light. It's something I swore I'd never come to say as a youth, to live without regrets but with regret comes a new appreciation which I wouldn't now give up for anything.

In other words, despite the usual troubles of growing up I now really love my family in a way that in the midst of my conflicts with them I could have never really felt. Not all is forgiven, but things are put into a different perspective and you simply get different priorities after having lived through certain things. Life changes you, and though the passage is hard sometimes it's not all bad. One of the rediscoveries I've made with age is that family can be fun. The fear of our culture is that it will be a claustrophobic and ingrown relationship, but this is really an exaggerated reverse projection of our guilt at the fragmenting of our extended families. Families are those closest to us, and love them or hate them, it's hard not to feel deeply about them. This is ironic since our modern life is persistently always trying to take us away from them in ways small and large.

Even on a quickie post however, let me put in my two cents on the ridiculousness of wishful thinking. Recently Glenn Reynolds cited Gen. Petraus who is the director of a large portion of the north (~Kurdish) part of Iraq. In it he cited that some former Saddam sympathizers and Baathist officials after the capture of Saddam have started turning in some weapon caches and coming over to cooperate with the Americans. Glenn Reynolds feels that this is a sign of the way the wind is blowing and a positive sign, as implied by the General, of improvement in Iraq.

While it is entirely likely that the capture of Saddam might have taken the wind out of the sails of a few Baathists, it is much more likely that the rising tide of endemic political assassination in Iraq might have had a stronger weight in the decisions of these Iraqis in changing their colors. It has been reported through multiple outlets that all over the country revenge killings and settling scores have been going on. In particular, many former high profile Iraqis have been found with bullets in them and the American occupation authorities are simply looking the other way. While it is not in my soul to weep tears for the comeuppance for former Saddam officials, the sign of what is to come that it indicates is not the one that Glenn Reynolds is thinking in his rather wishful speculations.

With all due respect to the General who because of his position is obligated to put the best face on things, it is much more likely that Baathists fearing being killed out of hand may be trying to get in good and establish relationships of cooperation openly with American forces in order to insulate themselves from a case of lead poisoning. As such, that they would be pressed enough to throw themselves upon the mercy of American patronage is not a good sign at all. It is an indication of the behind the scenes power struggle occuring among the Iraqi factions, which is coming slowly but surely to a frothing boil of anarchy and civil war.

It is not enough to know, one must know how one knows, and also what it means. This is the difference between knowledge, understanding, and wisdom respectively. Glenn Reynolds as an educated intelligent and articulate individual has cited a fact. Unfortunately, appearances are often deceiving and what might seem as a positive sign is in fact more likely an indicate of dire portent. In hospices, workers can tell you that right before a terminal patient expires many may experience a short and temporary improvement. This cruel fake-out raises the family's hopes and then crushes them not because of some mysterious trick, but because part of a patient's decline is caused by their body fighting off their illness. Just before someone dies, their body gives up the fight and they often experience a temporary rebound just before the illness completely wins and they expire.

Life unfortunately often does not move in clear easily discernable trajectories. It is easy to become confused, and see as a sign of hope what should trouble one with worries. Learning how not to get faked out by life is part of experience and wisdom. Unfortunately, Glenn Reynolds seems to have allowed himself to get taken in by this supposed "sign of hope".

Wishful thinking and whistling in the dark,

GW Bush is not the anti-Christ. At least, nobody has told me of it. As far as conspiracy theories go, the one's surrounding Bush are fairly tame and usually involve something on the level of malignant neglicence or corporate cronyism. Perhaps it is the self-confessed born-again Christianity-on-one's-sleeve stchick that he indulges in. Even his most ardent foes consider that part of his persona fairly authentic, in that in some twisted fashion he truly does think he is doing good and being only reasonable in his decisions. This sort of oblivious good-naturedness married to an imperviousness to any sort of depth of reflection is refreshing to some people. Whatever is actually going on, it seems clear that the man means well.

This bluff straightforward utter lack of anything resembling complication was appealing to many Americans, especially as a backlash to the "nuance" and moral equivocation of the Clinton years. "I did not inhale," was worse than an admission of guilt in many ways. In my ears it rung of a man ashamed to own up to what he had done, and so consumed with looking over his own shoulders that he might actually have hedged in the moment of indulging in a minor social taboo. It wasn't that I thought he might have inhaled, it was the repugnance of a personality that might have actually pretended to puff and therefore couldn't even commit to the commission of a transgression. It was a prophetic utterance, reprised in a fashion that should have not surprised anyone he later said what should have been utterly clear: "I did not have sex with that woman." As it turned out, such a perfectly simple statement was rendered a deception by a personal and private redefinition of the word "sex" to narrowly mean only vaginal intercourse.

Over-reaching by Krugman,

The problem is that this recession has never been all that bad. It was only bad in relative comparison to the recent peaks of the go-go nineties. Anyone with perspective could have told you that the suffering was quite a bit worse in the recession of the early 90's, and that in turn psychologically wasn't as bad as the Reagan recession, and that in turn was nowhere as near as bad as the slump in the 70's. The recession was probably affected maybe on the order of a few percent either way by the domestic policies of GW Bush. The way the business cycle works, as well as the sheer size of the American economy compared to the discretionary portion of the Federal budget expenditures means that any President has at best minimal short-term impact. By short term it means anything from 1-2 years. Mid-term or from about 3-4 years a President has some modest impact that usually presents itself as a shift in the momentum of the economy's growth. The true impact of a President's policies are often not felt for a decade, or many more, after their term.

It was amusing to watch Democrats take pot-shots at GW Bush on the present state of the economy. Likewise it is unfair to blame the downturn on President Clinton. The delusions of avant-garde economic pundits on the demise of the business cycle proved nothing more than the vapid chattering of those whose good sense was swept away by a financial bubble. It was with somewhat darker humor that I regarded the squirming of the Democrats when the economy began perking up, more or less on schedule. The last recession and the recession before that lasted a similar amount of time.

Of particular note, Krugman as a political commentator from his perch at the NY-Times staked a considerable portion of his prestige on predicting in a full-length book named "The Great Unraveling," in which he blamed the economic down-turn on GW Bush's policies. Krugman is an economist of considerable prestige who has had a fairly good track record down through the years in the prediction department. The problem is that in attempting to make a more general point, Krugman has like many liberal commentators allowed himself to be seduced into making a bad argument and now that the economy is showing short-term improvement it's biting him in the ass.

The problem is that the Bush Administration is really a financially irresponsible set of penny-pinching assholes. Their penny-pinching which has included proposing cutting combat bonus pay to families of soldiers in the line of fire in Iraq, has known no bounds. Their policies are not only merely wrong, they are positively mean-spirited and overall stupid. It has undoubtedly worsened the pain suffered by many families during this recession. Among their tactics has been going soft on corporate criminals, helping to let those who have defrauded millions of American families in order to get off with nothing more than a mere legal slap on the wrist. This has been a veritable signal to corporate criminals that it is not only business as usual, but no one is minding the candy-store.

While this has increased the pain of Americans in these ways and many more, the aggregate economic impact in the short-term has been as noted minimal. The Bush Administration policies are a real disaster, which hold the potential to derail the status of America in the future as the predominant economic leader of the world. But the real costs of their neglicence and mistakes will not be fully realized before the 2004 election.

The frustrating part is the long-term insanity of the Bush Adminsitration policies ("voodoo economics") will not be apparent to the casual observer for many years. Until then, their ideas about charging up the accounts today and paying them off tomorrow will probably be popular in that they promise everything under the sun with no downsides. There is no such thing as a free lunch of course, but this sort of long-term planning and determination is frustratingly hard to convey to ordinary people. The worst part is that there are so-called educated individuals who through wishful thinking and allowing themselves to talk-up what they cannot possibly deliver upon exist in order to make the implausible sound half-way possible to the person on the street. It must be remembered that such individuals also existed in abundance in the latter days of the internet bubble on Wall Street. Their voices since then have been conspicuously silent as reality has come crashing down on the party. Indeed, it was not mere wishful thinking but as Elliot Spitzer has exposed since then it was part of a deliberate concerted effort to defraud millions of small investors at the expense of rich insiders in no less than criminal con-artistry in a multiple array of schemes.

In the same way, similar enablers have through their strong verbal defense of the indefensible helped muddy the waters of what otherwise should be a cut and dried matter to anyone of common sense. Unfortunately it must be said that liberals such as Paul Krugman have lent some credibility to the arguments of such deceivers by allowing themselves to be baited into making a false argument. GW Bush is not significantly responsible for the present state of the economy. He shouldn't be blamed for the downturn and he shouldn't get much credit for the present recovery in economic indicators such as GDP, unemployment, etc. By trying to get a cheap shot in while things looked bad, now commentators like Krugman have allowed themselves to be discredited because things have begun to turn around - just as they would have under pretty much any President.

In a post today on Anrew Sullivann's blog as the guest-blogger, Daniel Drezner has deconstructed some of Krugman's recent criticism regarding the improvement of the unemployment numbers. Daniel Drezner's commentary, drawing from numbers posted by de Long and others is a solid rebuttal of Krugman's rationalization. It however misses the forest for the trees. Yes, by over-reaching Krugman and other liberal opponents have gotten egg on their faces. The problem is that they really are right in the long run. GW Bush's policies are fiscal suicide and threaten to drive this country at full speed into an economic brickwall. These future consequences will however probably kick in when the Bush 43rd Administration is no longer in power or accountable to face the music for their blatant irresponsibility. That is the big picture that has been regrettably obscured by the over-reaching by Paul Krugman and others, in their understandable but erroneous attempt to tar GW Bush for something that was obvious when he seemed to be on the verge of getting away with doing something far worse but not immediately obvious.

People get the leaders they deserve, and not the ones they need. If the American people really are passive enough to lay down and take it when their leaders let crooks hit the road scott-free and lay up economic ruin for future generations by enacting foolish policies today, then maybe we really do deserve what we are going to get. This afterall is a democracy. If we fail to hold our leaders to account for being criminal accomplices after the fact and for being spend-thrifts then maybe we don't deserve any better.

Appeasement vs coalition of the willing,

In pre-modern times, the practice of tribute was commonplace. In it, a subjugated or servile nation would offer money, slaves, and/or soldiers for the use of the greater hegemonic power that counted them as servants to its ascendency. Tribute can be distinguished from taxes in that it represents a transfer from one national polity to another distinct organization, rather than representing expenditures that mainly improve the services or infrastructure of the tax base itself. The interesting thing is that it's come back in style.

Daniel Drezner on Andrew Sullivan's web-blog has been hammering on a theme in which he says that the Bush Administration has been more multilateral than conventional wisdom remembers. This is nothing more than wishful thinking. The Bush Administration as shown in its gesture of removing restrictions of direct aid to Iran in the wake of the Bam earthquake is not incapable of politic manuevers. The key test of rational dialogue however is not when parties agree but when they disagree, and also particularly the parity of the relationships within the framework of cooperation. One-sided relationships are rarely healthy in any setting much less the affairs of nations. The Bush Administration was perfectly willing to go to the UN in order to argue the need for a resolution authorizing collective agreement on the need to take military action in Iraq. When things didn't go their way, they simply ignored the nicities and proceeded anyway.

This pattern of only superficially being interested in diplomacy is no more on putting a nice face on trying to get their way irregardless of the objections of others. It is true that multiple governments in Europe from Poland, Spain, Italy, etc. supported the US invasion of Iraq. It is also true that almost uniformly the populations of these so-called democracies opposed the invasions by substantial majorities. In other words, the support derived from the so-called coalition of the willing is mainly the elites of various governments deciding that their bread is better buttered by sucking up to the only super-power in the world rather than any philosophical agreeement or deep feeling of friendship on behalf of these nations.

This has been emphasized in a recent opinion article by Richard Reeves on the loss of the two Thai soldiers in Iraq. With about 60% of the population not favoring intervention in Iraq, the PM of Thailand has nonetheless committed his nation first to humanitarian reconstruction and then using the death of the soldiers as a pretext has escalated his involvement by dispatching ground troops for the purposes of "force protection". Clearly this manifestly unpopular policy is not being conducted because the Thai government's great respect and friendship for the people of the United States, or the compelling moral cause of the reconstruction of Iraq. These reasons were not sufficient to motivate afterall India or Pakistan to involve themselves. What India and Pakistan have independently however is a strong relationship on political, military, and economic levels with the United States of America. They decided after deliberation that they didn't need to involve themselves in an adventure so domestically unpopular in order to secure the good graces of the USA.

Thailand however was without such a sinecure, and having only superficial diplomatic relations with either the USA or the rising hegemon of the region, China, it needed to politically ally itself in a firm military fashion in order to ensure its security. Hence the dispatch and escalation of Thai involvement. To call this an act of multilateral cooperation is to mock the term. In this fashion, robbers may be also said to cooperate with banks when tellers cooperate by handing over money in order to avoid violence. The good will or ill will of a USA that has made clear that "either you are for us or against us" and openly ties the Iraq matter to cooperation in other spheres is a powerful incentive in order to "put up to get along" even when a nation might otherwise disagree in their hearts of hearts on a course of action.

Even those nations that have sent tribute to the powerful liege of the USA have seen little domestic benefits. Apparently, Uncle Sam is a cheap date and has little appreciation for the concessions that partners to US foriegn policy must make in agreeing to policies domestically unpopular. Part of the jeers directed at Azner in Spain and Blair in Britain have included the rejoiner that there have been few considerations for even those nations most willing to support and excuse US excesses in the face of losses and setbacks to credibility, blood, and treasure.

In this manner we can see that present US policy has little intention of gathering together a coalition of the truly willing. Instead it seeks to gather together a group of nations whose gratitious favor-currying and fear of US retribution drive them to offer tribute to the hyper-power of the USA without any sort of reciprocal concessions in return. This anxious hand-wringing group of elites who have moved their nations far forward of any popular mandate for such actions are the face of the international "support" that the USA currently enjoys. From having allies and friends, we have gone to having obsequious ass-kissers and nervous bet-hedgers as the principal tenor of those who concur with US policy.

The USA is in little danger of any single force either economic or military deposing its primacy over the affairs of nations. However mismanagement and over-extension could easily render the USA vulnerable to being displaced as the single greatest national power in the recorded history of mankind. Even now, China with its vast industrial capacity, massive population, and rapidly improving technological base is rising on the horizon. While having more friendly relations with the USA and less cause for future territorial conflicts, India is not far behind in potentially displacing the USA as the foremost of nations in economic terms. A generation or two, and the tables may be turned.

At the very moment it is doing so, the USA is finding itself hard-pressed in order to finance all its needs whether from economic modernization, social services, military budget expenditures, to domestic security concerns. The power of the United States depends on its economic prosperity and the technological advantage afforded by a well-educated and hard-working populace. Part of the historical exemption from the extended family that has made possible the great mobility and flexibility of the US workforce has relied upon the ability in the latter half of the 20th century to free people from the heavy burdens of childcare and eldercare through a public education system and a comprehensive retirement financing system. It is extremely short-sighted in order to try to privatize or cut back social services if it comes at the cost of diminishing the economic and technological advantages gained by freeing the workforce from familial obligations that would otherwise hamper their careers.

And if the USA having fallen or stumbled and diminished, as has been the course of every great empire or hegemon in the past has done in the due course of time, how will others treat us then when we are no longer the great power that must be appeased at all costs? Will we have left a legacy of a cooperative frame-work of nations in which might does not make right, or will we have left a bitter after-taste even in those nations that have appeased us for fear of retaliation when we weilded our historical power not to advance the future of mankind but to indulge our petty ambitions of the day? Even the greatest power must always be cautious of arousing embittered resentment. The history of nations is rife with feuds and conflicts that have proceeded generation upon generation, and cautionary tales of how the pasts of nations can cast a long shadow over their own future generations by poisoning the minds of other peoples against them. September 11 however unjustifiable in human terms was in the minds of its perpetrators an act of defiance against the stereotype of callous American supremacy that humiliated and subverted all others to its blind ambitions of cultural, economic, and military domination. We do not do ourselves any great service by giving any sort of credence to this cariacture of American character, and the past wrongs committed by American blunders cannot be washed away by belligerant forcefulness in the present.

Nobody likes a bully, even those who suck up to them.

What's the difference? Ask a cowboy.

In the run-up to the 2000 election the big media spin was that there wasn't that much difference between the two candidates. It was the mantra of the rabid Ralph Nader when he positively chanted that Gore=Bush. While at the time, I was sympathetic to the potential for a third party in American national politics it didn't make much sense then. It was a ridiculous reactionary response to the Clinton years, where centrist Democrats had tried to move their party to political moderation from the wilderness of being prisoner to corrupt special interests. The story that the media missed of course was that the Republican party had been moving progressively to the right and using divisive social "wedge" issues to develop the politics of bigotry and greed to a new perfection. It was not a subtle point, but one blared out loud with the big-mouthed nonsense shouted by the defenders of the so-called modern conservative movement. It has come so far that Newt Gringrich, a man once reviled as obstructionist and radical in his politics has become the voice of sanity and reason itself labeling US policy in Iraq as having "gone off a cliff."

This struggle for the soul of the Democratic party would be amusing except that it is being replayed again three and some years later, with the stakes being the fundamental integrity of the United States of America. As a Republican let me be clear about two things. First there is allot of difference between G.W. Bush and Howard Dean, just as there was between Bush and Gore. Whatever illusions that Bush might have been a temperate President mindful of his lack of electoral mandate disappeared as soon as he was sworn into office. In the run-up to 911 it was clear to anyone who had eyes that Bush wasn't even making a pretense that his campaign promises were anything other than verbal honey meant to camouflage a determined uncompromising agenda. This was a radical agenda cloaked in the soothing false clothing of moderation. It was the tragedy of the nation, that allowed Americans in our wishful thinking that we could rise above our differences. It takes two to tango, and two to make a murder or a con job also. There was a very great difference indeed.

The second illusion is that Bush's victory might somehow be preferable to a Dean victory. I have no love for the Vermont ex-governor. Some of his antics might generously be called impishly humorous, and while one may speculate that such boyish charm was what captivated Mrs. Dean it is hardly a strong recommendation to the highest office in the land. At best regarding various issues Dean can be described as diffident on issues most Americans take for granted, and on others he is disingenuously advantage seeking as so many of his political ilk are wont to be. An anti-war big government liberal with a capital 'L' however is vastly preferable to a contemptible tyrant whose greatest mental association that he provokes to my mind is that of Caligula. It is not a choice between one dishonest politician and another, it is a choice between a President that I would dislike and a President who is engaged upon a campaign to weaken the very basis of the Constitution itself in his personal power grab. To call George W Bush a Republican is to spit on the grave of Abraham Lincoln, and it is a slur upon every person who dares call themselves a Republican in the land. It is not that GW Bush is a person who has my hate, he is too low and despicable a character to regard with any but the most passing derision.

These are strong words and I do not offer them without the strongest possible reason. The most recent outrage, merely one among many, to illustrate the disrepute of said base tyrant is the assertion to Diane Sawyer's question of whether there were WMD in Iraq or not, is his answer of "What's the difference." First let us be clear. The Gulf of Tonkin resolution was an outrage as well as the War Powers act blatantly unConstitutional. Wars are often built on lies, because there is hardly a sane reason to ordinarily convince large numbers of otherwise rational people to brutally kill other people on whose wellbeing the health of national economies are often interdepedent upon. War is first and foremost a crime upon the people whose nation is being an aggressor, often launched for sordid reasons of personal gain at the expense of the public weal. Where they are waged for ideological reasons, they almost surely quickly degenerate into oppression and violation of the most basic standards of human decency. However, this America of ours has survived such wars. It has survived the Spanish-American war and the lies that was built upon. It has survived the obvious provocation of Japanese military response in order to justify aiding Britain in WWII. It has survived the adventures in Mexico, and the genocide of the innocent indigenous peoples of this land conducted in the name of civilization and manifest destiny. Andrew Jackson was an asshole, Polk was a walking sore on the conscience of humanity, and George Washington did not scruple at the slaughter of natives.

The collective identity of a people however is built upon certain notions, which anthropologists call myths and psychologists call fictional memories of self-identity. We don't remember things the way they were, we remember them the way we need them to be for us today. History whether individual or aggregate is always a revisionist affair, with not only the victor writing the record for tomorrow but the monday-morning quarter backs of tomorrow second guessing the less than black-and-white choices of today. In retrospect, slavery was an unconscienceable human agony and the last gasp of an antiquated agrarian pre-industrial lifestyle attempting to maintain its identity when almost all other civilized nations had outlawed the practice. At the time, with most Southerners not owning slaves but key constituencies within their economy dependent upon slave labor most Southerners choose to go to war rather than have their way of life threatened with being dismantled by what they perceived as outside aggression.

Fundamental to the psyche of being an American is what can be called the credo of the cowboy. It has its roots more in fiction like 'The Virginian' than any extended historical basis. It is these iconic examples however that people draw upon for guidance in their life in general, however and perhaps precisely because how untypical they are. We do not need the ordinary to inspire us, we require the extraordinary to steel us to deal with the ordinary instead.

The myth of the cowboy can be summarized as follows. A cowboy defends against rustlers and greedy cattle-barons. A cowboy does an honest day's work for an honest day's pay, and he keeps his word. When violence is necessary, a cowboy is slow to draw and indeed it is a point of honor to let the other fellow draw first for it is by their willingness to shoot first and ask questions later that one identifies the truly unscrupulous. In the wild west, there was little law and what little there was favored the politically connected and monetarily powerful. The common person was often caught between brutal predation by criminals and ruthless exploitation by men not unwilling to bully people with hired guns. The ideal of a person who was willing to stand up against theft, could be trusted to conduct themselves properly without supervision, and was willing to speak up and take action against powerful interests was important to sustain the hopes of ordinary people in the middle of an environment that often betrayed their hopes.

Much can be written about the mythos of the cowboy. Most of what has been written recently has been less than flattering, casting it unfairly in the light of a justification for colonization and genocide. The reasons for the importance of such a myth are more complex however. It is not for nothing that 'Gunsmoke' was the longest running US TV serial by a long-shot. The last point, that the cowboy does not draw first is the most important one here. It is also a particularly cogent critic given that GW Bush has willingly taken upon himself the mantle of the Westerner, the Texan, and not undeliberately the cowboy itself.

In the myth, the good guys don't draw first. They always calmly wait until they draw out the dastardly villians lose their cool and attempt to gun down the unoffending good guys. It is at that moment, that the good guys then draw their guns and in the clear sureness of their moral superiority gun down the villian proving not only their righteousness but their superiority of force as well. Good guys don't need to pull leather first is the clear implication. It is an ethic that has informed TV depictions of violence however unrealistic through the years, and is often the dramatic highlight of the climatic showdown of many an action movie arranging in one fell stroke the downfall of the wicked and the vindication of the guys wearing white. Moral clarity has been a supposed virtue this Administration has aspired to, making its hypocrisy all the more objectionable after the fact.

However unrealistic, this myth which is another word for code of honor or defining truth is one that is deeply enshrined into the American psyche. Actual history departs from this code of honor quite considerably, but enough truth to it remains to resonate in the American memories of Pearl Harbor, 911, the Declaration of Independence, and all other American historical accounts of how they as a generous but stern people have been reluctantly drawn into armed conflict by the unjust provocation of others. Whether or not it is always true in detail, it is a truth that Americans have always been proud to both aspire to and be known by. It is at the heart of what often goes unsaid but is nonetheless essential to American character. As defining truths go, it is one that does more good than harm.

The problem is that this ethic has been violated egregiously by the man pretending to be President of the United States of America. His indifference to this issue can be summed up to his response of "What's the difference?" to the issue of whether or not Iraq actually had WMD before its invasion. It is the difference between a cop gunning down a fleeing perpretrator after being threatened with a weapon, and after gunning down that fleeing person and discovering that they had no weapon at all. If this were to occur in a community, it would be the occasion of an investigation or in the face of official indifference perhaps riots. Whatever the actual case, the important aspect is the intrinsic and perhaps universal human recognition that such instances fairly stink of unfairness and perhaps even blatant abuse of authority.

The supposed 43rd President of the USA has cast himself as a swaggering gunslinger. Indeed, his aides when he attained his office supposedly put out deliberately these words: "There's a new sheriff in town," The implication of these words being that there was a new authority in power, and one that would not tolerate the abuses of the past. This whole romantic notion of the gunslinger included as we now know the doctrine of gloriously facing down evil dictators who oppressed their peoples and cast a long shadow over neighboring countries all in the name of truth, justice, and the American way.

The only problem is that this gunslinger is wears black, and not white. By inviting comparison to the cowboy, he has highlighted his greatest weakness. He has gunned down not a man, but a whole people. Whatever justice in deposing a dictator, he has tainted it with the image of America as a lying bully. He has chosen to clear leather when the other man not only was not going to draw, but had no metal in his belt at all. This was not as some have excused mere befuddlement or wishful thinking combined with cherry-picking information that fit preconceived biases. There was some of that involved, there is little doubt. However, despite years of fevered accusations by spy agencies there was simply no credible evidence that outside observers could use to judge any significant WMD programmes. This lack of evidence was emphasized as how excited conclusion jumped to one after another unraveled in the cold light of day as not a single accusation of weapons programmes materialized to justify wild speculation.

The fate of one mean-souled third world dictator is without significance in the grand annals of American history. It is a mere bagatele without great import. The idea of Saddam Hussein defying America was a fevered dream crushed underneath the treads of the 3rd ID rolling into Baghdad. A grevious injury to the hopes and dreams of America has been dealt however, a wound made infected by the lies of the Administration that has compounded such an injury by using it to deny justice to the victims of the outrage of September 11. Every moment that the deception is perpetuated upon the American people that somehow invading Iraq was justified by the events in the twin towers, it is another moment that the outrage of the American people is falsely comforted by a substitute for justice that is no justice at all.

Not only has this injustice upon Americans been perpetuated, but it is an outrage in and of itself. No man should have the power to make America any less than its true greatness. Yet this bluff answer, this contemptible inability to distinguish between having a weapon and not having a weapon as a justification for going to war has diminished the grand tradition of what it means to be an American. The good guys don't shoot first. They certainly don't make up tall tales about people to justify shooting them down in cold blood, and then try to pretend it doesn't make a difference that those they shot never had a weapon at all. The very ease of American victory on the Tigris and Euphrates is a mocking taunt and rebuke that Iraq never posed a real threat to America at all. The very might with which we smashed that nation whispered testimony to the cowardice of the men who led us against not our real enemies, but against scape-goats in order to placate a people troubled by a true crime.

It is easy to talk big, and to shout down questions while sniggering about claims of secret and immaculate revealed knowledge. It is hard in the light of day to stand up for what one has done, to justify one's self without neglecting responsibility, and it is hard to wait for the bad guys to pull steel first. It is however what makes not only a cowboy a cowboy, but an American an American and more than that a man a real man. If GW Bush wants to be a cowboy, he's got a long way to go before he can walk that talk. That's the difference.