Saturday, April 30, 2011

Conservatives, Katrina and Alabama

I was listening to All Things Considered and heard parts of a story from Alabama.  Here is the summary:
The death toll from this week's tornadoes has topped 340 — and 28 of them came from one small Alabama town. Very little of Rainsville, population 5,000, remains. And yet, survivors continue the difficult task of picking up the pieces. One family, the Hamiltons, struggles to figure out what to do next.
It was heart-wrenching hearing about how they lost everything.  The lady said they needed a trailer or RV sent down to live in while they rebuilt, because they couldn't stay with friends forever.  That reminded me of this email, which my boss received from one of our wingnuttier clients a few years ago.  It claims North Dakota had a major blizzard and the people there didn't need government money or assistance like the folks from New Orleans.  According to, this email has circulated around a number of times, with Muskegon, Michigan, Cedar Rapids, Iowa and Colorado as the supposed site of the disaster.  Of course they are places with primarily white populations, unlike New Orleans.  Also, in all the cases except for Cedar Rapids, the people's homes weren't destroyed. Also, Snopes (that damn liberal site, the same client sent us an email saying Snopes was liberal, and couldn't be trusted because they used FACTS) pointed out that the National Guard was called out to deal with the blizzard in North Dakota.  I am curious if the same racists who circulated this email will reconsider, now that a large number of white folks are now homeless and in need of help.  I doubt it.

Of course, a tornado is much different than a major flood/hurricane, as private homeowner's insurance covers tornados, but government-subsidized insurance covers floods. Regardless, white bigot conservatives will most likely continue to insinuate that white people don't need government help, but useless, lazy blacks are the only people who benefit from government spending. I do not agree with any of those descriptions above, I am just trying to summarize what I hear when conservatives talk about government.

Scary Chart and the Endgame

John Mauldin over at the Big Picture:
I have written repeatedly about the Endgame in the weekly letter, as well as in a New York Times best-seller on the same topic. By Endgame I mean the period of time in which many of the developed economies of the world will either willingly deleverage or be forced to do so. This age of deleveraging will produce a fundamentally different economic environment, which the McKinsey study referenced below suggests will last anywhere from 4-6 years. Now, whether this deleveraging is orderly, as now appears to be the case in Britain, or more resembles what I have long predicted will be a violent default in Greece, it will create a profoundly different economic world from the one we have lived in for 60 years. This makes sense, in that the prior world was defined by ever-increasing amounts of leverage. Outright reductions in leverage or even a significant slowing of the rate of growth is a whole new ballgame, economically speaking.
In all this I have explained the various options facing the developed world, but I have refrained from putting forth my own estimates as to what will actually happen and what the environment surrounding that outcome will be. That is about to change. I have been giving this a great deal of thought and research. While my conclusions will be somewhat controversial (I know, surprise, surprise), with enough to offend almost everyone on some point, I hope that I can muster enough clarity to help you think through your own personal views and how you will respond to what I think will be yet another crisis on the not-too-distant horizon. Whether that is Crisis Lite or Crisis Depression is up to us and the politicians we elect. I argue that we need to choose most wisely, because we are at a crossroads that is as critical as any since 1940.

Naked Capitalism Link of the Day

Two today, both ag related: First, Pigs have 'evolved to love mud', at BBC:
That analysis has led Dr Bracke to propose that mud wallowing, like rolling, could play a role in reproduction in pigs.
But more fundamentally, Dr Bracke suggests the behaviour could have evolved in pigs' most ancient relatives.
"We all evolved from fish, so it could be that this motivation to be in water could be something that was preserved in animals that are able to do so."
For many animals, this would be too dangerous, because watering holes are ideal places for predators to ambush their prey.
"But pigs, like many carnivores, are relatively large animals with enlarged canine teeth, so they would be better able to fend off an attack."
So rather than pigs needing to cool down in mud because they do not have [functional] sweat glands, Dr Bracke thinks that they "did not evolve functional sweat glands like other ungulates because they liked wallowing so much".
Second, Why Is Damning New Evidence About Monsanto's Most Widely Used Herbicide Being Silenced, at Alternet.  If Don Huber at Purdue is correct about Roundup, we've got a serious problem on our hands:
But Huber says this is not true. First of all, he points out, evidence began to emerge in the 1980s that "what glyphosate does is, essentially, give a plant AIDS." Just like AIDS, which cripples a human's immune system, glyphosate makes plants unable to mount a defense against pathogens in the soil. Without its defense mechanisms functioning, the plants succumb to pathogens in the soil and die. Furthermore, glyphosate has an impact on microorganisms in the soil, helping some and hurting others. This is potentially problematic for farmers, as the last thing one would want is a buildup of pathogens in the soil where they grow crops.
The fate of glyphosate in the environment is also not as benign as once thought. It's true that glyphosate either binds to soil or is broken down quickly by microbes. Glyphosate binds to any positively charged ion in the soil, with the consequence of making many nutrients (such as iron and manganese) less available to plants. Also, glyphosate stays in the soil bound to particles for a long time and can be released later by normal agricultural practices like phosphorus fertilization. "It's not uncommon to find one to three pounds of glyphosate per acre in agricultural soils in the Midwest," says Huber, noting that this represents one to three times the typical amount of glyphosate applied to a field in a year.
Huber says these facts about glyphosate are very well known scientifically but rarely cited. When asked why, he replied that it would be harder for a company to get glyphosate approved for widespread use if it were known that the product could increase the severity of diseases on normal crop plants as well as the weeds it was intended to kill. Here in the U.S., many academic journals are not even interested in publishing studies that suggest this about glyphosate; a large number of the studies Huber cites were published in the European Journal of Agronomy.
If Huber's claims are true, then it follows that there must be problems with disease in crops where glyphosate is used. Huber's second letter verifies this, saying, "we are experiencing a large number of problems in production agriculture in the U.S. that appear to be intensified and sometimes directly related to genetically engineered (GMO) crops, and/or the products they were engineered to tolerate -- especially those related to glyphosate (the active chemical in Roundup® herbicide and generic versions of this herbicide)."
He continues, saying, "We have witnessed a deterioration in the plant health of corn, soybean, wheat and other crops recently with unexplained epidemics of sudden death syndrome of soybean (SDS), Goss' wilt of corn, and take-all of small grain crops the last two years. At the same time, there has been an increasing frequency of previously unexplained animal (cattle, pig, horse, poultry) infertility and [miscarriages]. These situations are threatening the economic viability of both crop and animal producers."
Some of the crops Huber named, corn and soy, are genetically engineered to survive being sprayed with glyphosate. Others, like wheat and barley, are not. In those cases, a farmer would apply glyphosate to kill weeds about a week before planting his or her crop, but would not spray the crop itself. In the case of corn, as Huber points out, most corn varieties in the U.S. are bred using conventional breeding techniques to resist the disease Goss' wilt. However, recent preliminary research showed that when GE corn is sprayed with glyphosate, the corn becomes susceptible to Goss' wilt. Huber says in his letter that "This disease was commonly observed in many Midwestern U.S. fields planted to [Roundup Ready] corn in 2009 and 2010, while adjacent non-GMO corn had very light to no infections." In 2010, Goss' wilt was a "major contributor" to an estimated one billion bushels of corn lost in the U.S. "in spite of generally good harvest conditions," says Huber.
The subject of Huber's initial letter is a newly identified organism that appears to be the cause of infertility and miscarriages in animals. Scientists have a process to verify whether an organism is the cause of a disease: they isolate the organism, culture it, and reintroduce it to the animal to verify that it reproduces the symptoms of the disease, and then re-isolate the organism from the animal's tissue. This has already been completed for the organism in question. The organism appears in high concentrations in Roundup Ready crops. However, more research is needed to understand what this organism is and what its relationship is to glyphosate and/or Roundup Ready crops.

City Council Befuddled By Request to Rename Street for Negro

First off, my use of Negro is in no way intended to be insulting or offensive to African-Americans.  It is expressly intended to be insulting to the members of the Troy, Ohio City Council.  Council rejected adding a secondary name to a street in Troy to honor early Troy civil rights activist Lucille Wheat.  Here is the story:

A city council committee on Thursday unanimously declined to recommend council authorize adding a secondary name for Elm Street. The action effectively rejects a request by Wheat's son, Sidney Wheat, to rename the 2-1/2 block section of South Elm Street between West Main Street and McKaig Road for his mother.

Lucille Wheat is recognized as a key civil rights figure in Troy during the 1950s through the early 1980s. She founded and chaired the Troy Community Action Committee, headed the Troy NAACP in 1966 and co-authored with Lois Davies a seminal book on race relations Troy title, "Some Self-Evident Truths."

Sidney Wheat made the request in January to Troy mayor Michael L. Beamish, saying it was a way to recognize Lucille Wheat for her efforts. The Wheat's family home was located on South Elm Street, near the corner of West Main Street.

In early February, Beamish made an alternate suggestion: adding an secondary name in honor of Dr. Martin Luther King Jr. to the entire stretch of Elm Street from McKaig Road to the northern city limits. The Buildings, Streets and Sidewalks Committee agreed and made a positive recommendation on Beamish's alternate suggestion.

But in the face of questions from Wheat and others, the item was pulled from the Feb. 7 council agenda and sent back to committee, where it has languished until Thursday. Committee chairman Jarrod Harrah blamed scheduling conflicts for the three-month delay in bringing the item back to committee.

Thursday, Harrah and fellow committee members Bobby Phillips and Tom Kendall said they could not back naming South Elm Street for either King or Wheat.

Harrah said streets are usually reserved for persons of note and also said developers of residential areas name the streets. He also suggested renaming a street was insufficient to honor Wheat and that a plaque, perhaps on the commercial building that now occupies the site of the former Wheat home, should be added instead.

"I just don't think a street does her justice," Harrah said.

Phillips noted that Wheat has already been enshrined in the Troy Hall of Fame (in 1984). "I question how many awards a person should have," he said.

Kendall said he has "never been a big proponent of renaming streets," at least partly because it could potentially open the city up to receiving a flood of similar requests.

"At this point, I think we should leave it as it is," Kendall said.

Wheat, 73, a life-long Troy resident, appeared at the meeting with his wife and expressed disappointment in the committee's position.

I have to agree with Mr. Wheat's quote at the end of the story:
"I had hoped for a better outcome, and more sincerity, than I'm hearing," Wheat said
I was not familiar with Ms. Wheat's work in Troy prior to this newspaper article.  I will look for her book at the library when I get a chance.  Apparently, she rubbed some people in Troy the wrong way.  I find it entertaining that instead of honoring a local person, the mayor suggested naming a street after Martin Luther King.  It is also entertaining that they took two months to review and rewrite the city's street naming policy, but they failed to come up with any worthwhile excuses for why they would reject the street renaming request.  This wasn't a case where the street name would change and force people to change their address, it was for adding a secondary sign with Ms. Wheat's name on it.  In neighboring Tipp City, they added a secondary sign to honor George W. Bush because his bus went down the street on the way to giving a political speech at an invitation-only event at the high school.

The changes in the street renaming policy:
After a line-by-line review of the new policy, which included several new sections, the committee made several minor changes.

New to the policy is a section saying that consideration for renaming will not be given to anyone who has already been recognized with an honor or award. Another addition to the policy states that individuals or groups requesting the renaming "shall bear all renaming costs."

Both of those issues were cited by committee members Thursday as factors in rejecting Wheat's request.

I tell you what, if the city is concerned about the cost of the signs, I will pay for them.

It is notable that the portion of street for which the secondary name was requested is in the historically black portion of Troy.  South Elm Street and North Elm Street were referred to as Slabtown and Hollywood.  I don't remember which portion was which, I only remember being told those were the names by my grandparents.  Anyway, I thought a city council in a city which has historical markers seemingly every 20 feet in honor of Clayton Bruckner and the WACO Aircraft Company would be interested in honoring a local civil rights activist.  I would assume that Clayton Bruckner didn't make certain white folks uncomfortable about their latent racism when he was alive.

In a side note, WACO went out of business in 1947, but the city is proud of their association with the company.  The company made some very neat aircraft in the 20's and 30's prior to making the "flying coffin" gliders used in airborne operations in WWII in Sicily, in Normandy and in Operation Market Garden.  As a veteran of the Airborne in World War II told me, "We lost a lot of good boys in those gliders."  He had no fond memories of the gliders.

Update:  I would also like to propose renaming Dye Mill Road in the vicinity of the city wastewater treatment plant after the Mayor and Council.  That area generally smells the same as this Council decision.  I will also pay for those signs.

Friday, April 29, 2011

Ready for the Weekend

I think this song summarizes my mood, and it was also my grandma's favorite song toward the end of her life.

Cutting Government Spending, Stupidly

From Stuart Staniford, via Gregor, cuts to the Energy Information Administration:

Here is the press release announcing the amount of savings:
Immediate Reductions in EIA's Energy Data and Analysis Programs Necessitated by FY 2011 Funding Cut

WASHINGTON, DC - The final fiscal year (FY) 2011 budget provides $95.4 million for the U.S. Energy Information Administration (EIA), a reduction of $15.2 million, or 14 percent, from the FY 2010 level.
"The lower FY 2011 funding level will require significant cuts in EIA's data, analysis, and forecasting activities," said EIA Administrator Richard Newell. "EIA had already taken a number of decisive steps in recent years to streamline operations and enhance overall efficiency, and we will continue to do so in order to minimize the impact of these cuts at a time when both policymaker and public interest in energy issues is high," he said.
EIA must act quickly to realize the necessary spending reductions during the present fiscal year, which is already more than half over. The changes in products and services identified below reflect initial steps to reduce the cost of EIA's program. Additional actions are being evaluated and may result in further adjustments to EIA's data and analysis activities in the near future.
Cutting statistical data for energy production in the U.S. and worldwide to save $15.2 million dollars?  That is absolutely stupid.  That works out to a nickel per person in the United States.  Maybe that wouldn't be an issue if we don't face very serious energy problems, but how about scraping around between the cushions of our couches and seeing if we can find a quarter or two.  But I'm sure that idiot blowhards like Rush Limbaugh don't think the government should know what the hell is going on in the world.  Rush and his ilk are enemies of humanity.

The Lowest Payroll in Baseball

Joe Posnanski on the Kansas City Royals:
And then there's the most startling one of all -- the folks are Royals Authority did a post with the rather frank headline: "Kyle Davies Is Historically Awful." It seems a harsh judgment for a nice guy like Kyle. but it's also pretty much indisputable. I like their numbers, but I'll try to do it even more simply:

Highest ERAs in baseball history with 125-plus starts:
1. Kyle Davies, 5.59
2. Jimmy Haynes, 5.37
3. Kevin Ritz, 5.35
4. Scott Elarton, 5.29
5. Jose Lima, 5.26

Three Royals on that list. Hmm. Anyway ...

At 125 starts, Davies has the fifth-highest WHIP ever -- and he comes by it honestly. His 4.29 walks per nine innings is absurdly high. His 10.21 hits per nine is, historically, even worse. His 78 ERA+ -- which adjusts ERA by era -- is the third worst ever behind Phil Ortega and Wade Blassingame. He has the sixth-lowest WAR. He is one of only 19 pitchers to start at least 125 games without throwing a single shutout. Over his entire career, major league hitters are hitting .286/.364/.461 which means he basically turns every hitter in the game into Ron Santo.

Here's my favorite one: Davies has a 32.8% quality start percentage -- meaning he throws a quality start fewer than one out of three times. That is the lowest percentage since 1950, which is how far back Baseball Reference figures the stat. No starter in the last 60 years has been LESS likely to throw you at least six innings and give up three or fewer runs.
That is just brutal.

Was the Civil War a Tragedy?

TNC and J.L Wall are discussing the Civil War.  TNC makes the case that the war is not a tragedy because it ended slavery.  Wall reflects on Shelby Foote's trilogy:
And yet, I read Foote’s history and find, with his narrator, tragedy.  This is not the tragedy of an avoidable war; recall that, for Foote’s narrator, the war’s opening is not tragic but exhilarating.  The narrator is more interested (on the surface, at least) in the military narrative of the war than in its causes, results, or the question of moral justification, so it is an exhilaration borne of generalship and a sense of the heroic more than from history’s greater narrative propelling the nation toward the end of slavery.  Though that last, too, is present, if in such a way that becomes more apparent as the Narrative progresses.
By the end of Gettysburg, as I have mentioned, exhilaration has given way to frustration, disgust, and tragedy.  Rather than a misguided quest for glory, Jeb Stuart’s meandering during the first days of that battle are depicted as a lost child’s desperate search for his father.  The scales begin to fall and the South’s “great” men are revealed to be self-serving (Bragg; the Hills; Hood; Stuart; etc.), blindered (Lee), or brutalizers of questionable sanity (Forrest; Quantrill).  Longstreet, perhaps, has a measure of redemption in him—but while he, shaking his head at Gettysburg, is the only one who can see the reality of their military efforts, he is merely resigned by honor of some sort to stick around for the ride.  Davis is compared from the outset to Lucifer; the image reappears near the end of Volume II as the Rebellion itself, for a moment, takes on the trappings of that angel’s against God.
The comparison is introduced through a letter written by William Tecumseh Sherman, himself a brutal warrior once relieved of duty on account of questionable sanity.  Yet he comes in (so far, at least; his march to the sea is not for some hundreds of pages) for less condemnation than his colleagues on the Southern side.  The reason is tied to the type of tragedy the narrator sees in the war at this point—and, I think, to the kind most who read of it sense: not that it had to be fought at all, but that it continues without an end at hand while terrain, technology, and the incompetence and “honor”* of the so-called great-men lead to increasing casualty rolls.  Sherman’s goal, clearly stated, is a faster end to the war; the narrator knows he will help to bring it.
I would agree with TNC that in spite of the war's costs, the benefit of ridding a nation, which was supposedly founded on freedom, of slavery, was well worth the cost.  There is definitely much tragedy to be found in this war, and its aftereffects today.  But a nation without slavery is worth it.

I think Wall's analysis of the narrative arc of the trilogy is quite interesting. Nothing bothers me more than talking to Southern partisans today, and hearing them defend the Confederacy's actions throughout the war.  It really galls me when they say that slavery was not the root cause of the war.  They don't seem to be able to appreciate the tragedy Wall is identifying in Foote's trilogy.  It makes arguing with a Republican about politics seem easy.  Of course, often when arguing with a Confederate apologist, you are arguing with a Republican.  The paradox that the party of Lincoln is now the party of the Confederacy is one of history's great ironies.  Read both TNC and Wall's posts, they are excellent.

Consolidating Schools

Dana Goldstein gets to one of the key points as to why people fight tooth-and-nail against school consolidation (h/t The Dish):
Currently, New York State has some of the most regressive school districting in the country. Due to a system that has changed very little since the early 19th century, there are 697 school districts in New York. 
In Florida, the state closest to New York in terms of population, there are just 74 school districts.
Politically, consolidating school districts is very controversial, even though larger school systems are often able to offer more course options and other perks. In large part, this is because consolidation is a full frontal attack on white privilege and class privilege. Currently, the ability to pay Katonah property prices and taxes earns a family the right to prevent their children from attending school with the children of Mt. Kisco's Guatemalan day-laborers. Some people move to Katonah instead of to Mt. Kisco for exactly that reason.
To be sure, neighborhood school zoning can lead to de facto segregated schools even within districts that encompass entire counties. But there are many good examples of progressive large school distrcits. Montogomery County, MD has made great strides in educating both affluent and low-income children in part because of the community's and administration's conviction that this should be a shared responsibility. 
The other thing which goes unaddressed is that people assume that because suburban school kids test well, the reason is because the schools are good, as opposed to the concept that the cost-of-living might just segregate out students who would struggle with the tests.  Just because test scores overall might be lower, the kids scoring high on the tests would still get just as good of an education, but parents are uncomfortable with the concept.  It is a strange concept to think that Florida only has 74 school districts in the state, while my county (out of 88) has 9 school districts in it.

Naked Capitalism Link of the Day

Today's link: Boom and bust signals ecosystem collapse, at BBC:
The Peter Lake food web contained four key components. Insects such as fleas ate tiny water-borne plants, small fish such as golden shiners ate the fleas, and much bigger largemouth bass ate the little fish.
Beginning in 2008, the researchers began to add more bass, and more than a thousand hatched the following year.
Sensing the threat from these predators, the golden shiners began to spend more time in the shallows or sheltering under floating logs.
Larger fleas moved in, eating the floating plants (phytoplankton).
But the changes were anything but smooth, with wildly varying numbers of fleas and phytoplankton seen at different times.
Eventually, by late 2010, the ecosystem appeared to have finalised its transition from one stable state to another.
This second state, dominated by fleas and largemouth bass, is similar to the situation that had existed for years in neighbouring Lake Paul.
This lake showed no major changes during the three years, indicating that the changes seen in Peter really were caused by the addition of bass.
I would guess that most people in western Ohio understand that large population increases of blue-green algae in Grand Lake St. Mary's signals an ecosystem collapse.  Some just don't want to believe why that is occurring.

Why Do Christian Conservatives Like Ayn Rand

In his review of the box office failure of Atlas Shrugged, Mark Howard asks the same question (h/t naked capitalism):
The affinity for Ayn Rand by the Tea Party has always been a bit of a mystery. Sure, there is a shared hostility for government, particularly when it endeavors to fulfill its Constitutional obligation to provide for the general welfare. Both Rand and the TP’s despise efforts to aid society’s less fortunate, whom they believe deserve to suffer. But how do predominantly Christian, patriot, Tea Partyers justify their idolization of an anti-American, atheist who regards compassion as evil and selfishness as the pinnacle of human values?
Ironically, a key theme of the book and the film is the rejection of society by the wealthy business class who mysteriously disappear. There is a correlation to that plot point in contemporary America as we have already witnessed the disappearance of business luminaries like Bernie Madoff, Ken Lay, Jack Abramoff, Dennis Kozlowski, Bernard Ebbers, and John Rigas, to name a few. It doesn’t appear that society has suffered from their absence. Yet there is another industrial titan who not only hasn’t vanished, he is masquerading across the airwaves as a presidential candidate. I’m not sure Ayn Rand would approve of this, however, the popularity of Donald Trump at Tea Parties is perfectly understandable. He is the ultimate manifestation of Randian politics: a greedy, conceited, selfish bully. But for every Tea Party supporter there are probably twenty other Americans who wish that Trump would “go Galt.”
It would be nice if the Tea Party were to go Galt.  Unfortunately, they wouldn't be able to cut it on their own, they depend way too much on government support.

Why Leaders Can't See Disaster Coming

Via Ritholtz, Paul Farrell's 7 reasons why leaders can't see the next catastrophe:
Farrell enumerates seven reasons this always has, and is likely again, to lead to more trouble. He advises you to not forget any of the following elements:
1. Many, many experts did predict and warn of the 2008 meltdown years in advance.
2. Wall Street banks, corporate executives and Washington politicians are short-term decision-makers.
3. Most business, banking and financial leaders are short-term thinkers, focused on today’s trades, quarterly earnings and annual bonuses. Long-term historical thinking is a low priority.
4. As a result, it is virtually certain that America’s leaders will focus on upbeat, good news and always miss the next meltdown because warnings of a coming catastrophe are ignored.
5. Warnings from the few with a long-term perspective will always be dismissed during every investment cycle and every future recession/recovery cycle. Always. It’s in their DNA, trapped in their brain cells and demanded by their followers.
6. If you are a typical left-brain Wall Street or corporate executive, it’s virtually certain that you will miscalculate the timing/impact of the next meltdown, the next big collapse that’s off your radar. As a result, your company’s assets are at risk of suffering massive losses that are “predictable, not random.” But because you’re in denial, you will not deem it necessary to take steps to protect your assets.
7. If you’re a right-brain thinker, your longer-term historical perspective will give you a clear advantage in preparing for the next crash and the depression that follows.
File this away, and look back at it in a few years — I like to do that with Outlook or Yahoo Calendars, and get a pop message. This one is scheduled for 2014 . . .
I get the feeling something bad may happen before 2014.  I guess we'll wait and see.

Thursday, April 28, 2011

Ohio Taxpayers Subsidize Business Investment More than 48 Other States

From the Dayton Daily News:
Only two states - Maine and Oregon - have lower tax burdens for new business investments than Ohio, according to a new study released by the Council on State Taxation, a business-backed group, in conjunction with Ernst & Young, the professional services firm.
“Competitiveness of State and Local Taxes on New Investment” found that Ohio has an effective tax rate of 4.4 percent on new investment, lower than all states and the District of Columbia, except Oregon, with a 3.8 percent rate, and Maine, with a 3.0 percent rate, the lowest nationally.
The findings contrast with some other studies such as those done by the Tax Foundation, which has issued negative findings about Ohio’s business tax climate. The Tax Foundation in a report last year - 2011 State Business Tax Climate Index - rated Ohio 46th nationally in terms of a favorable tax climate.
The new study, released Tuesday, focuses on capital investments in industries that have location choices for factories and headquarters, not on investments tied to specific locations such as hotels and restaurants.
We're winning the race to the bottom.  Excuse me, big business is winning at our expense.

Ernie Harwell Play Debuts Tonight

Mitch Albom's play opens in Detroit:
Ernie Harwell's life and legacy is about to take the stage. Mitch Albom wrote "Ernie" as a love letter he hopes does justice to the late Detroit Tigers broadcaster.
"I just hope people like it," said the Detroit Free Press columnist, best-selling author, WJR radio host and playwright.
The 90-minute play will make its premiere Thursday night at the City Theatre, a block from the home of the Tigers. Albom said the production he is funding is employing about a dozen people from Michigan.
Will Young, a 71-year-old Milford resident, stars as Harwell in the two-person play with 24-year-old St. Clair Shores native TJ Corbett.
I always liked tuning in to listen to Ernie Harwell on WJR when the Reds weren't playing.  Being involved in firing Ernie Harwell was the dumbest thing Bo Schembechler ever did.

White-Nose Syndrome May Cost Ohio Farmers

Columbus Dispatch:
A deadly disease to bats could become a major financial headache for agriculture, costing Ohio farmers as much as $1.7 billion a year.
A new study is the first to tie a dollar value to the millions of crop-damaging insects that bats routinely devour each year. Now, the night-flying hunters face the threat of a fungal disease that kills most of the bats it infects.
White-nose syndrome, named for the fungus that spreads over bats while they hibernate, has killed at least 1 million bats in 15 states and Canada since it was discovered in New York in 2006.
On March 30, Ohio officials announced that they found the disease among bats hibernating in an abandoned limestone mine in the Wayne National Forest. They fear it will march through Ohio as it has nearly everywhere else.

Not only might the bats not be around to eat bugs, but Fish and Wildlife could put more restrictions on cutting trees during the Indiana Bat mating season or nesting season, or whatever it is.  It is rather spooky how effective the white-nose syndrome is in killing bats.

Kasich Goes Off Again, This Time At Obama

Governor Kasich blew off at President Obama for criticizing the Governor's assault on public-sector unions:
President Obama told Cleveland TV Station WKYC he disapproves of new laws restricting public employee unions in Ohio and Wisconsin. The president said states should not use the financial crisis as an excuse to erode bargaining rights. Governor Kasich responded this way:
Kasich:  “The President of the United States has I think...a 13 trillion dollar debt. Why doesn’t he do his job? When he does his job and gets our budget balanced and starts to prepare a future for our children, then maybe he can have an opinion about what’s going on in Ohio.”
Ohio Democratic Party Chief Chris Redfern said Kasich needs to remember it was Republicans who were in charge when wall street fell. Here’s what Redfern said when he was asked whether he thought Kasich was trying to set himself up for a presidential run of his own.
Redfern:  “Well, I can only hope for a Donald Trump, John Kasich ticket. One fellow has already clearly lost it and the other is on his way to losing it”
I wish I could get the audio to work, because you have to hear it to appreciate how big of a dick Kasich sounds like.  Personally, the last time I checked, the President is allowed to say what he thinks under the First Amendment of the U.S. Constitution, even if said speech criticizes John Kasich.  Also, I think the President is well-aware of the debt issue.  Mr. Kasich might want to know that the debt is currently $14.3 trillion, of which $10.6 trillion was on the books before Obama got there.  But then again, John Kasich doesn't seem to care about facts.  Also, Governor Kasich, where were you during the Bush administration with your campaign for a federal balanced budget.  I think that is a brilliant way to tank the economy when consumers and businesses are currently net savers.  If I were the president, I would also mention that tax cuts for wealthy people and spending cuts for state and local governments are bad for the future, but I'm not the president, and thank God I'm not John Kasich. 

New Democrats Make a Move Up North

From, the latest polls show the New Democrats making significant gains in Monday's election:

I think multiple parties in the U.S. could make things more interesting, and maybe tamp down the influence of the crazy Republican base.  We might end up with a strong Southern secessionist party, much like the Bloc Quebecois.  I would guess that the current Democratic party would split into more of a Labor and New Democratic makeup like up north. The question would be whether many moderate Republicans would go to the centrists and away from the nutty right.  It is at least an interesting thought-exercise.

Was President Bush Curious?

Daniel Larison:
But I think people caricatured the president, and the only thing that I couldn’t understand is why this man with such a curious mind, who in briefings always asked the question you wish you thought of, why that quality didn’t come across. And I fully admit that it didn’t come across. ~Condoleeza Rice
I suppose it’s possible that George W. Bush could have had “such a curious mind” and still made all the terrible decisions that he did, but one of the reasons that he received a reputation for being incurious is that he overlooked such obvious, glaring flaws in his administration’s policies that someone with “such a curious mind” should have noticed. He wasn’t very good at demonstrating that he knew or cared to know very much about things. If Bush were as curious as Rice claims, he did an amazing job of hiding it.
I would have to side with Daneil.  Bush didn't strike me as a person who wanted to hear what the other side of the issue was, and consider whether his opinion might not be correct.  He seemed to me to consider rather who the person holding the other opinion was, and if it was somebody he already didn't care for, he'd dismiss it out of hand.  His circle of advisors gave him his information, and nobody else could break through that.  We only got decent policy discussions when his advisors didn't agree, and he had to choose between them.  Sometimes he chose well, (Rice versus Cheney and Rumsfeld in his second term) and sometimes poorly (Cheney and Rumsfeld versus Powell on troop levels to invade Iraq).  I guess at times I can dismiss an argument out of hand, but I try to read opposing views on occasion.  For instance, I want to read Amity Shlaes' The Forgotten Man, to take a look at her attack on the success of the New Deal, but I don't really want her to benefit, so I'll probably get it at the library.  I flipped through it at the library the other day, but I just couldn't put that money in her pocket.  I mad that mistake with Larry Schweikart's A Patriot's History of the United States, and I won't make that mistake again.

Naked Capitalism Link of the Day

Today's link: Inflation expectations my butt, at MacroBusiness:
But today’s inflation is not in labour or household items. It is in financial assets. Excess liquidity these days doesn’t suddenly appear in product prices and wage claims. It appears in securities markets and, until the irresistible warning of the GFC, housing markets.
In other words, inflation expectations are now operative in capital not labour markets.
I know some will argue that the FOMC watches Treasury markets for inflation expectations in capital. But how reliable is that when the market is dominated by the purchases of foreign governments whose goals are national interest not market related, as well as the FOMC itself? Members of the FOMC have themselves acknowledged the uselessnes of the measure.
The inflation of capital is important because it is one half of the new boom and bust growth cycle that has taken over the global economy (the flip side being the real and perceived shortages in various hard assets, that is, commodities).
If you want to get a gauge of future inflation, you need to be surveying the expectations of capital market traders, not labour market consumers. And if you did your survey after today’s FOMC meeting, expectations would be very high indeed.
In some ways, I think for the Fed that this is a feature, not a bug.  It seems to be the ultimate in trickle-down strategies, feed the stock markets and utilize that wealth effect to grow the economy.  That seemed to be the strategy in the '90's with the tech stock boom and after it popped in the real estate boom in the 'oughts.  Both ended in tears, and I'm afraid all this will too.  I can't decide if the Fed is hoping for inflation to ease the debt problems both in the private and public sectors, or what they want to do to address that.  I don't think causing bubbles to engage the wealth effect works in the long-run, and the potential of peak oil and possible food shortages causing price spikes in an already struggling economy is very disconcerting.  Regardless, we'll have some answers in the not too distant future.

QE2 and Commodities

Marshall Auerback on QE2, via Yves Smith:
Those who point to the success of QE2 make the following observations: In the US, growth accelerated after the implementation of QE2 from a 1.7% annualized pace in the second quarter to 2.6% in the third quarter and 3.1% in the fourth quarter. Inflation expectations ceased falling and began rising back to normal levels. Confidence rose. And the pace of hiring improved meaningfully. In both February and March, private firms added over 200,000 jobs. Since the Fed’s policy began, the unemployment rate has fallen a full percentage point.
But just because a rooster crows first thing in the morning doesn’t prove that this is what causes the sun to rise. These are two separate occurrences with no underlying causation. The very deficits now decried so loudly by the deficit hawks and ratings agencies are likely what engendered recovery, not QE2.
So what has QE2 actually achieved? Little in the way of positive impact, but much in terms of its deleterious impact by fomenting additional speculative activity, notably in the commodities complex — gas and food prices. Obviously, with other determinants of aggregate demand in question, commodity prices and the gasoline price in particular now matter. The price of gasoline is almost as high as it was at its brief peak in May-July 2008. In the past, increases in expenditures on gasoline could be managed by consumers because they had access to credit. That is certainly less true today. Rising fuel prices could tip the economy towards greater weakness. As it now stands, the U.S. economy has been growing around trend (2.7%) and the first quarter was probably below that. Tipping the economy towards weakness would bring growth way below the current optimistic above trend consensus.
Though it cannot be proved, in the minds of many the current wave of speculative and investment demands is tied to the Fed’s emergency measures of ZIRP and QE. Within the Fed itself, a number of inflation hawks have reflected this belief, notably Dallas Fed President Richard Fisher and former Kansas President Tom Hoenig. If so, this inadvertent adverse consequence of QE means that the Fed might be hoisted on its own petard.
QE2 is certainly part of the commodities run-up, but I'm afraid some real supply and demand issues are also involved, and if so, that indicates some serious problems down the road, especially when it comes to our addiction to oil and it's corollary, using food for fuel.  I also think he's right in saying the real problem is that society is too laden down with debt to take on new loans to expand businesses.  We're in a trap of our own making.

Charity Combined With Carbon Credits for Profit

This also via Ritholtz:
Swiss-based Vestergaard Frandsen--makers of mosquito nets and the LifeStraw--has figured out a solution to turning a profit while saving the world.
The company is launching a campaign today that could change the plight of water-borne illnesses in Kenya, while making the company a tidy sum of money. Over the next five weeks, 4,000 temporary employees will distribute the company's LifeStraw water filters to 900,000 households in Western Province--nearly 90% of the entire population--providing 4 million people with clean, safe drinking water. The filters will be provided to the end users for free, and company founder and CEO Mikkel Vestergaard Frandsen has invested $30 million of his own money into the project. But he's not worried about losing out--because for each LifeStraw he donates, he's going to be making money.
The campaign is called Carbon for Water. Kenyans boil their water to eliminate waterborne diseases, using wood fires. Those fires generate a large amount of carbon, and eliminating the need to boil water means fewer emissions from Kenya. Because they're providing the means to reduce emissions, Vestergaard Frandsen earns carbon credits for each LifeStraw donated. He will then turn around and sell those credits to companies in countries that have carbon caps and exchanges. "We are using international agreements about climate change to finance the mitigation of CO2 in the least developed countries," he says.

A Summary of Gold Bugs

At Marketwatch, via Ritholtz:
We’ve been out-Chinese-ed, out-German-ed and India-ed. Those economies are the envy of the world. Chinese banks haven’t made any bad loans and it’s a Shanghai-La as long as you can live on $6,000 a year and aren’t one of the billions of people who can’t speak or move about freely. And talk about opportunity: Who wouldn’t want their 10-year-olds working in a factory stripping copper from old computer monitors? Everyone works.
And how about the Germans. Germany’s export boom will go on infinitely even as the euro rises. The Germans are so rich, they’re bailing out the rest of Europe even though their own debt-to-GDP is 79%.
India is the best place in the world to do business, except for the overcrowding, corruption, dependence on agriculture, and the fact that 25% of its people are below the poverty line. India is running double-digit inflation and has a infant-mortality rate higher than Zimbabwe, Mongolia, North Korea and Namibia. Sad, but it means more farm jobs for the living.
Buy gold.
It’s the only thing that will be valuable when the New World Order shows itself. Right now, the Illuminati, Trilateral Commission and the Freemasons are planning for the end and they won’t be satisfied until they have world. domination or a better public relations firm.
Buy gold.
Because you’re a patriot. Gold hires people. It takes a chance on an idea. It believes that, for all of our politicians and corporate missteps, we have a dynamic country that can compete with anyone. Gold makes a statement. It says “I think the American people work as hard and are as resourceful as anyone on the planet,” and then adds “but for now, I’m just going to hide out in this bunker and eat Spam until someone else has the guts to create a new business with a great idea and gives me a job.”
Gold looks good and does nothing. And isn’t that how it should be? Look at all these people trying to “do” something: putting out fires, doing our taxes, teaching our kids, giving us check-ups, taking care of our elderly, serving us our meals, reporting the news, constructing casinos, delivering our packages, building our roads, making solar panels — what a bunch of morons. They should be buying gold!
Those idiots will know who’s boss when the economy comes crashing down and we’re left in a total state of anarchy. You can imagine the scene: busted businesses, poverty everywhere, road signs in Chinese. They’ll be the ones working for yuan and euros to pay for their government homes and the rest of us will be standing on top laughing at them. We were the ones who saw it coming, loaded up on guns and Oreos, and put our money to good use. Look who’s laughing at our ruined society now. Ha! We were smart enough to heed the words.
Buy gold.
I have a little gold for two reasons.  One, I think shiny coins are cool, and two, gold bugs are crazy enough to bid it much higher than what I bought it at quite a few years ago.  Otherwise, it is pretty damn useless.  At $1500 an ounce, I need to find a bar that will accept 0.00067 ounces of gold to buy a dollar beer, then come up with more for a tip, if I don't want to pay for the transaction in dollars.  Also, the gold standard really makes it hard to grow the economy.

A Populism History Lesson

Joseph Thorndike, via Mark Thoma:
Tax avoidance is legal and tax evasion is not. Simple distinction, but not always relevant, at least not in politics. Consider the recent burst of outrage over corporate tax avoidance generally and General Electric's tax bill in particular. In some years, GE's tax schemes might have escaped public notice. But in other years -- especially hard ones -- they get plenty of attention. And it was ever thus.

Consider the lessons of 1933. Wall Street investigator Ferdinand Pecora hauled J.P. Morgan, Jr. before the Senate banking committee. Pecora had been charged with uncovering malfeasance on Wall Street, but he focused much of his attention on tax issues. In particular, he forced Morgan to acknowledge from the witness chair that he had paid no income taxes in 1931 and 1932.
Morgan provided a reasonable explanation: stock trading losses in the great market crash had wiped out his other sources of taxable income (such losses were fully deductible in those days). But the revelation still shocked the nation, and Morgan's explanation carried little weight with Pecora -- and pretty much none with the general public.

"The country, in 1933, was in no mood for nice distinctions between tax 'evasion' and tax 'avoidance,' " Pecora later recalled. "Approved by the existing tax authorities or not, the public could not see the justice or equity of financial giants paying nothing, while Tom, Dick, and Harry scraped the bottom of their modest purses to meet their tax obligations to the Government.” (Ferdinand Pecora, Wall Street under Oath; the Story of Our Modern Money Changers,1939).

The Pecora investigation sparked a powerful drive to clamp down on tax avoidance, producing (among other things), new limits on the deductibility of capital losses. More generally, it kicked off a decade of high-profile campaigns to boost effective tax rates on the rich, including a remarkably ambitious effort to revamp corporate income taxation from the ground up.
I think we could use some serious adjustments to the tax code, which would boost effective tax rates on the rich and revamp corporate income taxation from the ground up.  Too bad one party is too cowardly to pursue this, while the other is too stupid and bought and paid for.

Wednesday, April 27, 2011

Obama Releases Certificate of Live Birth

Maybe that will satisfy Luke Scott.  Anybody want to bet?  I love how these Republican morons say that a Certificate of Live Birth isn't an official Birth Certificate.  I'm not sure, but I think that's what mine says too.  I'll have to check, and I know I can't trust that my mother didn't actually give birth to me in Africa, so I'm possibly ineligible for the Presidency.  I'm sure all the people who have come across this blog are sorely disappointed with that news.

Update: I would probably be nearly as entertaining as Joe Biden, if I was eligible.

Further update: I too "only" have a certificate of live birth, so either there is no reliable proof that I or Barack Obama were born in this country, or it is further proof that there are some stupid people serving in state legislatures (I'm looking at you, Texas, at least on this issue).  I'll go with the latter.

How Reformulating Pyrex Made Crack Production More Difficult

From Popular Science:
When World Kitchen took over the Pyrex brand, it started making more products out of prestressed soda-lime glass instead of borosilicate. With pre-stressed, or tempered, glass, the surface is under compression from forces inside the glass. It is stronger than borosilicate glass, but when it’s heated, it still expands as much as ordinary glass does. It doesn’t shatter immediately, because the expansion first acts only to release some of the built-in stress. But only up to a point.
One unfortunate use of Pyrex is cooking crack cocaine, which involves a container of water undergoing a rapid temperature change when the drug is converted from powder form. That process creates more stress than soda-lime glass can withstand, so an entire underground industry was forced to switch from measuring cups purchased at Walmart to test tubes and beakers stolen from labs. Which just goes to show, if you think you know all the consequences of your decisions today, you’re probably wrong.
Did not know that.  It reminds me of the day I woke up in chemistry class, and the professor had written an equation on the overhead projector involving ether, and he was explaining how ether was used to purify cocaine.  He went on to explain that Richard Pryor caught himself on fire because he didn't wait long enough to let the ether evaporate away before he tried to free base.  That is one of the few things I remember from my college classroom experience.

Update: Technically, the reformulation made it easier to crack the Pyrex, at least when making crack cocaine.


The Sacred Cod

I missed this item yesterday, but on April 26, 1933, the Sacred Cod of the Massachusetts House of Representatives was stolen by members of the Harvard Lampoon:
On April 26, 1933, members of the Harvard Lampoon magazine stole the Sacred Cod as a practical joke in an event that came to be known as "The Cod-napping".
Three members of the Lampoon staff pretending to be tourists, sneaked a pair of wire cutters into the State House and, when no one was looking, cut the cords suspending the cod. They hid the cod in a flower box that they had brought for that purpose and left the State House with it. An anonymous call tipped off State House officials that the cod was missing. The theft was considered a major one, with the House of Representatives declaring that it would not legislate without the cod present. The Harvard Crimson investigated the theft themselves and determined that the Lampoon was behind it. On April 27, the Crimson gave the staff of the Lampoon an ultimatum to give the Sacred Cod, by midnight, to them and allow the Crimson to take credit for returning it or they would go public with their findings. After not receiving a reply from the Lampoon, the details of theft were printed in the next morning's edition of the Crimson.
The Massachusetts State Police were called in to assist with the search for the cod. They went so far as to dredge the Charles River, in hopes of recovering the Sacred Cod.  The authorities also found out that a member of the Lampoon staff was on board a plane heading to Newark, New Jersey. They searched Logan International Airport and wired the authorities in Newark to search the plane the student was on when it arrived, but the cod was still not recovered.  The office of the mayor of Boston also received a call saying to "tell the Mayor that when the Sacred Cod is returned it will be wrapped in the municipal flag, now flying in front of City Hall" and to "Try and catch us when we cop the flag."
Two days after the Sacred Cod was stolen, the Harvard University Police Department received an anonymous phone call informing them on how to get the Sacred Cod back. This led to the Harvard University Police following a car without a license plate in West Roxbury. After 20 minutes, two men, dressed in collared shirts with the collars turned up and hats pulled down, jumped out of the car and handed the cod to the police before speeding away. The cod was not wrapped in the municipal flag as threatened.
On April 28, the Sacred Cod was again hung in the rear of the House Chamber, over the public gallery, only this time it was hung 6 inches (150 mm) higher to prevent future thefts. No charges have ever been filed against anyone for the "Cod-napping", and the details on the whereabouts of the cod, during the 50 hours it was missing, never surfaced.
The next threat to the Sacred Cod came in 1941, when the Aluminum-for-defense Collection Drive in Massachusetts was mistakenly informed that the Cod was made of aluminum, and asked that it be donated to the war effort. Christian Herter, the Speaker of the House at the time, informed the drive that the Cod was created 43 years before aluminum was discovered. Herter passed the request along to the Massachusetts State Senate where another fish emblem is displayed.
In 1968 the Sacred Cod disappeared for a second time. it was found three days later behind a door in the House chamber.
I can tell you from experience that folks at the Massachusetts State House are pretty serious about that thing.  They really bragged it up on a tour of the State House.  I'm sure glad they got it back.  And now you can continue your day.

Luke Scott

There's been a lot of discussion about ESPN's profile of Luke Scott, the Orioles outfielder who is a confirmed birther.  This portion made me shake my head a bit:
Scott's eyes are big, and he's smiling wide while standing in the kitchen. Scott, who has legally carried a concealed weapon since he's been 21 years old, tells Pie and Florimon in Spanish that he has 114 guns at his offseason home, which he shares with his parents, brother, sister, brother-in-law and their two kids.

Both players shake their heads and laugh. Scott, wearing a black baseball cap backward that reads "In God We Trust," walks back into the kitchen and tells us he keeps guns all over his house, even in the kitchen cabinets, and always within reach -- you never know when a criminal could strike, he says.

At his offseason home, Scott has a safe room that holds most of his weapons, ammunition, memorabilia and even ready-to-eat meals. When we're there a few weeks later, his adviser won't allow me to see it. Scott listens to him.

"It's a privilege," he says. "You can see my guns at my apartment. The safe room is a special place. … It's good to have a safe room in your house. It's storm-proof; we've got food, store supplies, all kinds of stuff."

As we leave for the gun range, Scott stuffs a pistol into the side of the sofa cushion.
If you have a concealed carry permit, and actually carry, why hide guns in the kitchen cabinets?  I don't quite follow that logic.  I am glad that I live where the likelihood of criminals showing up in your kitchen is pretty small. 

It's probably a good thing that Marge Schott isn't alive and in control of the Reds, or she'd probably want him on the team.

Oh My

Irish Drinking Songs for Cat Lovers (via Balloon Juice).  Disturbing.

Is that Jesus?

Naked Capitalism Link of the Day

Today's link: The bureaucracy of Gitmo, at Crikey:
Benjamin Franklin’s famous trade-off between liberty and temporary safety – for those who deserve neither — stands itemized in human form in the Gitmo documents, in those many files full of misspellings, malapropisms and justifications, the dream-diary jottings of a superpower nightmare.
In the 14-year-old boy abducted and raped by the Taliban, held by the Americans for over a year.
In the 89-year-old senile man whose neighbour had a phone with numbers of suspected Taliban in it.
In the 70-year-old man, found sleeping at a mosque, for whom no reason could be found as to what he was doing at Guantanamo in the first place.
In the Al Jazeera cameraman, released after six years, held purely because of the Bush Administration’s perverse hatred of the network.
In the inmate with a serious head injury, left, as his file makes clear, to reflexively undress himself and compulsively m-sturbate in public.
In the farmer who shared a name with a suspected terrorist, held over a year after the Americans realized their mistake.
There are more there.  It is absurd that so many people were held for so long, even after the U.S. government discovered the mistakes.  Gitmo is an embarrassment to this country, and a violation of human rights.  The fact that Congress has prevented the Justice Department from closing the prison there and bringing the remaining prisoners to trial shows how cowardly our public officials are.

Why People In Flyover Country Hate The Coastal Elites

Felix Salmon has a very long post about a restaurant squabble in Chef's Table at Brooklyn Fare.  One customer/reviewer got yelled at by the chef, which ruined his wife's experience of the 20-course meal.  After the man wrote up a review in which he described the incident, another restaurant critic made some snooty comments about the first guest.

Mr. Salmon jumps in and points out the chef is a paranoid nut who watched too many reruns of the Seinfeld Soup Nazi episode (ok, I made up the part about Seinfeld, it just seemed appropriate).  He goes on to point out the obvious, that $165 per person for a meal, not including tips or drinks, is absurdly expensive, no matter how wonderful the multitude of courses.  That is one reason why people in the middle of the country resent the coasts.  How can 3 different reporters argue about the rude behavior of a chef who is bringing in that kind of revenue every night, while barely acknowledging how few people in this country could possibly afford such a luxury?  That it is taken by many as a status symbol more than anything else rubs me the wrong way.  Hell, what percentage of New Yorkers could possibly afford such a meal, let alone Ohioans?

Last night, I went in to the nicest restaurant in town, and had a delicious $12.95 8-oz. Prime Rib Dinner with two sides, along with $2 Guinness drafts.  Even with a tab in the $20 range, I felt like I was spending a little too much, given the state of the economy.  I can't imagine dropping over $200 to drink shots of strange food mixes and eat little cup-fulls of stuff I can't identify.  Get off of your high horses you snooty bastards, and come hang with us low people in our dive bars.  Then, you can feel like you are living on the edge, and we'll be able to verify that you are douchebags who make way too much money doing way too little productive human activity.

Voodoo Economics Will Not Die

Tax Justice Network, via Mark Thoma:
George Bush the Elder (pictured) described the idea as Voo-Doo Economics, but like other too-good-to-be-true patent remedies, the idea that tax cuts for business stimulate investment and growth just won't die.

Over the past 30 years economists have researched and debated the case for tax cuts and generally concluded that the empirical evidence doesn't support the argument. In fact the more we consider the evidence the more risible the case for supply-side tax cuts becomes; read this, for example. Sadly the lack of empirical evidence doesn't deter some fanatics from pushing the case for all its worth, especially since politicians love ideas that go across well in soundbites.
It goes on to say that tax cuts on the wealthy lead to corporations paying executives more, and the government receiving less tax revenue.  It doesn't take a sharp mind to grasp that that is exactly what has happened in the U.S. over the past 30 years.

Should Irish Debt Be Restructured

Richard Portes says it is necessary:
Ireland is being made to pay for deciding to socialise its private debt at the end of September 2008. That was the original sin. Advised by Merrill Lynch and pressured by Eurozone authorities, Ireland gambled that its banks were fundamentally sound. A state guarantee would turn markets around, restore liquidity, and give them time to show they could deal with their problems. Not so. Merrill Lynch should at least return its fee. And now policymakers are talking about privatising state assets in order to pay for part of the costs of the socialisation. Whatever the other merits of privatisation, this does not make sense – the right solution is to (re)privatise the debt.
After many subsequent capital infusions of taxpayer funds, the latest stress tests and restructuring plans are supposed to draw a line under the shocking costs of the guarantee and to launch recovery. But the burden of the debt on the sovereign is now unsustainable. The projections in the original IMF programme, endorsed by the European Commission and the ECB, see the debt-to-GDP ratio peaking at 120% in 2013. The IMF itself clearly thinks that the downside risks to the programme are high, likely to materialise, and difficult to mitigate. The government has not convinced the markets – Irish sovereign spreads are today about the same as in November before the IMF programme, and the latest actions have led the ratings agencies to downgrade the sovereign (while upgrading the banks). Yes, a couple of investment banks are now saying Irish debt is a good buy – doubtless because they are now convinced the new government will not dare to restructure the debt. The programme requires some access to market funding from next year. That is not credible unless the debt is restructured.
Private debt should remain private.  There are risks to bond-holding.

Tuesday, April 26, 2011

Is Commodity Inflation a Self-Fulfilling Prophecy?

The run-up in commodities (especially oil and grain) has been tremendous, and has brought with it a lot of talk about runaway inflation.  Is the discussion warranted?  I can see several different causes for the run-up in prices, some fundamental and some technical, but it seems like it is a positive feedback loop. 

First off, the start of the rally came with the wildfires in Russia last summer.  That concern about supply, and already tight wheat markets, sent grain up significantly.  Then came a U.S. harvest which was below expectation, combined with the Fed announcement of their QE2 program.  Since then, higher oil prices have made ethanol more competitive, driving further demand for corn, and more Chinese grain buying has added to supply concerns.  Throw in the upheaval in the Middle East and more Chinese and Indian demand for oil, and prices have skyrocketed.  These price increases have fueled buy-side purchases based on technical factors, and pension funds and the like have piled in for inflation protection. 

I guess what I see is supply issues, coupled with increased demand, pushing prices, along with fear of the Fed policy boosting inflation concerns.  The increased prices lead to more fear of inflation, plus, the competition between ethanol and expensive oil leads to more corn being ground.  Finally, the Chinese have stacks of (depreciating) dollars and need for commodities, so they continue to buy more.  My conclusion, I guess, is obvious, but prices will continue to rise until they don't.  I don't know what will end up breaking this feedback loop, but it can't continue indefinitely.

Foghorn Leghorn Sits Out the 2012 Campaign

So, Haley Barbour, the former tobacco lobbyist, former RNC chairman and White Citizens' Council supporter won't run for President.  That means I'll have to go to YouTube to hear a Southern drawl and folksy sayings.

New Additions

After a couple of bugs, I now have grain quotes and a facebook link added to the site.  Maybe in the future I will customize the quotes, and add some other items.

Update:  I should say that I will probably improve the market quotes if it continues to rain, since no other work is getting done.

When Regulations Need Adjustments

The NYT on college sports compliance with Title IX, via Balloon Juice:
Ever since Congress passed the federal gender-equity law known as Title IX, universities have opened their gyms and athletic fields to millions of women who previously did not have chances to play. But as women have surged into a majority on campus in recent years, many institutions have resorted to subterfuge to make it look as if they are offering more spots to women.
At the University of South Florida, more than half of the 71 women on the cross-country roster failed to run a race in 2009. Asked about it, a few laughed and said they did not know they were on the team.
At Marshall University, the women’s tennis coach recently invited three freshmen onto the team even though he knew they were not good enough to practice against his scholarship athletes, let alone compete. They could come to practice whenever they liked, he told them, and would not have to travel with the team.
At Cornell, only when the 34 fencers on the women’s team take off their protective masks at practice does it become clear that 15 of them are men. Texas A&M and Duke are among the elite women’s basketball teams that also take advantage of a federal loophole that allows them to report male practice players as female participants.
Title IX, passed in 1972 at the height of the women’s rights movement, banned sex discrimination in any federally financed education program. It threw into sharp relief the unequal treatment of male and female athletes on college campuses.
Over the next 40 years, the law spawned a cultural transformation: the number of women competing in college sports has soared by more than 500 percent — to 186,000 a year from fewer than 30,000 in 1972.
But as women have grown to 57 percent of American colleges’ enrollment, athletic programs have increasingly struggled to field a proportional number of female athletes.  And instead of pouring money into new women’s teams or trimming the rosters of prized football teams, many colleges are turning to a sleight of hand known as roster management.
Women will eventually run the world from up front, not just through their husbands.  57% of college enrollement? Dudes are screwing up bad.

Naked Capitalism Link of the Day

Today's link: Japan's Terrifying Day Saw Unprecedented Blown Roof Expose Tepco Fuel Rods, at Bloomberg.  The most thorough report I've read thus far:
The seabed off Japan had buckled along a 300-kilometer stretch of fault line. The upheaval hurled about 67 cubic kilometers of ocean at Japan’s coast, or enough to flood all of Manhattan a mile deep, according to estimates by Roger Bilham, a seismologist at the University of Colorado.
Within an hour the tsunami would smash into 860 kilometers of Japan’s coastline at heights the U.S. National Oceanic and Atmospheric Administration estimated as high as 24 meters.
Akira Tamura, a 35-year-old control room manager at Dai- Ichi’s No. 2 reactor, was home on March 11 in Minami Soma on a day off. He was surfing Internet news sites dressed in sweat pants and a T-shirt, when the quake reached his area.
“Roof tiles went flying and crashing in the street,” he said.
After checking on elderly neighbors, Tamura jumped in the car and picked up his wife at the flower shop where she worked. He was forced to change route because main roads were flooded. His apartment was on higher ground out of the tsunami’s reach.
At Tamura’s Dai-Ichi workplace, the tsunami crashed over a 2.5-kilometer breakwater of 60,000 concrete blocks and 25-ton tetra pods as well as a 5.6-meter-high wall in the seabed in front of the site.
The plant, built on a layer of rock 10 meters above sea level, was pummeled by a wave as high as 15 meters that flooded parts of the facility in six meters of seawater before flowing back to the ocean, according to Tepco estimates.
Interviews with workers at Dai-Ichi that day indicate that as most staff had left and many of the Tepco technicians were inside buildings checking on reactors, few saw the waves arrive.
Witnesses say from higher ground behind the plant, the view was blocked by buildings. A Tepco engineer, who’d worked for the company for 30 years, was in reactors 5 and 6 after the earthquake and said he didn’t realize the tsunami had hit.
Also, today marks the 25th anniversary of the Chernobyl disaster.

Lucky People vs. Unlucky People

A very good article (also via The Big Picture) on life and chance, with Steve Jobs advice mixed in for good measure.  I liked this part a lot:
Recently I came upon a fascinating study by Richard Wiseman, a psychologist at the University of Hertfordshire. Wiseman surveyed a number of people and, through a series of questionnaires and interviews, determined which of them considered themselves lucky—or unlucky. He then performed an intriguing experiment: He gave both the “lucky” and the “unlucky” people a newspaper and asked them to look through it and tell him how many photographs were inside. He found that on average the unlucky people took two minutes to count all the photographs, whereas the lucky ones determined the number in a few seconds.
How could the “lucky” people do this? Because they found a message on the second page that read, “Stop counting. There are 43 photographs in this newspaper.” So why didn’t the unlucky people see it? Because they were so intent on counting all the photographs that they missed the message. Wiseman noted,
“Unlucky people miss chance opportunities because they are too focused on looking for something else. They go to parties intent on finding their perfect partner, and so miss opportunities to make good friends. They look through the newspaper determined to find certain job advertisements and, as a result, miss other types of jobs. Lucky people are more relaxed and open, and therefore see what is there, rather than just what they are looking for.”
This is something I can easily screw up.  The Steve Jobs stories are well-tied-in, read the whole thing.

Nassim Taleb on Oil Dependence

The author of The Black Swan gives an interview at the Wharton School (h/t Ritholtz):
Herring: Given your view on the fragility of Saudi Arabia, how should we think about making direct investments in Saudi Arabia, the supply of oil or military alliances?
Taleb: I think that an oil shock would be very good because we need to be trained to finally give up on these stupid cars. We have so many alternative sources, and people are too lazy. We need to enhance anti-fragility in this area. You can move from wild randomness into mild randomness by creating some. It is like hormesis: You give someone a little bit of poison and they get stronger. Economic life gets stronger not with bailouts, but with bankruptcies.
Evolution works not with bailouts -- there are no bailouts in nature -- but with competition and natural selection. So you need to have some stressors and to use stressors to strengthen the system. We have not been stressed enough about the oil crisis, and it has led to a horrible situation in which the U.S. government is playing a hypocritical role driven by humanitarian forces in Libya, but at the same time supporting the Saudi royal family, essentially one tribe running a place -- even giving its name to it. It is the most unstable place and the most backward of regimes in the world -- all in the name of oil security.
So you realize that you have some schizophrenia as far as how a lot of Western governments are behaving. So we need a little bit of oil shock....
Herring: It requires more than a shock, doesn't it? Because we have had those before.... In fact, the price of oil in real terms was even lower than just after the OPEC increase. So the motives for making substitutions just were not there.
Taleb: I see. But do you think that we will eventually wean ourselves from that nasty dark product from the ground?
Herring: One hopes. But it is hard to see how given the reality of the way we have built our society, with remote suburbs and interstate highways linking everything. We cannot make a very quick substitution out of the petroleum-based economy. But you are absolutely right. It has got to be faced.
Taleb: This is the fragility of having dependence on one source -- one product -- rather than more than one.... It is optimal to use oil visibly. But it is more dangerous. In my new book, I focus on optimization; almost 99 cases out of 100 optimizations make you vulnerable and fragile.
Herring: Yes. That's the darker side of Adam Smith's pin factory. You become more efficient by becoming more specialized, but you also become more vulnerable to some kinds of shocks.
Taleb: [When a company becomes] more specialized with things, and it works better, the numbers look better. But your hidden risks rise and rise. And then when you are faced with a problem, you don't know what to do about it, whereas in other cases you have more variations all the time. You have more fluctuations and, of course, you are a lot more robust.
He has a lot more to say on the economy and risk, options and a lot more.

The Subtracted Cities

Deborah Popper, via Mark Thoma and Richard Green:
Detroit stands as the ultimate expression of industrial depopulation. The Motor City offers traffic-free streets, burned-out skyscrapers, open-prairie neighborhoods, nesting pheasants, an ornate-trashed former railroad station, vast closed factories, and signs urging "Fists, Not Guns." A third of its 139 square miles lie vacant. In the 2010 census it lost a national-record-setting quarter of the people it had at the millennium: a huge dip not just to its people, but to anxious potential private- and public-sector investors.
Is Detroit an epic outlier, a spectacular aberration or is it a fractured finger pointing at a horrific future for other large shrinking cities? Cleveland lost 17 percent of its population in the census, Birmingham 13 percent, Buffalo 11 percent, and the special case of post-Katrina New Orleans 29 percent. The losses in such places and smaller ones like Braddock, Penn.; Cairo, Ill.; or Flint, Mich., go well beyond population. In every recent decade, houses, businesses, jobs, schools, entire neighborhoods -- and hope -- keep getting removed.
The subtractions have occurred without plan, intention or control of any sort and so pose daunting challenges. In contrast, population growth or stability is much more manageable and politically palatable. Subtraction is haphazard, volatile, unexpected, risky. No American city plan, zoning law or environmental regulation anticipates it. In principle, a city can buy a deserted house, store or factory and return it to use. Yet which use? If the city cannot find or decide on one, how long should the property stay idle before the city razes it? How prevalent must abandonment become before it demands systematic neighborhood or citywide solutions instead of lot-by-lot ones?
Subtracted cities can rely on no standard approaches. Such places have struggled for at least two generations, since the peak of the postwar consumer boom. Thousands of neighborhoods in hundreds of cities have lost their grip on the American dream. As a nation, we have little idea how to respond. The frustratingly slow national economic recovery only makes conditions worse by suggesting that they may become permanent.
 Abandoning urban centers and increasing suburban sprawl will look pretty foolish if we hit peak oil.  The sadly beautiful ruins in Detroit are frustrating.

Michigan Central Depot in Detroit.  Photo from Forgotten Detroit.

Jim Tressel's Watergate

Why is it that it is the cover-up more than the actual crime that ruins somebody:
In a sharply worded rebuke of Ohio State's Jim Tressel, the NCAA on Monday accused the 10-year coach of withholding information and lying to keep Buckeyes players on the field who had accepted improper benefits from the owner of a tattoo parlor.
In a "notice of allegations" sent to the school, the NCAA said Monday that the violations relating to the coach are considered "potential major violations."
Ohio State was not cited for the most serious of institutional breaches since Tressel hid information from his superiors for more than nine months. The university has 90 days to respond to the ruling body of college sports' request for information before a scheduled date before the NCAA's committee on infractions on Aug. 12 in Indianapolis.
In a 13-page indictment of Tressel's behavior, the NCAA alleged that Tressel had "permitted football student-athletes to participate in intercollegiate athletics while ineligible." It also said he "failed to deport himself ... (with) honesty and integrity" and said he was lying when he filled out a compliance
form in September which said he had no knowledge of any NCAA violations by any of his players.
He may survive this because Ohio State cares more about winning football games than class, but he'll never be able to live this down.