Dubai World Ports #2

Here are some economic points by Nouriel Roubini that expand upon my recent post about the Dubai World Ports matter. Emphasis added.

The current political saga and debate about the purchase by a Dubai-based company of the management of six US ports misses the most crucial point: with a US current account deficit running towards $900b this year and probably above one trillion $ next year, in a matter of a few years foreigners may end up owning most of the U.S. capital stocks: ports, factories, corporations, land, real estate and even our national parks. This is basic accounting: if you run a current account deficit (import more than export, spend more than your income, save less than you invest) you need to borrow from the rest of the world to finance such excess of spending (on private and public consumption and investment) over your national income....

Also, the worry about unfriendly regimes is somehow misplaced as, unfortunately, the countries that are now financing the US current account deficit are not our friends and allies but, potentially, our geopolitical rivals or unfriendly states. In the 1980s, the biggest financer of US twin deficit deficits were the U.S. geo-strategic allies: Japan and Europe. Today instead, the biggest financers of the U.S. twin deficits are China, Russia and Saudi Arabia. China is potentially the most significant strategic rival of the US or, at least, a strategic competitor; Russia is a relatively unstable country that is not a US ally and is becoming increasingly authoritarian; while Saudi Arabia is an authoritarian and unstable regime that has been using a small part of its accumulation of petrodollars to finance Islamic fundamentalism around the world. So, for its own financing the US is effectively captive to the political decisions of potentially unfriendly states, an indeed worrisome "balance of financial terror". The war on terror and the war in Iraq are being financed by China, Russia, Saudi Arabia and a bunch of other unfriendly or unstable countries (Nigeria, Venezuela, Iraq, etc.). And all these countries and their private and public investors, whether friendly or unfriendly, now increasingly want to buy US equities rather than useless bonds....

they will sell us their goods and services and they will require to be paid not in IOUs but rather real assets and the gems of the US capital stock. It is only a fair trade. And if we do not like that as a nation, maybe we should start taxing the rich, cut our budget deficit and have more public savings as we did in the 1990s; we should consume less, save more and build less homes that are increasingly bubbly. The alternative is clear: if we continue with our current patterns of spending above our incomes, by 2013 the US foreign liabilities could be as high as 75% of GDP and an increasing fraction of such liabilities will be in the form of equity, i.e. foreigners owning our capital, real estate, assets, ports, parks and whatever other national gems we own. It is simply a matter of basic national income accounting: if you spend more than your income, the willingness of your creditors to lend you money will eventually shrink and you will be instead forced to sell them your real assets rather than IOUs and debts on which you may eventually would want to default on. Any smart creditor know he/she needs collateral against its credit claims; and there is no better collateral than taking over directly the assets of the reckless debtor. Caveat Emptor!

A Warning?

From yesterday's China Daily, courtesy of Reuters:

China should reduce the dollar share of its foreign exchange reserves because of the risks posed by the instability of the U.S. currency, influential economics professor Xiao Zhuoji said in an interview published on Monday.

Speaking to the Shanghai Securities News, Xiao also proposed a number of ways to slow the explosive growth in China's reserves, which rose 34 percent last year to $818.9 billion.

"Dollars account for most of our reserves, and the instability of the dollar increases foreign exchange risk. So we should take measures to cool down this extraordinary reserve growth," the paper quoted Xiao as saying.

He proposed adjusting the structure of China's reserves to reduce currency risk but did not elaborate.

Xiao is a Peking University professor and a member of the standing committee of the Chinese People's Political Consultative Conference, a body that advises the National People's Congress, or parliament.

The congress convenes on Sunday for its annual session.

One more step

China has announced that it plans to adopt many international accounting standards in 2007. Of course, there will be a Chinese spin on them, but it's a good move.

Another Hedge Fund Bites the Dust

Investigators are having a hard time finding the $150,000,000 that was supposedly in the bank account of International Management Associates on February 15. This fraud has made more news than other recent similar frauds mainly because several football players had invested with the company; they are now suing for the return of their $15,000,000.

How do you define 'proficient?'

Following up on some of my earlier comments on our educational system, I point out a very interesting chart in today's Wall Street Journal with regard to the percent of eighth graders considered proficient by the state and those considered proficient as a result of their taking the National Assessment of Educational Progress (NAEP) test. Just take two states at random. In Connecticut's tests 75% are rated proficient in reading and 76% in math. When these kids took the NAEP test, their results were not as good: 34% in reading, 35% in math. Georgia has similar results; their tests show 83% proficient in reading and 59% in math. In the NAEP test the results were 24% in reading and 22% in math.

The problem is that the No Child Left Behind Act allows states to define 'proficient' anyway they want. Obviously, there should be a uniform standard. Without a national standard how can we know how well our kids are doing against the competition here, let alone the competition around the world they will face when they grow up?

Let it come to you

I've subscribed to something called FeedBlitz. I think it will be useful for those of you who don't use RSS and would rather know when I've added an entry here, as opposed to you're coming here and finding nothing new. You can subscribe by entering your e-mail in the box indicated on the lower right side of this page. By doing so, you'll get an e-mail from FeedBlitz every night listing the headlines of the articles I've posted that day. If after you have subscribed, you find the daily e-mails a pain in the ****, you can unsubscribe.

Managing Our Property

The federal government has facilities in almost a half-million buildings around the world. Managing this space is not an easy task. But, as a recent General Accountability Office (GAO) report shows, improvements could be made which would save us billlions of dollars. For example, DOD alone estimates that it spends $3 - $4 billion annually maintaining facilities it no longer needs. The former main post office in Chicago has been lying idle since 1997 at a cost of $2,000,000 annually. The VA in 2003 had 577 vacant and underutilized properties. The Mendel Rivers Federal Building in Charleston, SC has been vacant since 1999.

The government does have unique problems in disposing of some of these properties. For example, GSA cannot enter into private-piblic partnerships to redevelop property. Limited funds often force the leasing rather than purchasing of property, which is cheaper in the long run.

But, again, it is our money that is not being spent wisely. As has been said before, the couple of billion here plus the couple of billion there can soon add up to a tidy sum.

The Week from Hell?

The hell that is now Iraq
The attack on a very big Saudi oil refinery
The strife in Nigeria
The coup in the Philippines
The chauvinism re the Dubai Ports deal
The conviction of Irving
The suspension of the mayor of London
The downgrading of the only Iraqi battalion that supposedly could fight on its own
Bird flu moving all over Europe
The torture in Guantanamo
The spying on all of us
The record deficits
The declining incomes of the average family
Where and when does it stop?

but, pluralizing the words of Maya Angelou, "still we rise"

Looking to the future

Here's a sobering presentation by the Comptroller General

Are you better off today than you were in 2001?

Not according to the latest Federal Reserve Survey of Consumer Finances, unless you are one of the truly rich. The average family's net worth at the end of 2004 was up 1.5% since 2001. The typical family in the richest 10% had a net worth increase of 6/5%, while the average family in the bottom 25% saw their net worth drop 1.5% to $13,300. The income of the average family rose only 1.6% over the three years, while debt increased from 12.1% to 15% of assets.

Where do you fit in these averages?

What's happened to the accounting profession?

Now we learn that the people running FNMA either knew crap about accounting or were crooks. Consider some of the conclusions of the Rudman report:

• Accounting practices were not consistent with GAAP (Generally Accepted Accounting Principles). GAAP is what you learn in Accounting 101.
• Accountants, financial people, auditors were either unqualified, did not know their roles or failed to exercise their responsibility.
• Information management gave to the board was incomplete or misleading.
• Accounting systems were grossly inadequate.

The result: a need to restate their numbers by $10.8 billion.

Bush is not always wrong

If you read this blog reasonably often, you may be surprised at the title of this post. However, I think he's right in supporting the purchase of Peninsular & Oriental Steam Navigation Co. of London by Dubai Ports World. First of all, it's not as though all other ports in the US are controlled by US companies; few are. Nor is it the case that US companies have refrained from moving into just about all countries of the world where they can; in many countries we are major players in the local economy.

Our leaders got all hot and bothered about the attempt by CNOOC to buy Unocal and forced CNOOC to back off. That didn't exactly support our contentions re the global economy and free trade. The attempt to block Dubai not only flies in the face of our claims of freedom, but also allows our enemies to once more note that our actions do not support our words and further undermines any nascent belief on the part of Muslims that maybe we really don't hate them.

Our trade deficit last year was $725 billion and set another record. Who does the Senate think is funding this? It's foreign countries. At some point their investments will slow down unless we improve our economy and move this deficit down considerably. Rejecting Dubai now, as we rejected CNOOC, will only hasten the day of reckoning for us and our deficit.

Of course, the big claim is that terrorists will be more likely to attack us since the UAE was the home of one of the 9/11 conspirators and has seen terrorist money launderings and other shenanigans that happen in most economies when they move from a backwater to the forefront.

However, Dubai has changed somewhat and appears to be less of a terrorist haven. The real problem with terrorists attacking our ports is not that they are run by Dubai, it's the crappy security we have now; after all it's the government, not the owner, that has the responsibility to protect us. If the Senate were really serious about the risk of terrorism that is inherent in this deal, they would better fund the Coast Guard and they would demand that our Army and Navy cease using ports and bases in Dubai.

I know it's an election year and we'll see a lot of stupid things done in hopes that votes may be won. But if the senators and others have their isolationist say, this country will pay the price while they spend the retirement money we will have given them.

Addressing Part of the Problem

I've written earlier this year about the problems in China with regards to peasants being cheated out of their land so that village officials can make money from selling the farmland for industrial development. In 2004 alone there were 74,000 uprisings by the peasants in protest over this practice. And you also have a situation in which the benefits of China's strong economy are not seen by the rural populace.

Well, it looks like the government is starting to address the problem with their 'new socialist countryside" initiative. They will now focus, so they say, on balancing what has been a very uneven economic development. They will institute such programs for farmers as free education, increased subsidies, public works investment and medical care. But, although they acknowledge the existence of the land problem, there will be no changes made there yet.

Half a loaf is better than none.

A different state of the union

Ian Welsh at Blogging of the President has a different take of where the US stands today. It's a bit over the top, but you can decide for yourself how much.

Has the FDA lost its way?

Last week I reported on the FDA's approval of a device that did not pass clinical trials. Today, I learn in today's Wall Street Journal that the FDA is approving a clinical trial of a blood substitute, the first trial (and the last reported trial) in which ten of 81 patients who received the blood substitute, PolyHeme, had heart attacks within seven days. None of the control group of 71 had a heart attack. Further, those who took Polyheme also suffered from heart rhythm aberrations and pneumonia almost twice as often as the control group.

I say 'last reported trial' above because the company, Northfield Laboraties, shut down a larger study saying it was taking too long to finish. Doctors who had used the product asked for a report of the trial, which began in 1999, but were told only about the doctors' own patients.

In marketing material to convince people to join the trial Northfield has statements saying that the product has not caused any damage previously.

This is certainly not the FDA I know.

Sick sense of humor

I know I have one, because I thought this was funny.

A different view of Osama's statements

Max Rodenbeck, the Middle East person for The Economist, reviews two books about Osama bin Laden in the current issue of the NY Review of Books. One book is a compilation of Osama's statements. Rodenbeck parses some of the statements in a way that suggests we might be better off doing the same rather than dismissing Osama with the words we "do not deal with terrorists". Perhaps by understanding what Osama is saying, we may be able to counter whatever influence he may have in the Muslim world. An interesting read.

We should be ashamed

Yesterday the head of the US Southern Command, General Bantz J. Craddock, conceded that we were using 'restraint chairs' to force-feed detainees at Guantanamo. Lawyer's notes from his interview with one detainee quote the detainee as saying, "The head is immobilized by a strap so it can't be moved, their hands are cuffed to the chair and the legs are shackled. They ask, 'Are you going to eat or not?' and if not, they insert the tube. People have been urinating and defecating on themselves in these feedings and vomiting and bleeding. They ask to be allowed to go to the bathroom, but they will not let them go. They have sometimes put diapers on them."

According to General Craddock, the medical staff had indulged the hunger strikers by allowing them to choose the color of their feeding tubes, which are placed in a detainee's stomach via his nose. The former chief medical officer wa awarded a Legion of Merit Medal for 'inspiring leadership and exemplary performance".

Now read this article from the Atlantic for more information which will make you ashamed. This article is based on research by Corine Hegland of National Journal. Some highlights of that research:

• Most are Pakistanis, many of whom were 'sold' as terrorists, not captured on a battlefield as we are led to believe.
• 75 of the 132 who have filed habeus corpus petitions are not even accused of acts against the US.
• It's likely that less than 20% have ever been members of Al Qaeda.
• Evidence against the detainees is hearsay from people without firsthand knowledge.

A Seton Hall study quotes a flier dropped in Afghanistan when some detainees were captured, "Get wealth and power beyond your dreams...You can receive millions of dollars helping the anti-Taliban forces catch al Qaeda and Taliban murderers. This is enough money to take care of your family, your tribe, your village for the rest of your life. Pay for livestock and doctors and school books."

This is the American way? It's not the way I was taught, but it's certainly the way to ensure we are hated in the world - and for these crimes we should be hated.

Hang the bastards

My son sent me this clip from CNN.COM. It describes a bunch of true anti-Americans who will invade people's privacy in their most difficult moments, dishonor our soldiers, trash our flag. Why? In their considered opinion God has killed our soldiers in Iraq because he is punishing this country for harboring homosexuals. So, this nasty bunch of idiots appears at the funeral of these guys who have died for us and disrupts the funeral, whether or not the dead soldier was homosexual (as if anybody cares at that point). Their God also told them in the '90s to picket the funerals of those who died from AIDS.

I thank my God for the motorcyclists who are trying to counter the idiots. Talk about the abuse of free speech. Cutting the tongues out of these people would be a fitting punishment.

Now you see it. Now you don't.

Every so often the government declassifies secret documents. In fact, they are required to do so twenty-five years after the document was created, unless, of course, exceptional conditions exist. Well, come to find out, since 1999, the government has been reclassifying as secret documents that they had previously declassified. This has not been a small task as they have reclassified 55,000 documents so far and they have about thirty people reviewing declassified documents every day. If these reviewers made only $50,000 a year, you're looking at another $1,500,000 of our money down the drain.

This whole program is ludicrous as many of the documents were published by the State Department. Copies of a good many are in historian's file cabinets. Some of the reclassifications appear to be attempts to cover embarassing incidents, such as the CIA claiming China would not intervene in the Korean War two weeks before they actually did.

Further, although the law requires reclassification to be reported to the Information Security Oversight Office, this has not been done. What in the Lord's name is going on? We have had an unbelievable increase in the number of classified documents at a very significant cost. Now, we have a situation where what was okay to look at yesterday is verboten today. Sound like 1984 to you?

Another free speech case

David Irving is probably not a very nice guy. He's the author of books which claim that the Holocaust never occurred. He's made speeches making the same point. He's sued people relative to their position on the Holocaust.

He was convicted yesterday in an Austrian court for being a Holocaust denier. Austria, the birthplace of Hitler, passed a law in 1992 which makes denial or excusing of Nazi crimes against humanity a crime. Is this law just? Would we convict someone who denied that slavery existed in this country? I don't think so as this position is so ridiculous a proponent of such would be laughed off the stage by any person aware of our history.

IBM on the move

Researchers at IBM have developed a new way to make computer chips, a way that will very likely extend Moore's Law (the density of computer chips doubles about every two years) for another five years or more. Now a chip can be made that stores 4 billion bits of data. If Moore's Law holds until 2013, then the densest chip will hold 64 billion bits.

A few years ago this achievement would only be remarked on for its technical advance. Today, it is also an advance made by an American company, demonstrating that the mojo is still here. Kudos to IBM!

Curt Gowdy Has Died

Gowdy was the guy who brought intelligence and class to the broadcasting of Red Sox games. It was his work with the Sox that got him his really big break as THE announcer for major sports events across the country. He also seemed like a genuinely nice guy. Bon Voyage, Curt.

Too Late?

Dexter Filkins reported in yesterday's NY Times Magazine that the military has begin to implement the oil spot theory, i.e, they are focusing on protecting the locals rather than hunting the insurgents. Of course, the worry is that it may be too late. Let's hope it is not.

Here's a new one

Analog Devices has paid above the going interest rate on deferred compensation of its executives and board members. Last year, they paid 6.48% when Treasury bonds were paying 4.64%. This 'slight' differential resulted in the CEO earning $8.7 million in interest alone last year. Of course, his $144.7 million in deferred compensation that he took home last year dwarfed the interest payment. Oh, he also had a salary of $931,000, a bonus of $414,000, options on 400,000 more shares, and $2.85 million he took in when he exercised older options.

You gotta love it! Otherwise, you'd want to cry at the greed of some people and the failure of the board to exercise fiscal responsibility.

The Duke of Sleaze

Former Representative Duke Cunningham will be sentenced soon for conspiracy to commit bribery, tax evasion and honest-services fraud. He had the effrontery to have a price list for those who bribed him: $16 million in contracts was worth a $140,000 yacht, then for every $1,000,000 additional contract the price was $50,000. He evn offered a volume discount.

When he realized that the FBI was on his case, he solicited people to lie for him. He sold his house to a defense contractor for $1,685 million; a year later the contractor sold it for $985,000 in an up market.

Budget Gimmickry

I can't say I fully understand the arcana of the federal budget, but apparently there are 'rules' to be followed. One rule involves something called 'scoring', which is apparently used to determine whether certain actions cost anything. By these rules, the Bush tax cuts have zero cost. For more information on this, read this report from the Center on Budget and Policy Priorities.

The "Collection"

I must have finished the puzzle in the NY Times Magazine faster today, for I found myself actually reading some of the advertisements. Some of the ads for apartments and houses were beyond belief.

Consider the "Peter Som Collection of Residences". Who the hell is Peter Som and why does he have a collection of places to live that he is trying to sell for a mere $795,000 to $7,0000,000? Why does the Corcoran Group Real Estate want to sell me an apartment that makes sure that where I live says who I am? Why should having a different abode let me live who I am? Why do I need the 23 foot kitchen that's available in lofts that start at $2.3 million? Why will my life at Avery, a 30-story luxury condominium bringing a balanced life style to the Upper West Side, be perfectly balanced?

Masochists?

Almost since the start of Dukes County there have been attempts by the County Commissioners to control the Airport Commission. The County Commissioners have appointed themselves to the Airport Commission. They have refused to re-appoint Airport Commissioners they deemed unworthy in some way. Airport Commissioners have resigned to protest the County Commisioners' interference. The commissions have sued each other. It's been an absolute mess.

So, I was shocked when about a dozen people - most of whom seem to be very capable and knowledgeable about aviation - applied for the airport commission vacancies that arose as a result of the latest messing about by the County Commissioners.

Hope springs eternal!

Legal strategy or a real need?

Libby's defense team has asked to see the President's daily brief for 277 days beginning in May 2003. Any request to see classified information, particularly that which has such a high level of secrecy as the daily brief, will cause the prosecution to think more than twice about whether to grant this request or stop the prosecution. Fitzgerald thinks the request is an attempt to stop the prosecution. Libby's lawyer says it's needed for his defense. Whom do you believe?

There's a first for everything

For the first time a director at the FDA overruled the unanimous advice of his scientific and administrative staff and approved an implanted device designed to treat persistent depression. The device had failed the single clinical trial that was held. Yet, the spokesperson for the director said it was approved because many people with persistent depression "are otherwise on their way to institutionalization". This is sound testing and reasoning? Would you allow a doctor to use the device on someone you love? Would a good doctor want to use one?

Small Town. Small Minds?

My town, West Tisbury, has a little over 2500 inhabitants. Like many small towns across America you'll find some people holding more than one political office. This is due, I feel, partly to the officeholders' ability to get out their vote. But, another reason is the lack of people willing to challenge the incumbent or run for offices even where the incumbent is a 'newbie' (or "wash ashore" in Martha's Vineyard parlance). Last year there was only one contest - for Tree Warden; all other races were uncontested.

This year is different. The controversies that have arisen have finally spurred a rash of competition, which I think is great. However, animosities generated over the past year(s) have also resulted in a warrant article forbidding anyone from holding more than one elective office.

Now, I don't have a problem with this article, although I fear that it may not result in more competition. However, the article does not include all elective positions, it does, however, include each of the three positions held by the selectman whose term is up this year. Interestingly, the selectman had no opposition for the other two positions he holds. With the way things have been going this year, I suspect the article, most likely after being amended to include all elective offices, will pass.

They're coming in their own cars

Late next year or perhaps in 2008 we will see Chinese vehicles on our streets. Malcolm Bricklin, who has just raised $225 million for R&D work on China's Chery car, will be importing these cars then. In many ways it is likely that the quality of the Chinese cars will be relatively poor, as was the quality of Japanese and Korean cars when they were first sold here. However, while it took the Japanese twenty years to establish themselves here, it took the Koreans only ten years. How long will it take the Chinese?

The Way It Should Be Done

At least one division, the 10th Mountain, is doing things differently in getting ready for deployment in Afghanistan. They're learning about the culture, the people and the language.

Words or Actions?

Every four years the Pentagon reviews our military strategy in great depth, identifying possible enemies and laying out a strategy for meeting the challenges these enemies raise. This so-called Quadrennial Defense Review (QDR) also discusses the weapons systems we will be working on over the next few years.

Andrew Krepinevich, who proposed the 'oil spot' theory for dealing with our problems in Iraq, doesn't think that our strategy matches the identification of the challenges posed by our potential enemies. He feels that we are spending too much money on outdated systems and not enough on systems that would be able to meet the challenges we will be facing. For example, the QDR calls for spending $250+ billion on the F-35 fighter. Yet, the terrorists don't have planes to be shot out of the air by the F-35 and China, North Korea and Iran will be relying on ballistic missiles, not fighter aircraft. On the other hand, the QDR does not give enough money to increase the number of special forces battalions, which would be most useful against radical Islamists. His full report is available in yesterday's Wall Street Journal (subscription required) and will likely be available soon on the web site of the Center for Strategic and Budgetary Assessments.

Legislation I Like Lasts Forever

In the late 1990s the government wanted to encourage oil and gas companies to explore in the Gulf of Mexico. Since this was a very risky proposition and the price of oil and gas was a heck of a lot lower than it is today, the government waived its 12% royalty on any discoveries. Well, oil and gas were discovered and are being pumped today when the price of oil and gas is approaching the stratosphere. Some companies say that they are not claiming refief from paying the royalty, but many companies are not.

The government made a deal that so happens to be a large benefit to the energy industry. Should it renege on it? Or, should it try to work out a new deal? It's an important question, as payment of royalties at current energy prices would amount to at least $7 billion (and maybe $42 billion) in five years.

Hearsay or Fact?

The BBC reports of a draft UN report that claims that some detainees have been tortured in violation of international law. The report also questions the legal status of the camp and the classification of detainees as enemy combatants.

Our government says the report is based on hearsay, since the authors never visited Guantanamo.

Two Spoiled Kids

There is a report circulating that Israel and the United States are discussing ways to destabilize the Palestinian government so that newly elected Hamas officials will fail in governing the country and elections will be called again. They will use the withholding of money to make life so difficult for the Palestinian people that they will reject Hamas and seek a return of the Fatah government, that bastion of incorruptible, competent leaders.

I'm reminded of the reaction of a spoiled brat when he does not get his way. One of the arguments being used to justify this 'coup' is that Hamas did not receive the mandate indicated by the number of seats it won. I wonder whether there should have been a coup in this country in November 2000 when our president was seated by a court, not by the electorate.

Reporters' Frenzy

I can't understand the brouhaha by the media with regard to the time it took to report Cheney's shooting of a hunting companion. Why don't the reporters get as excited about some of the really important things Bush and Cheney are doing and not doing? The fuss about the shooting is as weird as the fuss about Britney Spears driving with her baby in her lap. Who cares?

You have to fill out the customs form properly

This woman did not.

Not a Whitewash

It looks as though the House committee investigating the response to Katrina will be blasting the Bush administration's response. Here are some excerpts from their draft report as reported in today's NY Times.

"Our investigation revealed that Katrina was a national failure, an abdication of the most solemn obligation to provide for the common welfare," the draft says. "At every level — individual, corporate, philanthropic and governmental — we failed to meet the challenge that was Katrina. In this cautionary tale, all the little pigs built houses of straw."

"It remains difficult to understand how government could respond so ineffectively to a disaster that was anticipated for years, and for which specific dire warnings had been issued for days," the report says. "This crisis was not only predictable, it was predicted."

"The president is less interested in yesterday and more interested with today and tomorrow," Mr. Abney said, "so that we can be better prepared for next time."
The White House declined to provide copies of e-mail messages or other correspondence by senior advisers to the president, limiting the House investigators' ability to understand fully the White House's role in the response, the report says. But with the information the committee collected, it says, it is clear that the president's office is also to blame.

The response to Hurricane Katrina, the report says, ultimately was a failure of leaders to take action.
"If 9/11 was a failure of imagination," it says, "then Katrina was a failure of initiative."

You may find it hard to believe but the committee was made up only of Republicans.

The view from the other side?

James Carroll has an interesting piece in today's Boston Globe asking us to consider how things look to the Muslims, rather than making assumptions about them based on our limited view of the world.

Ho Hum. Another Record

2005 was the fourth year in a row in which the country's trade deficit hit a record. The deficit was $725.8 billion, almost 20% higher than 2004. The major reasons for the increase were the continuing rise in imports (particularly from China which accounted for about 27% of the deficit) and the high price of oil.

How long can this continue?

A New Town Hall

Sometimes in life you have to admit defeat, you have to accept that your plans will not come to pass. In other words, you have to accept reality. That time has come for the Town of West Tisbury with regards to renovating the Town Hall.

The dream was glorious: return an historic building to its former beauty while providing a modern and useful work space for the Town employees. However, it has been ten years since the Town began its attempt to actualize this dream. And, in that ten years - as I suspect in many of the previous years - little, if any, maintenance has been performed on the building. Anyone who attempts to renovate this building is taking a large risk that these years of neglect have not created conditions that make renovation economically infeasible. No one – neither Town officials nor Preservation Society experts - really knows the state of the building or what it would ultimately cost to renovate it. Further, the Town does not know whether the Preservation Trust would be willing to take over the building and lease it back to the Town at a price the Town would be willing to pay.

It is time to accept the fact that the world and West Tisbury have changed. The center of the Town is moving to the North Tisbury area. What is now the Town center is slowly but inexorably becoming an historic district. I know many will be saddened to see the Town Hall located in a different part of Town, but it is far more likely that the costs of building a new Town Hall elsewhere can be more accurately estimated and that these costs would be significantly lower than those for renovating the existing building. Recent building projects support this view.

Oak Bluffs was able to build its library, a 15,000 sq. ft. building, for $3,800,000, or roughly $250/sq.ft. Chilmark built a 5600 sq. ft. Town Hall for $1,500,000, or $268/sq.ft. Is there a reason why we could not build a new Town Hall for $300/sq. ft.? At that rate a 6500 sq.ft. building, which should provide adequate space for our Town employees for twenty or thirty years, would cost $1,950,000, which, I would argue, would be a heck of a lot less than other alternative ways of housing the Town employees. We have an obligation to provide our Town employees good working conditions. We also have an obligation to our taxpayers. Building a new Town Hall is the most effective way of meeting both obligations.

So, let’s accept reality. It’s time to get the show on the road. Sell the current Town Hall to the Preservation Trust. Build a new Town Hall of which we can all be proud on land now owned by the Town in North Tisbury.

A Russian Catastrophe

Because of a bureaucratic snafu, Russian vodka distilleries are closed. It seems that the government decided new stamps needed to be issued. Unfortunately, they could not produce them very quickly. As a result, most of the distilleries are shut down. However, bootleggers are trying to fill the gap. Unfortunately, a certain amount of the illegal vodka is deadly; last year 40,000 people died after drinking this rotgut.

A likely star

Yesterday's Boston Symphony concert included a seldom performed work by Beethoven, Concerto in C for piano, violin and cello. For me it was the highlight of the all-Beethoven concert largely because of the dynamism of the piano player, a twenty-five-year-old kid named Jonathan Biss. He was so enthusiastic I was convinced that he would catapult himself from the piano bench. But he was more than enthusiastic, he was very good. Imagine being twenty-five and appearing not only with the BSO but with most of the major orchestras in this country as well as several abroad. It looks as though we'll be hearing more from him as time goes by.

The violinist, Miriam Fried, playing a 1718 Stradivarius, was also a 'showman'. At times, she seemed to be in a wrestler's crouch. In addition, she was quite talented.

Come to find out when I read the program, Miriam is Jonathan's mother. He got his talent from his mother and his father, Paul Biss, who is also a well-regarded violinist.

Find your favorite

The Associated Press has listed all of the cuts proposed in Bush's FY07 budget.

More of the story

The NY Times reports today on some of the findings of the two Congressional committees investigating givernments' efforts to help in the Katrina hurricane. It's not a pretty picture. Here are some of the findings reported:

"Federal officials knew long before the storm showed up on the radar that 100,000 people in New Orleans had no way to escape a major hurricane on their own and that the city had finished only 10 percent of a plan for how to evacuate its largely poor, African-American population.

Mr. Chertoff failed to name a principal federal official to oversee the response before the hurricane arrived, an omission a top Pentagon official acknowledged to investigators complicated the coordination of the response. His department also did not plan enough to prevent a conflict over which agency should be in charge of law enforcement support. And Mr. Chertoff was either poorly informed about the levee break or did not recognize the significance of the initial report about it, investigators said.

The Louisiana transportation secretary, Johnny B. Bradberry, who had legal responsibility for the evacuation of thousands of people in nursing homes and hospitals, admitted bluntly to investigators, "We put no plans in place to do any of this."

Mayor C. Ray Nagin of New Orleans at first directed his staff to prepare a mandatory evacuation of his city on Saturday, two days before the storm hit, but he testified that he had not done so that day while he and other city officials struggled to decide if they should exempt hospitals and hotels from the order. The mandatory evacuation occurred on Sunday, and the delay exacerbated the difficulty in moving people away from the storm.

The New Orleans Police Department unit assigned to the rescue effort, despite many years' worth of flood warnings and requests for money, had just three small boats and no food, water or fuel to supply its emergency workers.

Investigators could find no evidence that food and water supplies were formally ordered for the Convention Center, where more than 10,000 evacuees had assembled, until days after the city had decided to open it as a backup emergency shelter. FEMA had planned to have 360,000 ready-to-eat meals delivered to the city and 15 trucks of water in advance of the storm. But only 40,000 meals and five trucks of water had arrived.

Representative Thomas M. Davis III, Republican of Virginia, chairman of the special House committee investigating the hurricane response, said the only government agency that performed well was the National Weather Service, which correctly predicted the force of the storm. But no one heeded the message, he said.

"The president is still at his ranch, the vice president is still fly-fishing in Wyoming, the president's chief of staff is in Maine," Mr. Davis said. "In retrospect, don't you think it would have been better to pull together? They should have had better leadership. It is disengagement."

Progress? What Progress?

Yesterday five senior officials, including people from GAO, AID and the Iraq Reconstruction Inspector General, reported to the Senate Foreign Relations Committee on the progress being made with regards to the Iraqi infrastructure. Despite having spent at least $16 billion, the picture does not look good.

Before the war, 2.6 billion barrels of oil were produced daily; as of the end of last year, that number was 2.1 billion. Before the war half the population had drinking water; as of December 31, that percentage was 32%. Before the war 24% had sewage facilities; now it's 20%.

The only improvement was in the availability of electricity outside of Baghdad; they now have 10 hours a day versus 4 - 8 hours previously. However, in Baghdad the situation is worse than before: 4 hours a day today versus 16 - 24 hours previously.

Yes, we eliminated Saddam Hussein. But are we creating more Saddams? When will the costs to the Iraqi people and to this country be recouped and real progress start to be made?

A broken government

It's been almost six months since Katrina wrecked the lives and homes of thousands of people in Louisiana. Many of these people are still waiting for their governments - local, state and federal - to deliver on their promises and fulfill their obligations to their citizens. 135,000 families have asked for a trailer, less than half have been able to move into one. Today, 19,000 trailers are in staging areas, rather than being occupied by human beings. One company that usually sets up six trailers a day can only set up two in Louisiana because the paperwork is wrong more than half the time.

What is reality?

Omnicom, the largest advertising holding company in the world, created an off-balance-sheet entity, Seneca, in 2001 and sold to this entity sixteen of the companies Omnicom owned. Omnicom had paid $128 million for these companies but when the sale was made the companies were valued at $38.6 million. Did Omnicom lose money on the sale? It didn't think so as it did not record a loss and, apparently, its auditors, KPMG, agreed with them.

Seneca was housed in Omnicom offices. Omnicom employees ran Seneca. Seneca could not sell 'its' assets without Omnicom's permission. Did Omnicom control Seneca? Omnicom says no.

Is there such a concept as reality for the people who run Omnicom?

Bush does not like the 'C' word

That's C for conservation. Now that some people have had a chance to look into some of the budget details there is concern that Bush's energy program is more talk than action.

Finally blossoming

My wife bought these flowers (amaryllis) around Christmas. They have blossomed over the past week.

A strange way of counting

Why, when the number is known, is there such a thing as a supplemental budget? The proposed 2007 budget does not include $50 billion planned to be spent on our wars; it will be part of the supplemental budget. It's as though I don't include the costs for a vital item, such as heating oil, in my personal budget. Who's kidding whom?

Good to see at least one social program was not cut

Bush's proposed FY2007 budget may cut money for school kids, heating for the poor, medicaid and a host of other social programs, but thank the Lord that it does not cut funds for abstinence programs. $204 million is budgeted for this boondoggle. The budget also calls for $184 million given to faith-based and community organizations for HIV/AIDS medicines. Will this program be treated like similar programs to foreign countries? That is, you don't get the money unless you push abstinence.

Another mind blower

Gonzales, our Attorney General, did not testify under oath yesterday. Why would our top legal officer be unwilling to swear that he was telling the truth? Why would our senators let him get away with this?

Last week my wife picked these 'pods' while on her morning walk. We were gone for the weekend and left them on a kitchen cabinet. When we returned several pods and their seeds were scattered on the floor. We were convinced that someone had been in the house.

However, as I was catching up on my e-mail, I heard a crack in the kitchen. I found a 'pod' on the floor. The pods had exploded over the weekend and continue to do so tonight.

Neither my wife nor I know what these 'pods' are. Do you?

It's a changed world

I'm sure that most people of my generation would be amazed to learn that some schools are now rewarding kids for attending school. For example, Chelsea High pays kids $25 for each quarter of perfect attendance. A 9-year-old in Hartford, a city that has had many hard years, won $10,000 in a raffle for kids with perfect attendance. An evening school student in Texas won a new truck.

Part of the reason behind these incentives is money for the school districts. Some states give more money to schools with better average attendance rates. But a larger part seems to be an ethos that says people only doing things for money. That's an ethos I don't accept.

I know many of the kids in Chelsea and other poor cities don't live in two-parent families, but it seems to me that meeting one's basic obligations (e.g., going to school every day) should be something that is taught to everybody, no matter how many parents they have,

Controversy Spurs Competition

Last year the League of Women Voters cancelled their Candidates Night because there was only one contest in the Town election, that for Tree Warden. This year's Candidates Night will be held; there are already two major contests and there is still time for entering a race.

The Graham case has spawned a three-way race for Assessor. The candidates are the incumbent (Mike Colaneri), a Selectman (Glenn Hearn) and a gadfly (Jonathan Revere). More may enter this race.

The Graham case has also indirectly resulted in a race for Selectman between Skipper Manter (the incumbent) and James Alley (who was Selectman in the '60s). Mr. Manter became Selectman by beating James Alley's brother, John (who is also the chair of the County Commission).

West Tisbury is a small town and it's been hard to get new people to run for office. But, this has been a busy year for controversy in Town. In addition to the Graham case there has been a lot of talk over a new Town Hall.

More money from the Dukes County taxpayer?

The local newspapers report that the newly appointed airport manager is threatening to sue the County Commissioners for their failure to honor the contract he signed with the Airport Commissioners. Last year the former manager and assistant manager of the airport sued to make the same point. They won and a $900,000 triple damage judgment was entered against the county, which has appealed the judgment.

How much this latest case will cost the taxpayers is unknown. But, it does look as though there will be a question on the November ballot asking whether a board should be appointed to once more investigate whether we should continue to have a county government. I haven't studied the matter extensively, but sense that the problem is not the form of government, it's the people elected as commissioners.

'Mistakes' happen all the time

"The officers made a good faith, but mistaken effort to enforce an old unwritten interpretation of the prohibitions about demonstrating in the Capitol,” Capitol Police Chief Terrance Gainer said in a statement late Wednesday, referring to the arrest of Cindy Sheehan and the ejection of a congressman's wife for also wearing a tee shirt with a slogan on it. Whatever happened to 'free speech' and taking the consequences of exercising that right?

Would the public reaction have been negative towards Shhehan if she did try to disrupt the speech? I suspect it would have. This incident seems to have been a mistake for the administration.

You know what they say about "assume"

Foreign Policy's web site reviews some of the assumptions that are typically made about Islamist terrorists and finds many of them unsupported.

The one that initially surprised me was "Fixing the Israel-Palestinian problem will make (Islamist) terrorism go away." The authors refer to the number of places where Islamist terrorists have been active for, the authors feel, local reasons: Caucasus, Balkans, Philippines, Kashmir, Algeria, Russia. When you look over the list, you have to agree that there is a strong likelihood that solving the Israeli-Palestinian issue will not stop these movements.

Another assumption that seems untenable is "young, unmarried males are the most likely to become terrorists." The largest single group of suicide bombers are the Tamil Tigers; 40% of their bombers have been female. And, again, we've seen married terrorists act against the West.

Looking at the 9/11 attackers and others around the globe it seems unlikely that "poverty, unemployment and lack of education make terrorists". The poor are too busy trying to survive and the uneducated lack the skills needed by what are becoming extremely sophisticated networks.

There are assumptions that the authors believe valid: "Perceived threats to Islam create support for terrorism." and " Disenchanted, angry Muslims in Europe and North America are potential terrorist recruits."

A .250 and maybe higher batting average

Ignoring Iraq, how did the President do on his four major proposals.

His idea to boost money for education in the sciences and grant R&D tax credits is something that is really needed if we are to remain competitive.

Give him credit also for his emphasis on making us less dependent on oil although it has been heard before from many others. Ethanol, nuclear and alternative sources of energy are all noble desires. But what about conservation and higher gas mileage standards?

Better medical technology is needed, but this idea goes back to the 1960s when I can recall GE having a company called Meditech(?) that was going to change the way hospitals worked. With companies cutting way back on their pension and health benefits we may be approaching the time when a single payer system (i.e., the government) is needed. We have such a plan for us old folk; it's called Medicare and it works quite well from my consumer viewpoint and that of my contemporaries. Its administrative costs are 8%, while those of the health insurance industry approach 25%. What could we do with the 17% difference?

His aim to make the tax cuts permanent is a very large strikeout in a clutch situation. Unfortunately, such a move would ensure that most of us won't make it home.

Show of the Week

Last night's State of the Union address was like a stage performance, with one speaking role and many extras. One advantage of being an extra was that you could do your daily exercise while on stage. An observer from outer space would have to think that something was wrong with the people who could not decide whether to sit or to stand.

Of course, this was a very posh play. Proper dress was required. How else explain the arrest of Cindy Sheehan because she wasn't dressed properly? She did have a ticket. She was invited by a member of Congress. She was not acting boisterously. Fear that she might disrupt the play was more important, I guess, than granting her her rights as an American citizen.