How could Unisys have performed so poorly?

The Transportation Security Agency (TSA) awarded Unisys a $1 billion contract to provide telecommunications and information technology to improve security at our airports. The Inspector General of the TSA found that Unisys took the money but did not provide much of the equipment and services. What equipment was provided was antique; cell phones had a mechanical bell that rings. Furthermore, the delivery date of November 19, 2002, was missed by almost two years.

AntiSemitic?

There has been a fair amount of controversy about a paper, "The Israel Lobby", that has appeared in various forms. The London Review of Books is where I read the version referenced in the opening sentence. Since the paper was written by holders of endowed chairs at Harvard and the University of Chicago and the paper argues that the "Israel Lobby" is responsible for the fact that the US has "been willing to set aside its own security and that of many of its allies in order to advance the interests of another state"(Israel), it has attracted a good deal of attention from a variety of people ranging from David Duke to Marvin Kalb to Al Jazeera. The Committee for Accuracy in Middle East Reporting in America (CAMERA), a pro-Israel US-based organization, published their rebuttal of the paper earlier this week.

Trying to decipher the Mid-East situation has been a lifelong occupation of many people smarter and more experienced than I. However, it is clear that Israel occupies a special position within our government's interests. The professors argue that this is due to the fantastic success of the Israel lobby, especially the American-Israel Public Affairs Committee (AIPAC). Their opponents seem to agree that they have a strong lobby, but that Israel's special status is justified and is good for the US.

For me, the issue is not whether there is a lobby or not or even whether that lobby, if it exists, is controlled by Israel. The issue is what is the result. Is the result good or bad for the US?

Treating Allies roughly equally seems to make sense to me. But here's what the professors say about the foreign aid we provide to Israel:

Other recipients get their money in quarterly installments, but Israel receives its entire appropriation at the beginning of each fiscal year and can thus earn interest on it. Most recipients of aid given for military purposes are required to spend all of it in the US, but Israel is allowed to use roughly 25 per cent of its allocation to subsidise its own defence industry. It is the only recipient that does not have to account for how the aid is spent, which makes it virtually impossible to prevent the money from being used for purposes the US opposes, such as building settlements on the West Bank. Moreover, the US has provided Israel with nearly $3 billion to develop weapons systems, and given it access to such top-drawer weaponry as Blackhawk helicopters and F-16 jets. Finally, the US gives Israel access to intelligence it denies to its Nato allies and has turned a blind eye to Israel’s acquisition of nuclear weapons.

The rebuttal makes no mention of the above.

The professors claim "Since 1982, the US has vetoed 32 Security Council resolutions critical of Israel, more than the total number of vetoes cast by all the other Security Council members. It blocks the efforts of Arab states to put Israel’s nuclear arsenal on the IAEA’s agenda." There is no mention of this in the rebuttal, yet I'd have to ask questions about this if I were leading an Arab state.

Another claim that goes unanswered: The terrorist organizations that threaten Israel do not threaten the United States". Do we gain any advantage from Israel killing PLO terrorists?

The rebuttal is organized around several topics, the first of which asks why does America support Israel. The answer, in their minds, is because Israel joined America in supporting King Hussein when the PLO attempted to overthrow him in 1970; none of our other allies did. Hence, we learned the value of a strong Israel. This seems a weak answer to me. Is this the only reason they can come up with in the 58 years of Israel's history?

The second question: Has support for Israel damaged US interests, or caused terrorists to target us? Here, they are on a little - just a little - firmer ground as part of the Islamist terrorists arguments are based on our support of Saudi Arabia and similar states. Does the Israeli treatment of the Palestinians calm or inflame terrorists?

It is also clear, to me anyway, that the Palestinians have suffered at the hands of the Israelis. Yes, the Palestinians have conducted intifadas, but what would your reaction be if you were forced out of your home?

The problem is that we have reached a stage where we are afraid to tell it like it is. Israel has made many errors, as have most nations in the world. We should be able to point out those errors and not be accused of antisemitism, as we should be able to point out the errors of the US and not be accused of being anti-American.

Redefinition seems to be endemic to this administration

I've written several times about the Bush administration's cavalier 1984 attitude toward words. Now they seem to be doing it with numbers. This paper by Jared Bernstein and Arloc Sherman dissects the latest report by the Census Bureau on the poverty level. Basically, the Bureau is using different ways to measure poverty; these new ways result - surprise! - in a lower poverty rate than the 12.7% reported earlier this year. In fact, the rate drops by better than a third to 8.3% with the new measures.

Fundamentally, the Bureau does not use comparable numbers in measuring income and poverty threshholds. For example, they treat your home equity as income but do not raise the poverty line to reflect the full cost of housing for home owners and renters. Nor do the new measures include the cost of child care in calculating one's expenses, thus the income your wife earns is not offset by the money you pay for child care while she is working. Also, your out-of-pocket medical expenses don't figure in the new calculation although they were counted in previous calculations.

What happened to the idea of calling a spade a spade?

Who is being quoted?

"Our power, then, has the grave liability of rendering our theories about the world immune from failure. But by becoming deaf to easily discerned warning signs, we may ignore long-term costs that result from our actions and dismiss reverses that should lead to a re-examination of our goals and means."

"We can more easily destabilise friends and others and give life to chaos and to avowed enemies than ensure outcomes in service of our interests and security."

"We are well advanced into an unformed era in which new and unfamiliar enemies are gathering forces, where a phalanx of aspiring competitors must inevitably constrain and focus options. In a world where the ratios of strength narrow, the consequences of miscalculation will become progressively more debilitating. The costs of golden theories will be paid for in the base coin of our interests."

"A few brief years ago, history was proclaimed to be at an end, our victory engraved in unyielding stone, our pre-eminence garlanded with permanence. But we must remember that Britain's majestic rule vanished in a few short years, undermined by unforeseen catastrophic events and by new threats that eventually overwhelmed the palisades of the past. The life of pre-eminence, as with all life on this planet, has a mortal end. To allow our enormous power to delude us into seeing the world as a passive thing waiting for us to recreate it in an image of our choosing will hasten the day when we have little freedom to choose anything at all."

Sound like a Bush detractor to you?

It's Henry Hyde, long term Republican Congressman from Illinois.

Convergence in France

Iliad, a new French telecom company, offers its customers 81 TV channels, VOIP and broadband access at 24 Mbps for $36 a month. I pay $134 a month for 100+ TV channels and broadband access at 1.5 Mbps. What's wrong with this picture in the land where the Internet was born?

Kentucky Acts

Kentucky has just passed a law limiting how close the idiots from Westboro Baptist Church can get to the funeral ceremony of Iraq veterans who have died for us. These Baptists feel that the dead veterans are God's punishment for the US' harboring of homsexuals.

How it is today

For a wonderfully illuminating and well-written article on the difficulties of the press in Iraq, which indirectly raises questions about the reporting of the war, read "Baghdad: The Besieged Press" by Orville Schell in the current NY Review of Books. He concludes the article with this:

"It may well be that the besieged American press in Iraq will find that the main story is not about Americans fighting Iraqi insurgents, but Americans standing powerlessly aside in their armed compounds, Green Zone, and military bases, watching as Iraqis kill other Iraqis and the country disintegrates. It would be all too ironic if this were the result of the invasion of March 2003, which was promoted as a critical step in bringing peace to the Middle East."

Being an Asshole is not restricted to the GOP

The Smoking Gun has infiltrated the Kerry camp. I wonder what Clinton's demands are.

Civil War?

Maybe not yet in Iraq but reading this piece by Jeffrey Gettleman and listening to the accompanying slide show certainly makes one think that it is very close. Gettleman writes of the fundamental change that has occurred in the year he was away from Iraq: the Iraqis seem more interested in shooting each other than shooting the US troops. He writes of a land that has become an armed camp where even kids carry guns and people ride the bus carrying a loaded pistol.

I don't pay much attention...

to Bush's seemingly daily speeches, which are largely divorced from reality. But, I though E.J. Dionne's comments on one of last week's speeches were spot on, particularly since it's another example of avoiding reality.

You're on your own

Apparently throwing in the towel on our reconstruction efforts, Daniel Speckhard, Director of US Iraq Reconstruction Management Office, has told Iraq that it can no longer count on US money to fund its reconstruction efforts, which are estimated to be in the $70 - 100 billion range. We have kickstarted their economy (or so we claim) and now it's up to Iraq and other countries to complete the job.

One would hope that Iraq does not use our reconstruction efforts as a model to follow. Talk about screw-ups, mismanagement and waste of money; our reconstruction efforts are prime examples of these failures.

Our wonderful economy

Hale Stewart in the Blogging of the President has a trenchant analysis of what is wrong with our economy.

Another Nice Story

This is from my friend, Naina Williams.

Many of us have things we say we would like to accomplish in our lifetime, but how many of us actually do them? This June, one of our esteemed board members, the Rev. Dr. Jerry Fritz of the Federated Church, will embark upon the journey of his lifetime! Jerry plans to cycle approximately 1,650 miles to raise funds for Habitat for Humanity of Martha’s Vineyard (HFHMV)!

With his jovial laugh and an effervescent personality; it is hard to not be smitten with him and succumb to his passion for whatever cause he is embracing because his sincerity and enthusiasm are infectious. As a matter of fact, during the interview for this article, almost everyone in the coffee shop we met at seemed to know Jerry and approached our table to greet him. One person actually probed him as to what he was doing and Jerry’s eyes lit up as he devotedly spoke of his upcoming trip. Prior to any promotional material being written or final plans being made, a check for $500.00 was written to HFHMV in support of what we have dubbed “Jerry’s Journey for Habitat”!

For those who do not know Jerry, bicycling has been a passion of his for more than twenty years. To quote Jerry, "For me, biking has always been more than just a means of transportation or a way to keep physically fit; it is a spiritual experience.”

Habitat for Humanity and particularly the local affiliate have also been a passion of Jerry’s for many years. “I believe in Habitat’s mission as it strives to eliminate substandard housing on Martha’s Vineyard and around the world, and in the process, build stronger families and a strong community.”

On June 5th, Jerry will leave the Island and fly to his hometown of Fremont,Nebraska, from where he will begin his ride across the country back to the Vineyard. He plans to ride for approximately 75 miles each day and hopes to stop at local Habitat affiliates along the way. During these sojourns, Jerry hopes to meet with and talk to Habitat homeowners and ask each of them what their living conditions were like prior to Habitat’s intervention and how owning a Habitat house has changed their life. His ultimate goal is to inform people through a future edition of Habitat Headlines and other publications on how people are living in our country and how Habitat can make a difference in their lives!

Jerry cares about so many different things and, being the true giver he is, has been involved with many charitable causes on the Island. Recently, he found himself resigning from several boards in order to focus his energy and be fully committed to Habitat for Humanity of Martha’s Vineyard. He has been involved with the organization since 1990 in both Ohio and in Maine and has been involved with the local affiliate since his arrival here in 1999.

As the chair of our Family Selection Committee, Jerry and his committee members have the difficult task of sifting through the many applications received for consideration of a Habitat house. “It hurts to read about and ultimately see the conditions some of these families live in right here in this place of such beauty and opulence,” said Jerry with a frown upon his face. He continued, "All they want is a chance to have a place of their own!”

Jerry will not make this long trip alone! Fellow Vineyarder and friend, Chuck Hughes, intends to also ride for his favorite Island cause, the YMCA. Chuck will begin his journey in Minnesota and the two plan to meet up in Clinton, Iowa, to continue their ride back to Martha’s Vineyard together. Others have said they will ride a day or longer along the way, but the monumental feat of cycling over 1,600 miles will be undertaken by these two 63-year old gentlemen who serve as an inspiration to all of us!

“I ask that you find it in your heart to support me as I merge my passions of bike riding and HFHMV. As I trek from Nebraska to the Vineyard on my bike, I will be significantly more inspired to meet the rigors of this trip knowing that together we will be assisting Habitat to help our Island neighbors in need of simple, decent, affordable housing! The work that they do speaks for itself and the families they have helped speak volumes. But the reality is that they cannot do the good work they do without the financial support from good people like you!”

Jerry’s trip has been fully paid for by one of his parishioners, so all money coming in goes directly to HFHMV. If you would like to lend your support to “Jerry’s Journey”, please complete the following form and send it in along with your contribution to Habitat for Humanity of Martha’s Vineyard today!

Habitat for Humanity of Martha's Vineyard can be reached at 508-696-4646 or www.habitatmv.org.

It's Saturday and time for a "feel good" story

Have you heard of the Initiative to Educate Afghan Women? It was started in 2002 by Paula Nirschel as her response to 9/11. What the Initiative does is pay travel expenses for Afghan women to go to college in the US. The Initiative asks the college to pay all the other bills. To date, twenty women have been accepted by ten US universities, Duke, Middlebury, Mt. Holyoke, Juniata, Kennesaw State, Montclair State, Roger Williams, Simmons, Montana and Richmond.

But the program is more than a free college education. The women have to spend the summer in Afghanistan working for an organization involved in rebuilding their country. Most importantly, the students must return to Afghanistan when they graduate. And, graduate they will as none has a GPA less than 3.5.

One person. One idea. At least 20 more people in the world who have been given an opportunity to make this a better place. Not a bad thing to think about on a dreary almost Spring morning!

Magic? Or Alchemy?

I've spoken before about the problems of the Pension Benefit Guaranty Corp. (PBGC), problems which today affect many laid off or retired workers, problems that will eventually affect us. Most of these problems are the result of underfunded pension plans. How these plans became underfunded was the subject of the last speech given by Bradley Belt, Executive Director PBGC, before submitting his resignation earlier this week. His speech was entitled "Through the Looking Glass: Adventures in Pension Land".

Pension accounting rules are one reason for the underfunding. According to these rules, a company can book the expected return on its pension assets. That's right, the word is 'expected', not actual. So, if the plan's managers determine that the pension assets should have an expected return on 10%, then the company can book that expected return, not the actual return. For example, let's say Joe's Airline had pension assets of $50,000,000. Joe figures he should get a return of 10% on these assets. Ergo, he can book a profit of $5,000,000. This can be done even if the assets have declined in value during the year. Make sense to you? Realistic accounting? I think not.

Smoothing is another accounting technique that screws the worker. Here the company can take part of its pension losses over time rather than when these losses occur. Thus, my pension fund can be hit by a $5,000,000 loss this year, but I need take a hit of only $1,000,000 this year and need not tell the workers of the full $5,000,000 hit.

Companies need to compute the present value of their pension liabilities. That is, what is the amount of money they need today to meet their obligations some years hence. The companies do not have to predict tomorrow's interest rates; they can use the four-year average of a corporate bond index. As Belt says, "This is akin to driving down the highway at a high rate of speed looking only in the rear-view mirror."

One example of the "magic" wrought by this approved accounting is Bethlehem Steel. When it went bust, it owed business creditors $1 billion; its workers were owed $7 billion in unfunded pension debt.

Yes, our legislators will soon have a revised pension funding bill. Will the bill demand more realistic accounting?

Sure, I'll sign it

but then I'll give you my version of what I've signed. That's what many Presidents have done when they issue a "signing statement", where they give their interpretation of the legislation they have just signed and placed into law.

It seems a bizarre practice to me. For example, Bush's signing statement relative to the Patriot Act says that he will withhold information required by the Act if, in his judgment, disclosing it would "impair foreign relations, national security, the deliberative process of the executive, or the performance of the executive's constitutional duties". So, even though I'm signing this Act, which says I have to give you information about how the powers in this Act are being used, I will violate this Act and not give you this information if I don't think you can handle it.

Another icon may bite the dust

The word on the street is that Lucent is in talks to be acquired by Alcatel. Lucent, which was spun off from the old AT&T, included Bell Labs, a leader in scientific innovation for decades. Alcatel is a French manufacturer of telephone equipment.

Will the jingoists try to derail this deal? After all, France did not support our Iraq adventure.

Here's my order

When I book a hotel room, I really don't request much: a clean, safe, quiet room. But then, I'm not the Vice President or a high muck-a-muck in some large corporation. Apparently, Mr. Cheney has needs beyond mine and makes them known to the hotel staff prior to his arrival. It's great if you can get away with it, but it's just another sign of the imperial presidency, or vice presidency as the case may be.

A Strong Girl

A four year old overpowered three policemen and freed her father from jail. So says the BBC. Something is really weird in this case.

More 1984

A great analysis of the administration's use of words can be found in CJR Daily.

It's a great country. Isn't it?

Now comes Steve Vaught, the next American celebrity. He's already reached the pinnacle as he has been interviewed by Oprah. Of course, there's a book deal and a web site (with 700,000 hits a month) and offers to promote products.

What has Steve Vaught done? Well, he's walking across America to lose weight. Last April he was, at 400 pounds, seriously overweight. As a 39 year old father of young children, he realized he was in danger of dying from obesity. So, more power to him, he decided to do something about it: walk it off. Thus far, he's walked from California to Ohio on his way to the Big Apple.

Picking and Choosing

Like most of us, Derrick Jackson, a Boston Globe colunnist, selects quotes that buttress his case. In this case he uses a telling quote from Lyndon Johnson to reinforce his contention of the similarities berween Iraq and Vietnam. Granted that there are similarities, but I don't recall religion and ethnicity being the "be all and end all" in Vietnam it appears to be in Iraq. Wolfowitz is also quoted to damning effect.

Advice in the Persian New Year

Here's another easy way to get to heaven.

Israeli turkeys and chickens are doing God's work

Another nut case spouting hatred and justifying it in God's name.

An engineering-oriented company

Should medical device manufacturers be driven more by engineering or medical considerations? Guidant Corporation, which came down on the engineering side on this question, was scolded for doing so by an expert panel it had commissioned to analyze its handling of defects in its equipment. The panel said that "under no circumstances should a potential or manifest risk of preventable death be superseded by statistical analyses."

It remains to be seen whether Guidant will follow the advice of the panel, particularly as the company has been bought by Boston Scientific, which has also had problems with its devices.

More fault-finding with Northfield Labs

This time it's a couple of ethics professors who feel that Northfield's current trial of its blood substitute, PolyHeme, "fails to meet ethical and regulatory standards."

Every week another damaging article appears. I wonder if the short sellers are mounting a campaign.

The Marginal Productivity of CEOs

That's why the compensation package of the typical CEO is so bountiful, their marginal productivity. Why it's gone up almost 8 times since the 1970s. Then, the average CEO was paid about 40 times more than the average worker. Now, it's 300 times the pay of the average worker.

The preceding is John Snow's reading of the growing gap between high-paid and low-paid Americans. Snow is the Treasury Secretary whose marginal productivity is helping us to break trade and fiscal deficits every year.

Snow's interview in the Wall Street Journal signals another PR push by the administration. This time it's a push to make us realize how well off we are. If you believe that the average American is better off today than he was five years ago, I have a bridge over here that you may want to buy.

Guess what they're doing

From the Boston Globe, Irish step dancing at the St. Patrick's Day party in South Boston, where on this day everyone is Irish. The girl in the center is 3.

Is this the nadir?

I know it's very hard to maintain a level of excellence in any endeavor, particularly if the endeavor involves creativity. The Sopranos is a case in point. The quality has been lowered over the past couple of years. But tonight's episode was really, really bad.

The TV critics have apparently decided to give the show a free ride this season, as they have been nothing but boisterously enthusiastic about the show for the past few weeks.

Know Your Enemy

This is an article in today's Boston Globe that is worth reading.

"The humanization of pets..

is the single biggest trend driving our business," says the head of Del Monte's food and pet division. This is manifested in new lines of dog food that include roasted chicken with pasta and carrots, or simmered beef with wild rice and spinach or roverioli (ravioli for dogs). And it's not only food. How about Gucci coats, spa treatments, $500 food bowls, jewel-encrusted collars?

Beating the odds

Some people are just born lucky. Take Jeffrey Rich; the odds were 300 billion to 1 against him but he succeeded. Louis Tomasetta is another lucky guy; he beat 26 billion to 1 odds. Kobi Alexander wasn't as lucky; he defied odds of only 6 billion to 1.

Compared to those three, the following three are just average risk takers. William McGuire cashed in although the odds were 200,000,000 to 1. Robert Therrien beat odds of 9,000,000 to 1. Timothy Main scored although the odds were 1,000,000 to 1 against him.

Who are these guys? What did they win? How did they get so lucky? Well, they're all CEOs or ex-CEOs of public companies. They won a perfect date to receive stock options: the day when the stock was at a nadir and poised for growth. How they got so lucky is the question? Given the odds of their picking the exact day each year (for several years in a row) on which their gains would be maximized, there appears to be only one answer: backdating the granting of the options.

Note that the odds of winning the Powerball lottery are 146,000,000 to 1.

What accounting errors will GM announce next quarter?

Yesterday, they bumped the 2005 loss up to $10.6 billion, an increase over the $8.6 billion loss announced earlier this year. They bumped the restructuring charges by $400 million, their Delphi exposure by $1.3 billion and their goodwill impairment charges by $439 million. And then they've got another $500 million in misapplied cost of sales to account for at some point.

How long more will they last? Will Toyota change its name to GM when they buy the company as SBC changed its name to AT&T? Or will the GM name be worth nothing by then?

21st Century Parenting

Apparently some parents of recent college graduates feel that their children are incapable of being on their own. Today's Wall Street Journal reports on a wide variety of companies, from GE to Vanguard to Pella to Ferguson Enterprises, who have found a candidate's parents seriously involved in the hiring process. I'm not talking about the parent's giving their kids their advice. Today some parents accompany their kids to the interviews. Others try to negotiate the deal. Others make the opening call.

It's a heck of a different world out there.

You need more than size

Apparently, the Mass. Department of Education and the Governor are moving to consolidate smaller school districts in the belief that smaller districts will have greater difficulty providing quality education, given their funding problems.

Consolidation has occurred here on the Vineyard with mixed results. The high school, the consolidation of which was debated for perhaps forty years, has worked out well: the education is of high quality and the costs are reasonable. The Up-Island Regional District has not worked out as well. Yes, the educational quality is high, but the costs are quite high (highest on the Island, among the ten highest in the state). The difference between the two is management. The high school was well-established before a new Superintendent of Schools took over about a dozen years ago. The Regional District was established under the control of the new Superintendent, who failed to control costs.

You never stop being surprised

Did you know that the heat in Chinese people's houses is largely supplied by the government? That's a surprise to me. But an even larger surprise is that the heat is only available to those living in North China, and that only for a limited time of year, usually November 15 to March 15. If you live in the South, where temperatures can drop to 0 and average in the low 40s, the state does not supply heat. Long johns are big sellers!

How not to manage

Foreign Affairs' May issue will feature an article based on a military study of documents and people that became available after the fall of Baghdad. The article was written by some of the key participants in the U.S. Joint Forces Command (USJFCOM) Iraqi Perspectives Project. The article portrays Saddam as someone with a very different sense of reality who managed a bunch of sycophants (which was probably necessary if they did not want to be executed for disagreeing with Saddam). A few interesting excerpts:

• The single most important element in Saddam's strategic calculus was his faith that France and Russia would prevent an invasion by the United States.
• An internal revolt was Saddam's biggest fear.
• Saddam and those around him believed virtually every word issued by their own propaganda machine.
• Concerned about everything except fighting wars, the Iraqi military...became focused on militarily irrelevant issues.
• Even with his regime under dire threat, Saddam's thoughts were never far from the regional power balance.
• Everyone around Saddam understood that his need to hear only good news was constantly growing and that it was in their best interest to feed that hunger.
• One was the requirement to embellish even the simplest message with praise for Saddam.
• He made his most fateful decisions in isolation.
• The threat of another uprising constantly remained his top security concern.
• "The Special Security Office knew how many times I went to the bathroom."
• In the end, Saddam determined that the most important factor for military success lay in the spirit of the warrior.

You have to wonder how many other 'leaders' display such traits. It's probably a good thing that history is written by the winners, that is, if you are on the winning side. You don't want to know how weird your side is.

Xenophobia, thy name is Congress

Here are three more Dubai-based companies that support the U.S. Military:

• Inchcape Shipping Services services our vessels in most Southwest Asia ports, including the Middle East.
• Seven Seas Shipchandlers is the prime vendor for maintenance and repair operations for troops in the Middle East and elsewhere.
• MAC International supplies police trucks to the Army.

Why don't our Congressmen do something about these companies?

Changing his mind?

Reality sometimes does cause one to change his opinions. After years of ignoring our allies and going it alone, Bush, according to the NY Times, is ready to concede that maybe isolationism is not such a good idea.

I don't want to say "I told you so"..

but I wrote the following letter to the editor just about three years ago now.

Let me see if I have my facts straight.

1. Our government wants to attack Iraq in order to prevent a possible use of nuclear, biological and chemical weapons in the future.

But, Iraq does not now have nuclear weapons. North Korea, one of the axes of evil, does. Why don’t we attack them? It’s possible that Pakistan and India may go to war and use nuclear weapons. Shouldn’t we make a preemptive strike on them as the nuclear cloud may reach the United States? And, what about all those nuclear, biological and chemical weapons in the former Soviet Union? Might they not also be used against us some day in the future? Shouldn’t we eliminate that possibility now?

2.On September 11, 2001, we declared war on terrorism.

Will not a war with Iraq increase exponentially the number of potential recruits to Al Qaeda? We’ve been told that the war on terrorism is global. Will waging war against Iraq mainly on our own make it more or less likely that we will continue to receive cooperation from countries around the world, cooperation that is so vital in the battle against terrorism.

3.The estimates of waging this war approach $100 billion.

How much more will a protracted stay in Iraq after the war cost us? Yet, there has been no talk of the havoc this may wreak on our still fragile economy. Lyndon Johnson promised us guns and butter in his crusade in Vietnam. What did that do to our economy?

Add up the facts and only in George Orwell’s “1984” (where “War is Peace”) do they say this war makes sense.

I grew up in a day when Russia was supposed to attack us “very soon”. Our policy of containment eventually led to the elimination of this “very strong likelihood”. What is wrong with using such a policy against Iraq today?

How do you define 'cash flow'

Comcast doesn't believe that you should define it according to GAAP (Generally Accepted Accounting Principles). By their definition last year's cash flow was $8.5 billion; the GAAP definition was $4.9 billion. Just a small difference!

You really have to carefully - very carefully - read all the footnotes in a company's financial statements before investing a nickel.

Will they ever get it right?

For what seems like the umpteenth time Nortel is restating its earnings. This time it's an $866,000,000 error. That's the amount of revenue they booked prematurely. The company acknowledged "material weaknesses, ineffective internal control over financial reporting and ineffective disclosure controls and procedures". I thought those were the same problems they had a year or so ago.

A ticking time bomb?

Hale Stewart at Blogging of the President has another 'right on' article. This one is about the dangers implicit in the boom in sub-prime mortgages over the past several years. Chickens will be coming home to roost as interest rates increase.

Another agency questioning Polyheme

Since my initial posting about the blood substitute, Polyheme, two hospitals have suspended their participation in the study of the Northfield Labs product and the federal Office of Human Research Protections has told the FDA that it has "urgent ethical concerns". Still the company claims that they are "on strong scientific, ethical and legal ground".

How many more donations will we get?

Here are a few gifts that have come from Arab countries over the past year: from Saudi Arabia $20,000,000 each to Harvard and Georgetown; from Kuwait $25,000,000 to the Red Cross; from Kuwait, Qatar and UAE $100,000,000 for hurricane relief; from Qatar major gifts (in the $10-50,000,000 range) to Carnegie Mellon, Virginia Commonwealth and Cornell; from Dubai $1,000,000 to U Penn.

The person who evaluates donations by the Saudis says that the Dubai Ports flap "makes you think twice" and the attacks on the deal are "racist".

And, you think our elected representatives have done the right thing?

The Census Report on Aging

Those who believe that Social Security is not an important factor in the lives of the elderly should look at the report, "65+ in the United States:2005" released by the Census Bureau yesterday. A key line from the press release: "The proportion of people aged 65 and older in poverty decreased from 35 percent in 1959 to 10 percent in 2003, mostly attributed to the support of Social Security."

An oddity that appeals to me. What county has the second highest percent of old people? You'd guess someplace in Florida, but you'd be wrong. It's McIntosh County in South Dakota, where 34.2% of the population is 65 or over.

And a concern: In 1960 1.6% of older men and 1.5% of women were divorced. By 2003 the numbers had gone to 7% of men and 8.6% of women. And it looks like it will get worse as the divorce rate of people in their early 60s is almost double these numbers.

Mario is in trouble

The Justice Department has entered the case in which Mario Gabelli is being sued for fraudently obtaining licenses in FCC auctions. Previously, Gabelli had claimed that the fact that the government had not joined the case indicated that the case was weak. Now his lawyer says, "The government's conduct has been outrageous."

The Mysterious Mr. Wright

The scandal surrounding International Management Associates, which failed recently, is getting weird. The founder, Kirk Wright, is on the run but is able to communicate with the Wall Street Journal and his lawyer via cellphone. He did not admit to anything in the Journal interview published on Thursday. Mr. Kirk must have given the interview because he likes the limelight. Perhaps, the Journal published it just as another reminder of the dangers of investing in hedge funds.

Keeping our ports American?

Our ten largest ports have operators from China, Denmark, Dubai, Hong Kong, Japan, Singapore, South Korea and Taiwan. More than 60% of the container terminals at these ports are managed, at least in part, by foreign companies, some of whom are controlled by foreign governments.

The largest US company in these ports, SSA Marine, says,"We would be surprised if there were impacts to foreign commercial entities leasing terminals in the U.S. because of their successful track record."

How good is our health care system?

Here’s some interesting OECD 2004 health data:

	Canada	France	UK	US
Per capita health spending	$2,931	$2,736	$2,160	$5,267
Private share of spending	30%	24%	17%	55%
Life expectancy	79.7	79.2	78.1	77.1
Infant mortality/1000	5.2	4.5	5.0	6.8

We spend the most per capita on health care, more than half of which is privately funded. Yet, our life expectancy is lower and infant mortality higher than the countries shown.

In 2003 the administrative costs of Medicare were 2% of its total costs. In the same year, the administrative costs of private insurers were 13%.

Users of the Veterans Administration and Medicaid pay less for prescriptions than do users of private insurers because the VA and Medicaid bargain with the drug companies.

What’s wrong with this picture?

What's special about Iran?

I've been perplexed as to why Iran's attempt to develop nuclear technology is so much worse than the attempts (and successes) of India and Israel. I suspect it's because we consider India and Israel, but not Iran, allies.

If you were Iranian, would you want to be an ally of the US? We're the ones who overturned democracy in Iran in the 1950s by killing Mossadegh and installing the Shah. We're the country that is unable to leash the dogs of war we let loose three years ago. And now we're starting to get the dogs ready again, this time unleashing them against Iran.

The Year Didn't Start Very Well

January's trade deficit set another record - $68.5 billion. And the Administration continues to say these are the best of times.

Here's an example of our current port security

Could Dubai Ports World do a worse job of maintaining security than this?

Is Fox the network favored by Fundamentalists?

I don't watch it, so I don't know the answer to the question. However, I doubt that the Fundamentalists would have approved the network's coverage of the Oscars.

America First

This Dubai Ports deal and subsequent commotion has brought out the isolationists. There are now twelve bills aimed at 'protecting America's infrastructure' being introduced by our esteemed Representatives and Senators.

Perhaps, the most ridiculous bill is that sponsored by Representatives Hunter of CA (the same genius who wants to build a wall between the US and Mexico) and Saxton of NJ. Their bill would make it illegal for foreign companies to own or manage US critical infrastructure. The bill leaves the definition of infrastructure to the President, who, at one time, included agriculture and food as part of our infrastructure. If this bill passes and that definition of infrastructure is used, forget about drinking Poland Springs or eating Danone yogurt and a heck of a lot more things.

Not wanting to look unpatriotic but willing to look stupid, Senator Clinton has a bill to make the owning or managing of US ports by foreign companies illegal.

Where have these people been for the past sixty years when American companies were moving into most countries around the world? Where have these people been the past five years when the financing of our deficit has been done by foreign companies?

Changing, but not for the better

Richard Sennett had a depressing article in yesterday's Financial Times about the middle class in the new economy of the 21st century. Basically, the middle class is starting to disappear from this economy. Incomes are no better than they were fifteen years ago. Company benefits are disappearing. The focus on the moment means that long service and loyalty are no longer valued. Work is focused on projects that are usually short-term. The idea of building a career with one or two companies is gone.

Offshoring's impact on education

Alan Blinder, now of Princeton, has a very interesting article about offshoring in the current issue of Foreign Affairs. He categorizes offshoring as the third Industrial Revolution and warns that the impact on the world economy will be just as great as that of the first two revolutions, which saw people first move from farming to factory, and then from manufacturing to service jobs. Offshoring is seeing the migration of jobs from rich countries to poorer countries. Where it will end is still to be determined.

Many of us assume that the best defense against our jobs being exported is an educated work force. But, Blinder clearly shows that is not necessarily the case. For example, you would not think that medical jobs could be exported. Well, for most medical jobs, that is true. But not for radiologists, as more and more x-rays are being read by radiologists in India. Looking at the question from a slightly different viewpoint, one sees that many jobs that do not require educational credentials, such as taxi driver, will never be exported, while a lot of our computer programming work is now being done overseas.

Our question then becomes what kind of education should our kids and grandkids be getting to make them more marketable as the twenty-first century progresses.

Who said that?

"The whole Middle East is undergoing fundamental changes and Iraq will soon be a model of development and democracy for the entire region."

"Our aim is to create a healthy body politic, guided and controlled by healthy public opinion."

"The Iraqi government should be formed by the people themselves through a National Congress fully representative of the people."

No, it was not George Bush. The comments were made by various English statesmen 80 and more years ago when England began its League of Nations mandate to take over what was then Mesopotamia (or, as the Daily Show spells it and it soon became then and now, Mess-O-Potamia) and has now evolved into Iraq. The biggest problem then, as it is now, was a lack of security driven by sectarian militancy.

Didn't someone once say something to the effect that those who don't learn from the past are doomed to make the mistakes of the past all over again?

What don't they understand about the word 'no'?

I guess that, here in West Tisbury, I'm living in the 'interesting times' of the Chinese proverb.

I just watched the Selectmen's meeting referred to in an earlier post. The reporter missed or did not have space for another mysterious event that occured at the meeting. I'm referring to the scheduling by the Selectmen of a Special Town Meeting, at the same day and time of the Annual Town Meeting, for, as of now, the sole purpose of asking the Town to approve the appropriation of $36,000 to draw up detailed plans for renovating our ancient, hardly maintained Town Hall.

This request comes after the Town with a resounding vote refused to fund the $5.5 million requested at a November Special Town Meeting. At the first Special Town Meeting this year the voters strongly approved a resolution to kill the project.

Not only does the request for more money fly in the face of what the voters seem to want: the project being stopped. But the calling of a Special Town Meeting, although perfectly legal, was necessary because the warrant for the Annual Town Meeting closed on February 21. This Special Town Meeting is a way of getting around the legal restrictions surrounding the warrant for the Annual Town Meeting.

When I first moved here, Oak Bluffs was widely comsidered to have the worst government on the Island. Now, it looks as though West Tisbury is fighting to take over this title.

Give me your vote and I'll give you a pork rind

Campaigning in a small Virginia town.

Another China Sign

Every year the big European steelmakers negotiated with the big three iron ore companies on a contract for the coming year. This year, it's the Chinese steelmakers doing the negotiating as they now produce more than 25% of the world's steel.

Just one more FEMA screw-up

The General Accountability Office (GAO) issued another report last month on FEMA's response re Katrina and Rita. This one was on the Expedited Assistance program. Granted there was a heck of a lot of pressure to get money to people and there are always thieves among us. But you'd think that even with this pressure FEMA could have done better. Some examples cited by GAO:

• Almost half of those who received payment via debit cards also received a duplicate payment either by check or electronic transfer.
• GAO visited 200 damaged properties. Eighty of them were either vacant lots or non-existent apartments.
• FEMA's automated system often identified possibly fraudulent registrations. The manual process used to review these registrations ignored the warning.

Crying wolf?

There is more and more talk about our current account deficit, so much talk that I'm reminded of the old tale of the boy crying wolf. Remember that eventually the boy was right!

Sebastian Edwards of the National Bureau of Economic Research is the latest to do so in a (subscription-only) piece entitled "America's Unsustainable Current Account Deficit. Some quotes from that article:

• "Never in the history of modern economics has a large industrial country run persistent current account deficits of the magnitude posted by the US since 2000."
  
• "The results from this investigation indicate that major current account reversals have tended to result in large declines in GDP...These estimates indicate that, on average…the decline in GDP growth per capita has been in the range of 3.6 to 5 percent in the first years of adjustment. Three years after initial adjustment, GDP growth will still be below its long-term trend."

Edwards bases his conclusion on his analysis of previous historical situations which leads him to believe that GDP will fall sharply as foreign investors are unlikely to keep propping up U.S. trade and budget imbalances and spending sprees indefinitely.

The result, Edwards believes, would be a 21-to-28 percent depreciation in the value of the trade-weighted dollar and a considerable slowdown of the American economy. And that may be a "best case" scenario. He warns that the damage inflicted on the U.S. economy by a sharper and/or more immediate correction in the current account deficit could actually be much worse.

Just when you thought it was safe to go back in the water

The Vineyard Gazette shouts, "Shark". Today's Gazette has another article about the 'political chaos in West Tisbury'. Clearly, there are problems in town, but the article serves, I feel, to exacerbate them, rather than simply report them.

Was the Executive Secretary wrong?
About half of the article recounts the advice of the Town Counsel at yesterday's Selectmen's meeting relative to the filling of a vacancy on the Board of Assessors. The clear implication in the article is that the Executive Secretary was wrong in stating that, from her conversations with the Secretary of State's office, an election to fill the vacancy was not possible under state law due to the timing of the resignation establishing the vacancy.

The Town Counsel claims that the secretary's statement was 'a good faith misunderstanding'. Yet, Counsel went on to say that the Selectmen were not mandated to put the vacancy on this year's Town ballot; they could defer the election until the end of the term. So, was the Executive Secretary's decision a 'misunderstanding'? Her wording may not have been correct but the result was the same as Counsel's conclusion.

Although the Selectmen could continue with the appointment route, Counsel 'balanced his legal opinion with a bit of practical advice' and recommended that a special election be held. The article makes it seem as though the Town Counsel is the smartest, wisest guy in the room. This is the same Town Counsel who did not see fit to inform the Selectmen and the Town that an attorney could not easily withdraw from a case. And the same Counsel who hired a municipal law expert to take his place at Town Meeting.

Was the law violated?
Here it appears as though the answer is yes with one caveat: the Gazette reporter sometimes sees things differently from others and I'm basing this on his article as I was not at the meeting nor has it appeared on local television yet.

The Assessors supposedly adjourned their meeting when the Gazette reporter entered the room. Yet, a short time later, when asked to come to talk with the Selectmen, the Assessors said they were in a meeting. This sounds like a violation of the Commonwealth's Open Meeting law.

Either the reporter is a lawyer or the Gazette has close ties with a lawyer as the reporter knows that an Assessor takes an oath of impartialty. At this same meeting, the vacancy on the Board of Assessors was filled and the new Assessor proceeded to a joint meeting of the Assessors and the Selectmen. However, she was not asked to take the oath of impartiality. A small point, true, but it would be nice to have at least one case of the 'i's' being dotted and the 't's' crossed.

Why no response?
In the first issue in this post, it looks as though the reporter stretched things. The second issue suggests some errors by Town officials. The one I'm about to write about is clearly a mistake and, in light of the emphasis on legal affairs in the Town over the past year, a major mistake.

In November of 2003 a taxpayer - okay, the taxpayer of the year, Bill Graham, - asked the Assessors for a manual documenting the appraisal software leased by the Town. The Town refused and in August 2004 Graham went to court to get the documents. Well, guess what? The Town did not file a response. Thus, a default order was issued in the Fall. In January, Graham requested a default judgment. That case was heard this week.

You probably won't believe that the Town's attorney - not the Town Counsel - appeared in court a half-hour late just before the judgment was to be issued. It's a small Island so the judge gave the Town ten days to file an answer. Amateur night on the Vineyard!

The legal costs - and the embarassment - continue to mount

Things get weirder and weirder with the Dukes County Commission here on peaceful Martha's Vineyard. I wrote a few weeks ago about the willingness of twelve people to compete to serve as airport commissioner, a truly thankless job. Well, the County Commission appointed five of these candidates to the airport commission. The newly appointed commissioners appear well-qualified.

BUT - and there seems to be always a but with the Dukes County Commission. There is confusion as to whether there are three or five vacancies on the airport commission. It seems that on January 11 three commissioners were reappointed. However, because two of them did not present their appointment letter to the proper authorities in time, their appointment was rescinded. Now, one of the two has asked the district attorney to look into the matter.

The matter is the issuance of the appointment letters. One of the reappointees, who happens to be chair of the County Commission, picked up his letter the day of the meeting at which the three were reappointed. After signing that letter, the County Manager became too busy to sign the appointment letters for the other two. In fact, he never signed the letters because at a meeting on January 17 the County Commission voted to rescind the appointments of the out-of-favor two.

Confused? You'd think that these jobs paid big bucks. They, like most of the government offices of the Vineyard, pay exactly $0. Go figure.

A Typical Reaction?

The most intriguing part of this article, describing an administration meeting as Katrina was moving in, is the fact that the President does not ask a question. We know that often his actions seldom match his words. But is the lack of curiousity and challenging statements another trait? If so, it can explain a lot of what has happened over the past 5+years.

Promoting Mine Safety?

The Mine Safety and Health Administration has cited International Coal Group, the owners of the West Virginia mine where twelve died earlier this year, 273 times since 2004. The largest fine was $460; many were for only $60. The administration argues that cooperating with the mine operators improves safety more than fining them. Well, at $60 a pop, the fine is a small cost of doing business. Not only have the fines been lowered in the past few years, almost half of the fines have not been collected.

The American Way?

Most American prisons shackle mothers in labor.
Photo from today's NY Times.

Nuremberg or International Criminal Tribunals

Which serve justice better? Nuremburg was a pretty cut and dried affair. It took less than a year to decide to hang 22 Nazis. The Rwanda tribunal has taken almost ten years to deal with 44 cases with a staff of 1042 and costs of at least $231,000,000. The Yugoslavia tribunal, starring Slobodan Milosevich for the past four years, has cost over $1.2 billion resulting in 161 indictments. The Nuremburg trials were military trials. The International Criminal Tribunals do not follow military law.

Are the International Criminal Tribunals worth the money, the time, the effort? Do they achieve reconciliation or do they simply prolong the enmities? South Africa didn't use the tribunals. Nor did Mozambique. Both have moved on from the dark days. Have Rwanda and the former Yugoslavia?

Questioning the hype

Is China on the path to decay? Minxin Pei, Director of the China Program at the Carnegie Endowment for International Peace, thinks so. His article in this month's Foreign Policy argues that "rampant corruption, vast waste and an elite with little interest in making things better" is more likely to result in decay than democracy.

Some of his claims have been reported in this blog: the gap between the cities and the countryside, the poor medical system, the pollution. Pei feels that the state's large position in the economy (the state employs one-third of the work force, 56% of the industrial assets and is directly responsible for 38% of China's GDP) is one of the factors affecting China negatively. Not only does this control have economic implications (state enterprises earned a median of 1.5% on assets in 2003), it also carries the seeds of corruption in that the regime mixes patronage with its power.

Pei makes some interesting points. Most people realize that China has a way to go to be considered a developed nation, but they seem to be taking the right steps (albeit slow steps) in order to get there. Time, as always, will let us know whether they make it.

For the cat lovers in the crowd

Read about acrobatic cats