Will 2005 turn out as bad as 2006?

Just about 20% of the sub-prime mortgages granted in 2006 and that are at least fifteen months old are delinquent. The CMO - collateralized mortgage obligations - boosters say things got out of control in 2006. Well, the boosters may not be right. It seems that about 19% of the sub-prime mortgages granted in 2005 that are at least twenty-six months old are delinquent.

And, this week Caliber Global Investments, a London investment fund, closed its doors because of the performance of the CMOs they bought, much of which represented sub-prime loans granted in 2005.

Finally, what will happen when the higher rates kick in on all those adjustable rate mortgages out there?

File this one

It may not happen tomorrow. It may not happen this year. But at some point fairly soon you will see at least one large business demise attributed to CLOs.

Over the past twenty years or so the devious minds of Wall Street have dreamed up a variety of truly exotic - and difficult to understand - financial techniques (which they call products). CLO - collateralized loan obligations - is the latest.

Basically, a CLO is a pool of bank loans bundled together by Wall Street and sold in pieces of differing degree of risk. You can buy the riskiest piece or the safest piece. One problem is that no one really knows what the true worth of a particular CLO is. Also, since the bank is going to sell the loan when the borrower walks out the door, the banker's interest in maintaining loan standards is not very great. This reminds me of the sub-prime market: make the sale and sell the risk to someone else. Another variant of the free lunch.

Has Caracas moved to Alberta?

There is a lot of oil in Alberta. The problem is it's very costly to get it out of the sands. The techniques used to get oil in Venezuela work quite well in Alberta. Given that Chavez has driven out a number of experienced oil workers and given the high price of oil, it is little wonder that Alberta has become the place for Venezuelan oil workers, many of whom can make more than $100,000 a year. Alberta houses more than 3,000 Venezuelan families. Some churches now offer at least one Mass in Spanish.

Perhaps the migration of the oil workers is the reason why Venezuela's oil production is 20% less now than it was in 1999, although prices are quite a bit higher today.

A new bill

For the story behind this bill see the FP Passport blog.

Human Rights in China

If you want to know what's going on in China vis-a-vis human rights, read this blog. In April they published a report on minority rights in China. They are under attack or, more accurately, relatively ignored.

More specifically,

• minorities can't participate in decision-making that affects them
• they get the short end of economic development money and efforts
• their cultural identity is not protected.

End of Mission

Alvaro de Soto was the UN's Middle East representative for the past two years. He was with the UN for twenty-five years and had a fairly large role in the Cyprus situation. He is leaving the UN and the Middle East and has published a report. Some conclusions from that report:

• The boycott of Palestine after the victory of Hamas was a major error and the Palestinians suffered greatly. The boycott "effectively transformed the Quartet from a negotiation-promoting foursome guided by a common document into a body that was all but imposing sanctions on a freely elected government of a people under occupation as well as setting unattainable preconditions for dialogue".
• Where 100,000 Palestinians used to travel to Israel for work every day, now none do.
• Israel has "essentially rejected" any settlement moves. They have set unachievable preconditions for talks.
• Palestine has done a very poor job of stopping the violence.
• The U.S. has "pummeled into submission" the UN's role in the Middle East.

How low have we sunk?

Human Rights Watch and five other commie/liberal organizations claim that the CIA has detained the sons of Khalid Sheikh Mohammed. Tough darts, right? Their father was a nasty man and his sons probably helped him even though they are only 6 and 8 years old.

Vitamin D is needed

When school let out for the summer, my mother would spend the first week telling us to get some sun, but not too, too much. That's harder to do for Muslim women who follow the religion's dress codes. Many of them have Vitamin-D deficiency. Could their manner of dress be the reason?

Probably Interesting Reading

Here's a posting that you may want to follow:

CIA Releases Two Significant Collections of Historical Documents
Two significant collections of previously classified historical documents are now available in the CIA's FOIA Electronic Reading Room.

The first collection, widely known as the "Family Jewels," consists of almost 700 pages of responses from CIA employees to a 1973 directive from Director of Central Intelligence James Schlesinger asking them to report activities they thought might be inconsistent with the Agency's charter.

The second collection, the CAESAR-POLO-ESAU papers, consists of 147 documents and 11,000 pages of in-depth analysis and research from 1953 to 1973. The CAESAR and POLO papers studied Soviet and Chinese leadership hierarchies, respectively, and the ESAU papers were developed by analysts to inform CIA assessments on Sino-Soviet relations.

No Surprise

The House Oversight and Government Reform Committee (chaired by Waxman) has issued this year's report on the state of the federal procurement system. It wasn't pretty last year and is uglier this year.

Take the issue of fair and open competition. The Committee found that $67.5 billion was awarded in 2000 for contracts where there was not fair and open competition. That number grew to $145.1 billion by 2005 and in 2006 was $206.9 billion.

Similarly, waste and fraud continue to grow. Last year the number was $745.5 billion. This year it's $1.1 trillion.

Comments on Cheney and the Supreme Court by Jon Stewart etal

Another problem for Iranians

"In two hours gas will be rationed. You will able to buy 100 litres a month for the next four month." In essence, that's what Iran has told its citizens, many of whom justifiably went ape. Things don't sound very good there.

Tom Cruise is barred

Germany will not allow Tom Cruise to make a movie in Germany because Cruise is a member of Scientology, which in Germany is considered to be an enemy of free democratic order. This action itself seems to violate free democratic order.

I wonder whether Cruise would be barred if he were not making a movie about Nazi Germany.

Will we join the rest of the world..

in signing the Law of the Sea and in joining the International Criminal Court? John Bellinger, the top legal guy at the State Department, gives some hints that change may be afoot.

Another area...

in which we've lost the lead, however tenuous our lead in rocket technology may have been. The head of NASA says that the European space rocket, Ariane5, is 'probably the best in the world'. The company that makes it, Arianespace, has more than 50% of the commercial satellite launching market.

We don't have to be #1 in everything - we can't be - but we should not act as though we were.

Pearson lost

The judge with the $54,000,000 pants lost his case. Too bad, the defendants don't sue the bastard for all the stress and money he has cost them.

We're not the only one with a problem

NATO has killed civilians in Pakistan as well as Afghanistan.

I think there's a problem here

The U.S. invented the Internet and made it what it is today. However, as with many things in the 21st century, we have not kept up. We rank 16th in the world in terms of the speed of our internet connections - sixteenth!!. A movie that is downloaded in two minutes in Japan takes two hours here. We have download speeds of 1.9 megabits per second, Japan's is 30 times faster.

I have the sense, but not the proof, that the cost of the Internet is higher here than elsewhere.

Where does South Africa get the copper it exports?

It has no mines. Foreign Policy has an answer to the question.

Here's how a country on the verge acts

In May I wrote about the sad situation in Iran. It seems to be getting worse in that more and more freedoms are not only being curtailed but punished. For example, young men wearing tight T-shirts or having their hair cut the wrong way are paraded through the streets sucking on a can the Iranians using for washing their arses. This parade takes place after the guys have been rather thoroughly beaten.

Every Spring Iran seems to make a sweep of all those violating the Koran. This year they've set a record and have arrested at least 150,000. They've also sent a three page memo to the media telling them what they cannot report on, such as the price of gas.

But I guess Iran's problems will soon end as Ahmadinejad has said that their savior will soon return. I had better watch what I say.

Okay, I don't understand today's parents

Now they are paying consultants to help them come up with a name for their child. Some have paid as much as $475. It's a far cry from my days of helping name my kids. I think Catherine and I bought a book of names and spent a couple of hours deciding on a name. Now, some parents spend a lot more time than a few hours. It's all part of the idea that somehow the externalities are as important (or maybe more important) than who your kid really becomes. Some look on the task of giving their child a name as being akin to developing a brand.

Yes, your name does have some influence over you, but the influence is almost non-existent. I hated mine, but if my dislike of my name affected my life in any way I would be absolutely amazed.

I'm not sure that you want to read this.

Anthony Cordesman has a devastating critique of the Defense Department's report, "Measuring Stability in Iraq". Essentially, Cordesman says our strategy, such as it is, is just not working and probably will never work.

His section titles lay out his argument

• Fighting the wrong war in a nation of civil wars.
• Not counterinsurgency but armed nation-building
• A critical lack of US official transparency and integrity
• Failures in conciliation and governance
• Failures in security
• Failures in economic security, development and aid

The point that really gets me: "the US government has never openly discussed or analyzed its failure in not planning for stability operations or conflict termination, in creating an electoral process that polarized Iraqi politics around inexperienced sectarian and ethnic leaders and parties, and in creating a constitution that helped divide the nation without resolving any of the key issues it attempted to address."

Most of the time in life problems do not just go away. They will continue to return until they are resolved. Unless you take the time to figure out why strategy x did not resolve the problem, you are doomed to be visited with the problem over and over. This inability to admit the existence of a real problem seems to be a hallmark of our leadership.

Our leaders are afraid of the truth, afraid of facing reality. Sometimes you can get away with living in a fantasy world. Most times you can't. When will we realize we are living in a world that is changing very dramatically? How many of the people aspiring to lead this nation are even aware of the changes that are taking place?

"He knows what his intentions were"

"He" being George W. Bush as we were informed by Tony Fratto, a White House spokesman, when responding to questions as to why the offices of the Vice President and President are exempt from the executive order requiring all parts of the executive branch to submit to the oversight of an independent office with regard to the handling of classified information. Most people would think that the offices of the Vice President and President are parts of the executive branch. Bush apparently intended that they would not be so considered.

The 'loss' of thousands of e-mails would make one question the adequacy of the White House's protection of classified material.

The Vice President filed the necessary reports in 2001 and 2002 and the stopped. Was that because the Iraq war began in 2003?

A view from the inside

It's true that Lt. Col. Stephen Abraham did not serve on many Guantanamo panels. He served on only one. But I tend to believe his claim that there are problems there.

In an affidavit he told the story of his one experience serving on a military panel. The panel found that the detainee should not be classified as an enemy combatant. His superiors forced them to reopen the hearing so that more evidence could be presented by the government. Again, the panel said the detainee was not an enemy combatant. Later the panel was interviewed more than once about their decision. That was the last time Abraham had an opportunity to serve on a panel. I wonder why.

Moreover, Abraham accuses the intelligence agencies of refusing to state that he had been given all the evidence - pro and con - in the case. In his view much of the evidence was gathered by junior officers with little or no training or experience in the area.

11 Veterans speak

GOOD is a magazine I'd never heard of. It looks promising. This issue features brief comments from Iraq veterans. The common thread that runs through their statements is the lack of involvement of so many of us in this country.

Of course, he's just reporting the facts

William Clark runs the audiology department at Washington University medical school and, being an academic, publishes in the hearing journals. He seems to have specialized in determining whether hearing loss is a function of one's occupation. Specifically, he has published studies of firefighters, trainmen and miners. In each case he has concluded that any hearing loss incurred by workers in these fields was not due to equipment manufactured by companies who paid him to do the studies. Maybe he was being impartial, but clearly his results are tainted.

A more nuanced view of China

James Fallows is now living in China. Periodically he reports on what he has found there. In the current Atlantic Monthly his subject is manufacturing in China. It's a fairly lengthy article, but, as usual with Fallows, your mind opens up a little more. Some nuggets I found interesting:

• Our attitude towards China's industrial growth is very similar to that of Europe towards the industrial growth of the U.S. 100+ years ago.
• Some factories in China are the best in the world.
• Not only are Chinese factories able to produce goods cheaply, they can do it fast.
• In many Chinese factories the advantage they have is people because people do not have to be reprogrammed as do robots - and that saves time.
• Many Chinese workers assemble items by hand. Here, assembly is done by machines. Ergo, we are not losing assembly jobs to China.
• It is very likely that China's industrialization has brought more people out of poverty in the last fifty years than any other endeavor of man.

Fallows ends with this
"If the United States is unhappy with the effects of its interaction with China, that’s America’s problem, not China’s. To i­magine that the United States can stop China from pursuing its own economic ambitions through nagging, threats, or enticement is to fool ourselves. If a country does not like the terms of its business dealings with the world, it needs to change its own policies, not expect the world to change. China has done just that, to its own benefit—and, up until now, to America’s.

Are we uncomfortable with the America that is being shaped by global economic forces? The inequality? The sense of entitlement for some? Of stifled opportunity for others? The widespread fear that today’s trends—borrowing, consuming, looking inward, using up infrastructure—will make it hard to stay ahead tomorrow, particularly in regard to China? If so, those trends themselves, and the American choices behind them, are what Americans can address. They’re not China’s problem, and they’re not the fault of anyone in Shenzhen."

25 more

That's 25 more civilians killed in Afghanistan. As my friend, R.J. Adams, has pointed out more than once, the BBC does have better coverage of the wars than our media does. Here's another example. Sampson's view is just about the polar opposite of Karzai's.

The first day of summer

Now you see it...

and now you don't. A good size lake in a remote part of Chile has disappeared. It was there in March when park rangers last visited the site. It had disappeared when they next visited in May.

Is the Kennedy name losing some of its influence?

Joe Kennedy, the senator's nephew and a former Congressman, married Sheila Rauch in 1979. They divorced in 1991. Kennedy married an aide in his office in 1993, but, being a good Catholic, he applied for an annulment of his marriage to Rauch. In 1996 the Archdiocese of Boston granted the annulment. However, since all annulments have to be approved by the Vatican, Rauch appealed.

Nine years later the Vatican ruled that the annulment was not valid. However, the ruling was in Latin and there just aren't that many Latin scholars around, even in the Catholic church. It took two years for Rauch to find out that she and Joe were still husband and wife. She found this out in May and the news was made public now.

You have to wonder whether the annulment would have been finalized had it happened in the 1970s rather than the 1990s. Ted Kennedy had no problem getting an annulment back then.

We know better..

or maybe we can't afford it. That seems to be the attitude of the military command when it comes to the mental health of our troops in Iraq.

Most mental health professionals believe that anywhere from 12-20% of our troops will suffer from PTSD. Very few of us can imagine the stress of combat. The Army's mental health professionals are arguing for a one month break after someone has served three months in combat in Iraq. This is similar to what took place in WWII and Vietnam. Although the Iraq war is much more intense, the brass says they can't afford it; they will give the troops a day or two off every eight days.

A draft will allow us to have more troops in the field and might reduce the incidence of PTSD.

A long way to go

The past week has not been a good one for China's reputation of having joined the modern world (or at least what I'd like to think is the modern world). There is extensive coverage on China Digital Times of child and slave labor issues focusing on the brick kiln story in Shanxi Province.

This comment by the manager of the factory sums up what appears to be not a rare attitude in parts of China, "I felt it was a fairly small thing, just hitting and swearing at the workers and not giving them wages. The dead man has nothing to do with me." Combine this with

• forcing children to work and the girls to become prostitutes
• local police preventing kids from leaving unless their parents appear
• the government issuing a policy to censor news about the issue
• the lead paint on Tommy the Train
• a work-study program where junior high students work 14 hours a day and can't call home
  

and you have a moral catastrophe on your hands.

I agree with 10, I disagree with 6

10-6 is the score in terms of the effect Bush's signing statements have had on the implementation of bills passed by our Congress. The GAO looked at 16 recent bills; ten of the agencies charged with implementing these bills ignored - or seemed to ignore - the signing statement, six did not as they apparently believed in the unitary power of Il Jefe.

A really talented president

The president of Gambia can cure Aids, asthma and diabetes.

We need a draft

I've written about the private security contractors in Iraq, but have ignored the other contractors there. I really shouldn't have as there are a lot more of these other contractors than the guys carrying guns. A guest on the Diane Rehm show today, Dina Rasor, co-author of Betraying Our Troops, claims that there are about 126,000 contractors in total in Iraq; i.e, there are almost as many contractors as troops.

In essence, the bulk of these contractors have become the logistics staff for the military. The fact that we have outsourced this vital aspect of any war means that the military really does not have the control they need and should have. An example - Some contractors have stopped working because their bills have not been paid on time. They've stopped working in Iraq, where soldiers are getting killed daily. And there is nothing the military can do about it as the contractors are not subject to military law. Not only is this behavior intolerable, but we are spending billions of dollars with these contractors.

Wouldn't it make sense from both the military and financial standpoint to have all of our military functions being run by our military, rather than assign logistics to a contractor and dying to a soldier? It's time to face facts. The professional army concept is not working. We need to reinstate the draft.

Ka-ching

The costs keep rising. Which is greater? The dollars spent or the opportunities missed?

Our changing position

For a fair while now I've been carping about our country's declining role in innovation. The National Academy of Science has just come out with a report on the state of physics today and the challenges it faces. The report is for sale but Ars Technica has a review of it. The following excerpt from this review is what I see as the key points.

The report identifies six key questions that will represent the grand challenges that materials science will face over the coming decade, the ones most likely to produce the next revolution. But it also raises fears that those challenges will be met by researchers outside of the US. It highlights the fact that government funding has not kept up with the rising costs of research at the same time that the corporate-funded research lab system has collapsed. As a result, US scientific productivity has stagnated at a time when funding and output are booming overseas. The report makes a series of recommendations that it hopes will get US physics research booming again.

Emphasis added.

A different counterinsurgency goal

The Strategic Studies Institute, which is affiliated with the Army War College, publishes some interesting stuff. "Rethinking Insurgency" by Steven Metz is a good example of their work. Metz, who has written extensively on counterinsurgency, argues that

At the strategic level, the risk to the United States is not that insurgents will “win” in the traditional sense, take over their country, and shift it from a partner to an enemy. It is that complex internal conflicts, especially ones involving insurgency, will generate other adverse effects: the destabilization of regions, resource flows, and markets; the blossoming of transnational crime; humanitarian disasters; transnational terrorism; and so forth. Given this, the U.S. goal should not automatically be the defeat of the insurgents by the regime (which may be impossible and which the regime may not even want), but the most rapid conflict resolution possible. In other words, a quick and sustainable resolution which integrates insurgents into the national power structure is less damaging to U.S. national interests than a protracted conflict which leads to the complete destruction of the insurgents. Protracted conflict, not insurgent victory, is the threat.

If, in fact, insurgency is not simply a variant of war, if the real threat is the deleterious effects of sustained conflict, and if it is part of systemic failure and pathology in which key elites and organizations develop a vested interest in sustaining the conflict, the objective of counterinsurgency support should not be simply strengthening the government so that it can impose its will more effectively on the insurgents, but systemic reengineering. This, in turn, implies that the most effective posture for outsiders is not to be an ally of the government and thus a sustainer of the flawed socio-political-economic system, but to be neutral mediators and peacekeepers (even when the outsiders have much more ideological affinity for the regime than for the insurgents). If this is true, the United States should only undertake counterinsurgency support in the most pressing instances and as part of an equitable, legitimate, and broad-based multinational coalition.

American strategy for counterinsurgency should recognize three distinct insurgency settings each demanding a different response:

• A functioning government with at least some degree of legitimacy is suffering from an erosion of effectiveness but can be “redeemed” through assistance provided according to the Foreign Internal Defense doctrine.
• There is no functioning and legitimate government, but a broad international and regional consensus supports the creation of a neo-trusteeship. In such instances, the United States should provide military, economic, and political support as part of a multinational consensus operating under the authority of the United Nations.
• There is no functioning and legitimate government and no international or regional consensus for the formation of a neo-trusteeship. In these cases, the United States should pursue containment of the conflict by support to regional states and, in conjunction with partners, help create humanitarian “safe zones” within the conflictive state.

An interesting take on Afghanistan

Sarah Sewall, a Harvard academic, looks at strategy in Afghanistan a tad differently. NATO forces are using counterinsurgency tactics, which emphasize defense. The U.S. is using counterterrorism tactics, which emphasize offense. Both forces are trying to make it happen without having adequate forces. As Sewall states, "The stakes are as high in Afghanistan as in Iraq, but no one seems to be paying attention except the Afghans."

Will today's killing of 35+ police there have any effect on NATO or the U.S.?

An update on Private Security Companies

Just about every 11 months the subject of private security companies in Iraq crosses my field of vision. They are still very active. They guard all convoys transporting reconstruction material. They guard U.S. military installations. They guard at least three generals. The Army plans to use them to guard military convoys and provide security for the Corps of Engineers. Naturally, with all this guarding they are subject to attacks by the insurgents; one firm was attached 300 times in the first four months of this year.

While the companies are doing things that used to be done by the military, any casualties they suffer are not reported or are under-reported by the military. Some think 132 contractors have been killed and 416 wounded since Fall 2004; some think the number is higher.

What did they know and when?

Earlier this year, Sy Hersh interviewed General Antonio Taguba, who investigated the Abu Ghraib scandal. This week's issue of the New Yorker reports on this and related interviews. It's not a pleasant story. I think Hersh demonstrates quite convincingly that 'they' knew about Abu Ghraib from day 1, that is before it became public knowledge. In fact, 'they' initiated the system used to extract information from prisoners.

The article ends with a quote from Taguba. “From the moment a soldier enlists, we inculcate loyalty, duty, honor, integrity, and selfless service. And yet when we get to the senior-officer level we forget those values. I know that my peers in the Army will be mad at me for speaking out, but the fact is that we violated the laws of land warfare in Abu Ghraib. We violated the tenets of the Geneva Convention. We violated our own principles and we violated the core of our military values. The stress of combat is not an excuse, and I believe, even today, that those civilian and military leaders responsible should be held accountable.”

Reality according to Paul Wood of the BBC

Reading this transcript of a report by Paul Wood really brings home how bad things are in Iraq.

Wildlife management

At today's meeting of the Men's Group we heard a presentation on Aldo Leopold, a name few of us had heard before. Come to find out he was very instrumental in the early - very early - days of the ecology movement. He is considered the father of wildlife management. Our speaker, Al Harris, contrasted Leopold with Rachel Carson in this way - Leopold focused on the damages wrought by taking things (animals, plants) away from our environment, Carson focused on the damages wrought by adding things (chemicals) to our environment. Very interesting discussion.

Hey, he's persistent

A farmer in India has been trying to pass his high school exams since 1969. This time he got about 20% of the questions right. He intends to try next year; this will be his 39th attempt. His goal once he passes the exam is to marry a woman under 30 years of age. He is in his 70s.

Two suggestions from the Wests

Bing and Owen West are ex-military men and father and son. In today's NY Times, they have two suggestions re improving the situation in Iraq:

1. Give our troops a device to enable them to identify those they stop.
2. Stop the policy of making it so difficult to retain captured insurgents.

With regard to the first suggestion, the Wests point out that 22,000 NYC cops made 313,000 arrests in 2006; 400,000 Iraqi and US troops made 40,000. This differential is due, they feel, to the ability of the NYC police to use an online database to verify the identity of those they detain. Forty years ago in Vietnam the Vietcong were damaged by a detailed town-by-town census that was conducted by hand. Biometrics and real time computing are light years ahead of where they were then.

The process we use to handle those we capture seems geared much more to protecting the captives' rights than imprisoning likely bad guys. (I need not remind you this is in sharp contrast to our efforts re Guantanamo.) Anyway, here's what the Wests say happens:

After an arrest, two soldiers must file affidavits, together with physical evidence and digital pictures, and then an American lawyer decides if the package is strong enough to withstand further review. About half of all detainees are released within 18 hours; the others are sent from battalion level to brigade level, where the evidence is re-examined, resulting in more releases.

Those detainees remaining are sent to a detention center where a combined board reviews the evidence again, and releases still more. After that, every six months a United States board must re-review the evidence in each case. Lastly, the detainee appears before an Iraqi judge, who in turn dismisses about half of the cases.

As for follow-up, before a detainee walks free, the American command sends notification to the battalion in the area where he was apprehended. But because many of the battalions have rotated back to the United States by this time, a new unit has to deal with the detainee.

Worse, there remains steady clamoring from both high-level Iraqi and American officials for yet another mass release (there have been several since 2003). To his credit, General David Petraeus, the top American commander in Iraq, has resisted, and the result is prison overcrowding since the surge began. Yet neither the American government, mindful of the criticism of Abu Ghraib and Guantánamo Bay, nor the Iraqi government wants to take the political heat of building more prisons.

I find this truly unbelievable.

If you're going to commit a crime, do it on Indian lands

Indian reservations are the domain of sovereign Indian tribes, who are responsible for running their schools and courts. One problem - they can't prosecute non-Indians living on the reservation. Another problem: the maximum sentence - no matter what the crime (murder, rape, fraud) - is one year and a $5,000 fine. The chances of your being prosecuted if you've been arrested are 30%; in other jurisdictions is 56%.

The Businessman Stud

By all accounts David Colby was very deserving of his success as a businessman - a CFO of a major hospital system at 29, a prime mover in the success of one of the country's largest ambulance companies, CFO of one of the largest health insurance companies.

For some his private life could also be considered a smashing success - married twice, wives and children on two coasts at the same time, dating two sisters simultaneously, a mistress on the West Coast and another in Indianapolis.

He had a real talent for keeping simultaneous affairs going. For example, in February 2006 the Indianapolis Star reported (complete with photograph) his engagement to Ms Rita DiCarlo; in July the same paper reported on the work he and his 'wife', Angela, were doing in restoring an historic home.

Nasty Exxon Mobil

Just because they can't make money from a proposed natural gas pipeline in Canada they are talking about not building it. Or, are they just looking for a government subsidy?

Types of Immigration

Go to FP Passport for some analysis of different forms of immigration.

Changing perceptions

I was not a fan of Ronald Reagan, but you've got to agree he uttered some famous lines, such as the one he uttered twenty years ago today, "Mr. Gorbachev. Tear down this wall." Come to find out, most of his advisers wanted to strike the line.

Will "As they stand up, we'll stand down" resonate twenty years later? It may be quoted but as an indication of the naivete and stupidity of our leaders.

Eva Cassidy sings "Somewhere over the Rainbow"

There has to be something about this song at this stage of my life. Listen to Is' version. You'll probably have to scroll down after you've hit the link.

They're living in a dream world

The school teachers of Quincy, Ma., have been on strike for three days now. The burning issue? Health care costs. The current contract allows teachers to pay a staggering 10% of their health insurance costs. The proposed contract will double that percentage. How can the city, which pays its teachers more than any other city or town south of Boston, be so callous?

Maybe the teachers should talk to someone who pays 100% of their insurance.

Bac k to 320 A.D.

Academics from several universities have constructed a 3D version of what Rome looked like in 320. It's really interesting although the text is quite small. But it's a lot more than text. Try it.

He gets it

T. Paul Buhlman, Chairman and President of ATP Oil and Gas, told his staff back in December 2004 that if the company made certain long-term performance goals each employee would receive a new Volvo. In April Buhlman was true to his word and more. Not only did everybody get a Volvo or the cash equivalent, but everybody went to Sweden to pick up their car.

It sounds more realistic to me

Thomas Ricks writes in today's Washington Post of recent interviews he's had with military and others in Baghdad. It seems as though the military is pushing the idea of cutting our forces there to about 50,000 in a year or so. While I still - and always will - lament our going into Iraq, I do not believe that a total, immediate withdrawal is necessarily a wise thing for us or for the Iraqis. Further, an 'immediate' withdrawal is impossible as there is only one primary way - through Kuwait - to get our gear out of the country; this may take ten months.

Or course, having any of our soldiers there means more American deaths but a phased withdrawal might be best for all concerned, given the current state of affairs: the insurgents might see that we will not be there forever, our friends might realize that we are not abandoning them, and the world might see that we are trying to extricate ourselves from this mess in an intelligent way. I know that I used 'might' four times in that sentence, but I'm not foolish enough to claim to know the future.

There are a couple of interesting comments in the article

• "We had previously 'transitioned' ourselves into irrelevance, and the whole thing was going to hell in a handbasket."
• The 2005 election only made things worse. "We wanted an election in the worst way, and we got one in the worst way."

Is income inequality due to technology, education and globalization?

Most economists - particularly those allied with Wall Street and the administration - would answer 'yes' to that question. And, if you look at the numbers by themselves you'd have to agree. However, Frank Levy and Peter Temin of MIT, argue that, although technology, educational levels and globalization are very important, you have to consider the economic institutions which are prevalent at a particular time. They do so in their paper, "Inequality and Institutions in 20th Century America".

That inequality has been rising in this country cannot be disputed. Nor can the fact that there was less inequality in the period 1950 - 1980. Between 1980 and 2005 non-farm productivity, the engine of economic growth, rose 67.4%; compensation of full-time workers rose 19%. Similarly, the top 1% of taxpayers increased their share of gross personal income from 8.2% in 1980 to 17.4% in 2005.

From 1947 to 1973, median family income and productivity moved in concert; both doubled in that time period. Why? Levy and Temin argue because the unions were really powerful, taxes were progressive, there was a reasonable minimum wage and institutions - including the government - tried to influence the market rather than give it the virtually unrestrained freedom it has today.

This paper seems to be a hot topic in the world of economics today. Will it be read by Paulson and company?

The Image and the Reality

You've probably read of the Department of Transportation fining airlines for various infractions, such as not being able to store wheelchairs on a plane or not reporting flight information accurately or outright lying to passengers, particularly re delays. These fines typically range from $25,000 to $150,000.

Well, these fines are seldom paid in full. More than half are forgiven if the airline promises to be a good boy and not do it again. Others are reduced if the airline promises to do something it might do anyway, such as increase the number of monitors in an airport.

It's only our money that DOT feels free to not collect.

It may be over

The Appellate Tax Board finally issued its report in the Graham case, which was the longest lasting case in the board's history and a cause celebre here on the Vineyard. From a PR viewpoint Graham won while the issue was in the news. From a dollar and cents viewpoint Graham lost - and lost big - today when the issue has been on the back burner for a year or so.

I'm not an attorney but my reading of the report leads me to believe that Graham would be nuts to appeal the decision. Basically, the board said Graham did not mount any sort of a reasonable case. The decision seemed to boil down to the opinions of the expert appraisers brought in by both sides. The Assessor's expert based his argument on detailed data, Graham's on theories which did not seem grounded in fact.

How not to handle a recruiting crisis

The military has problems recruiting so they lower standards. The military does not have enough people who speak Arabic so it sends some people to language schools. But what does it do when the 'Don't ask, Don't tell' policy outs a gay person who speaks Arabic fluently? Discharges the person. Make sense to you?

Reality begins to intrude

A lead article in today's Wall Street Journal raises the specter of some private equity deals not being the sure road to riches that one would expect from the recent media hype. The article discusses four deals that look as though they are going sour.

While four potential losses does not seem to be a bad record, the article also noted that the interest coverage in private equity deals as a whole has gone down from 3.4 in 2004 to 1.7. Sooner or later debt must be paid if you wish to stay in business. The market for debt is finite. How many private equity failures will it take to squelch the boom?

Separating work from beliefs

The question I have with regard to Bush's nominee for Surgeon General, Dr. James Holsinger, is whether he can separate his beliefs from his responsibilities as Surgeon General. Sure, he seems to hate gays. But what about this

Phyllis Nash, who worked under Holsinger for nine years as vice chancellor at the medical center, said the views he took in church appear at odds with his professional actions.

She recalled a women's health conference that Holsinger helped organize in 2002 that included a session on lesbian health. Despite complaints from some lawmakers, Holsinger insisted the session go forward, she said.

Looking behind some of the charges made against Holsinger - such as he was responsible for unnecessary deaths at VA hospitals - one finds them to be a twisting of the facts. Apparently Holsinger has been a reasonably competent person, perhaps more so than most Bush appointees. Whether he can compartmentalize his professional life and leave his anti-gay bias at the door is the question.

A new speed record

A guy in Michigan set a new speed record for wheelchairs - 50 mph. Unfortunately, since he had some help, his record will not make the Guinness Book.

I said you'll have it whether you want it or not

Congressman Don Young of Alaska was head of the House Transportation Committee until the Republicans lost control in the last election. Mr. Young liked to give our money away. He was very instrumental in funding the 'bridge to nowhere' off Ketchikan. But, at least that bridge was in Mr. Young's district. While chairman, he also decided to give $10,000,000 of our money to Florida so that it could connect the Coconut Road to I-75.

It seems that our money was given to Lee County just after Mr. Young received $40,000 in campaign funds from a Florida gala in his honor. Lee County leaders, to their credit,voted twice not to accept these funds. But, Mr. Young is a persistent guy and threatened to withhold all federal funds from the county unless they took this money and used it to connect Coconut Road to the interstate. The fact that the EPA, Army Corps of Engineers and environmental groups assert that the road will damage wetlands is of no concern to Mr. Young. Heck, it's not his money and he doesn't live there. Why should he worry?

A real test of skill

One Connected Guy

Prince Bandar bin Sultan, friend of the Bush family and Saudi ambassador to the US for twenty years, also had very good connections in England. Over the years he has received hundreds of millions of dollars connected to a huge sale of planes and other weapons by BAE Systems to Saudi Arabia. According to Panorama, an English Frontline, the payments were made with the full knowledge of the English government, which, incidentally, stopped an investigation into the matter.

Here's some help for you to do the right thing

That was essentially what the Marshall Plan said. It did not say you have to do what we want you to do. Were our leaders smarter then or less egotistical?

Just blocking and tackling

Bill Mullahy, a friend of mine who is no longer with us, used to say that business was all about blocking and tackling. I suspect that Todd Bradley, who runs H-P's PC business, would agree with Bill. There was an excellent article in Monday's Wall Street Journal about Bradley's turnaround of H-P's PC division. I hope you can read it.

Bradley was able to increase H-P's market share and profit margin by focusing on the basics. Like who is the customer, what does the customer want, how can I reach him and convince him of the value he can find in my product, what do I have to do to make sure I can deliver, how do I monitor my customer deliveries. It's a fascinating article that I'm sure will become part of a case study at graduate business schools.

Wasting our money

MIT has begun issuing a series of essays challenging the conventional wisdom of our government policies. Since I've carped a fair bit about the performance of the Department of Homeland Security (DHS), I decided to read their essay entitled "Paying for Homeland Security: Show Me the Money".

The essay is the result of an analysis of DHS' budgets since the department was formed. One of the reasons for forming the department and giving it more money was so that the additional money could be spent on top priority projects. Well, each of the agencies has been getting its same share of the DHS budget every year, even though there is a fair amount of duplication among agencies. The extra money is not going to top priority projects.

It looks like the bureaucracy is winning the GWOT.

A Russian trash dump

In the early 1980s radioactive contamination started to leak from the fuel rods used in Russian nuclear submarines. To contain the problem for five years or so, the rods were encased in cement tanks and put into warehouses near the sea.

It seems as though Mother Nature has been working on these tanks over the past 20+ years. Salt water is now in the tanks and working its way to the 21,000 rods. When that happens, uranium particles will be released. Get enough of these particles and you will have an uncontrolled chain reaction of unknown destructive capacity.

This could happen tomorrow or years from now.

Who knows what truth is when it comes to Cuba?

Bella Thomas, who has lived in Cuba and also has diplomatic contacts there, has a downbeat article on Cuba in Prospect Magazine. We've heard a lot about the good medical system there. She disputes that by recounting her visits to downtrodden, ill-supplied rat traps called hospitals. She also asserts that food is in short supply.

Her advice is that we drop the boycott. The flood of investment that would be generated would be good for Cubans and good for us.

Maybe he has a point

Putin has asserted that our movement to build missile defense systems in Europe is an attempt to restart the arms race. Gorbachev has also weighed in with a similar opinion.

We almost went to war when Russia has missiles based in Miami forty-six years ago. How would we feel if they put missiles there once more?

It sounds as though Bush wants to leave office with a bang.

Not a good start

The NY Times was given a one-page assessment by the military as to the current state of the surge. It's not good.

The military feels that only 146 of 457 neighborhoods in Baghdad are really protected. In one sector the number of bodies has tripled since the surge began, although there are three times as many soldiers patrolling now as there were previously. In this same sector Shia are working hard to expel Sunnis. Two of the three gas stations in the area refuse to sell to Sunnis. Trash trucks entering Sunni areas have been attacked. Sunni homes have been set on fire. The local police commander has been replaced three times because of suspect collusion.

The basic problem appears to be an optimistic opinion as to how helpful the Iraqi military and police would be. They have not been very helpful. In some cases, particularly with the police, they appear to be helping the insurgents.

Breakfast on the go

We're driving on Route 495 at about 75 mph. Next to us is a woman eating breakfast. It looked like scrambled eggs. She had a fork in one hand and was balancing the dish holding the eggs on the back of the hand with which she was steering the car in the middle lane of a three lane interstate highway.

What would she have done if she got a call on her cell phone? Maybe she'd have to stop. That would be a tragedy for she obviously was pressed for time.