A risk or two in attacking Syria

If you favor attacking Syria, you don't want to read this article.  It lists the views of "Middle East experts" as to the consequences of an attack.  The primary issue seems to be that expressed by Ryan C. Crocker, a former ambassador to Syria and Lebanon, who has served in Iraq and Afghanistan, "Our biggest problem is ignorance; we’re pretty ignorant about Syria,”  Particularly as to what Assad might do.  Crocker again, “So he continues on in defiance — maybe he even launches another chemical attack to put a stick in our eye — and then what?  Because once you start down this road, it’s pretty hard to get off it and maintain political credibility.” 

Plus, we have to remember that the Assad opposition is not made up entirely of those who are our friends.  Nor is Syria without allies.  The possibility of unintended consequences is enormous.

Obama has demonstrated that he is as ignorant as Bush with regards to our economy and such concepts as privacy and liberty.  With Syria he seems to demonstrate another area in which he is as good as GW.

Who wants to attack Syria?

A Reuters poll says 60% of we Americans don't want to, 9% do.  The English Parliament doesn't want to, David Cameron does.  Conor Freidersdorf thinks that only the "tiny, insular elite that mostly lives in Washington, D.C." want it.  And, in his view, the media is reporting only that last point of view. He writes:

The political press unconsciously treats hawkish positions as if they're more serious and legitimate, in part because they've thoughtlessly bought into the frame that experts can control geopolitics. This is a consequence of so many political journalists living inside a Washington subculture that attracts foreign-policy thinkers with an inflated sense of their own ability to understand and shape global events. The American people are well aware of the shortcomings of those elites, having witnessed their performance in Vietnam, the Bay of Pigs, Beirut, Iraq, Afghanistan, and Libya, among other places.

Another Snowden Bombshell

This time it's the budget of the 16 intelligence agencies that keep us safe and secure from terrors inside and outside this country.  The Washington Post has published an extensive article including excerpts from the intelligence budget itself. Some of the more interesting facts that jump out at you:

• We have sixteen spy agencies, employing 107,035 and spending over $55 billion a year, which is more than we were spending in the Cold War.  We spend the money on data collection, data analysis, management (including facilities and support) and data processing and exploitation.
• The CIA spends the most ($14.7 billion), including such activities as secret prisons, a controversial interrogation program, the deployment of lethal drones and a huge expansion of its counterterrorism center. It is now more of a paramilitary force than a spy agency
• Our priorities in terms of countries: China, Russia, Iran, Cuba and Israel and in terms of activities: combating terrorism, stopping the spread of nuclear and other unconventional weapons, warning U.S. leaders about critical events overseas, defending against foreign espionage, and conducting cyber-operations.

Bailing In or Bailing Out

This is a really scary video. I had never heard of the Public Banking Institute. Although the video creates an end-of-the-world vibe akin to Tea Party stuff, it does provide a good basis for the claims by the Institute. This is especially true with regard to derivatives and a depositor's place in the hierarchy of debtors when banks fail. For a summary of the video, click here.

How valuable are CEOs?

For the past twenty years the Institute for Policy Studies has been conducting studies of the twenty-five highest paid CEOs in the U.S.  In the latest study they concluded that nearly 40 percent of the CEOs on the highest-paid lists from the past 20 years were eventually "bailed out, booted, or busted."  Their definition of these categories follows: 

The Bailed Out: CEOs whose firms either ceased to exist or received taxpayer bailouts after the 2008 financial crash held 22 percent of the slots in our sample

The Booted: Not counting those on the bailed out list, another 8 percent of our sample was made up of CEOs who wound up losing their jobs involuntarily. Despite their poor performance, the “booted” CEOs jumped out the escape hatch with golden parachutes valued at $48 million on average.  

The Busted: CEOs who led corporations that ended up paying significant fraud-related fines or settlements comprised an additional 8 percent of the sample.

 

Hat tip to The Big Picture

Intelligence Says It Was The Syrian Army

Foreign Policy has an exclusive.  Our intelligence service supposedly overheard an "official at the Syrian Ministry of Defense exchange phone calls with a leader of a chemical weapons unit, demanding answers for a nerve agent strike that killed more than 1,000 people."  So, it is probably true that Assad is responsible for the chemical attack on his people.  

But, that doesn't mean we should attack Syria.  After all, more Syrians have been killed by conventional weapons.  Why would support of the rebels be better for us than support of the government, assuming we should be doing anything?  Do we have a vital interest that this civil war will affect?  Will our attacking Syria make the world a more peaceful place?  Have we learned nothing from Iraq and Afghanistan?

August 28, 1963

Cui bono?

The question of who benefits from a military response to Syria is what I've been trying to raise in the last couple of posts.  James Fallows and Franklin Spinney address this question in two separate articles.  Here are the relevant excerpts.

For 20 years now we have seen this pattern:

1. Something terrible happens somewhere -- and what is happening in Syria is not just   terrible but atrocious in the literal meaning of that term.
2. Americans naturally feel we must "do something."
3. The easiest something to do involves bombers, drones, and cruise missiles, all of which are promised to be precise and to keep our forces and people at a safe remove from the battle zone.
4. In the absence of a draft, with no threat that taxes will go up to cover war costs, and with the reality that modern presidents are hamstrung in domestic policy but have enormous latitude in national security, the normal democratic checks on waging war don't work.
5. We "do something," with bombs and drones, and then deal with blowback and consequences "no one could have foreseen."

While such precision-guided coercion operations may infatuate the foreign policy wonks, media elites, and feather the nests of defense contractors, the resulting strategy of drive by shootings has failed utterly to coerce the likes of Milošević, Osama Bin Laden, Saddam Hussein, Qaddafi, or the Taliban to behave in ways our pol-mil apparachiks deem to be acceptable. Viewed from the receiving end, the grand strategic result has been to turn the United States into a kind of unfocused Murder Incorporated using techno-advantages to kill and terrorize whomever, wherever, and whenever it chooses.

Is this strategy working? Just ask yourself a version of Ronald Reagan’s famous question to President Carter in the 1980 election debate: ‘Is our country better off now than it was before this madness shook itself from the moderating shackles of the Cold War twenty some years ago?’ That the NATO alliance of 780 million people eventually prevailed over Serbia, a country of ten million with a gross domestic product equal to two-thirds that of Fairfax County, Virginia, is hardly a precedent to celebrate, particularly since it proved so spectacularly that the marriage of coercive diplomacy to limited precision bombardment is a colossal failure. 


Polls make it clear that a majority of the American people oppose another war in the Middle East.  Nevertheless, the New York Times reports that high officials in the Obama White House now want the American people to believe the Kosovo debacle is a precedent to justify a another drive-by-shooting campaign to coerce Bashar Assad in behaving the way we want him to behave.

 When faced with such lunacy, perhaps it is time to ask the question.

Cui bono?

Can you only commit a 'moral obscenity'?

Or, can you simply watch it being committed and do nothing about it?  Which is worse?  Kerry seems to think doing nothing is worse.

Foreign Policy has a devastating article, including excerpts from CIA reports, that we allowed Saddam Hussein to use chemical warfare against Iran in the 1980s.  We said nothing, did nothing because we did not want Iran to win the Iran-Iraq War.  And, it appears that these nerve gas attacks were far more devastating than anything Syria has seen. 


Will Kerry read this article?

Does a "moral obscenity" justify our going to war?

“The indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons is a moral obscenity. By any standard, it is inexcusable. And despite the excuses and equivocations that some have manufactured, it is undeniable,”  John Kerry said. Is the chemical warfare in Syria the only moral obscenity in today's world?  Is it our role to punish those who inflict a moral obscenity?  Which of our vital interests does this action affect?

Silicone and the body

Back in the mid-1990s silicone breast implants were in the news, largely because of te number of lawsuits against the manufacturers of the device.  The major manufacturer, Dow Corning, went bust because of the thousands of lawsuits against it.  Silicone is still being used for breast implants, but its popularity has dwindled.

In Venezuela, silicone has been used to enhance buttocks for the past few years.  It is estimated that 40,000 have used the procedure.  But now there is a backlash, with people complaining that they cannot walk, sit or go to the toilet.  Fifteen deaths have been attributed to the procedure. 

We have wide-ranging interests

"The main thing I want to emphasize is that I don't have an interest and the people at the NSA don't have an interest in doing anything other than making sure that (...) we can prevent a terrorist attack,"  said President Obama on August 9, 2013. That statement does not appear to be true.  The next batch of Snowden documents show that we have been spying on the European Union, United Nations, the International Atomic Energy Agency (IAEA) and nations around the world.  The spying goes beyond the world of terrorism. 

One NSA program, referred to as Barney, states that its main targets are "diplomatic establishment, counter-terrorism, foreign government and economic." Another program, Ramparts-T, is concerned with "penetration of hard targets at or near the leadership level" -- in other words: heads of state and their closest aides. We eavesdrop in 80 of our embassies and consulates around the world.

Back in the 20th century we did sign some conventions - the Convention on the Privileges and Immunities of the United Nations and the Vienna Convention on Diplomatic Relations of 1961 - which said that no espionage methods are to be used. I guess they don't count in the 21st century.

Look at the banks' balance sheets

A typical TBTF bank has liabilities of more than 90% of their assets.  For healthy companies outside the banking world that number is more like 70%.  Why is that?  Is it because we, you and I, will bail out the banks if and when they fail?  There has been a fair amount of talk about Basel III, but it would allow banks to borrow up to 97% of their assets.  Regulators here have mentioned tightening up Basel III, however these regulatory changes would still grant borrowing privileges up to 95%.

As Anat Admati writes:

We will never have a safe and healthy global financial system until banks are forced to rely much more on money from their owners and shareholders to finance their loans and investments. Forget all the jargon, and just focus on this simple rule.

$167, 731 is a lot of money

especially when it's the annual cost to feed, house and guard each inmate in your prisons.  But that's what it costs New York City for each of its inmates, of whom there are 12,287.  The city's per inmate costs are almost three times that of the state of New York and more than five times that of forty states.

The primary reason for these high costs is that there are just about two prisoners for every guard; personnel costs are 83% of the total costs.  Why so many guards are needed is a good question as 76% of the inmates in the city were waiting for their cases to be disposed.

Bloomberg opposes tobacco section of TPP

Mayor Bloomberg has done a lot to curb the use of tobacco around the world. So, he is quite upset about the Obama Administration agreeing to eliminate the safe harbor provision relative to tobacco that has been part of the Trans-Pacific Partnership (TPP) trade agreement.  The safe harbor provision would have prevented the tobacco industry from interfering with governments’ sovereign right to protect public health through tobacco control laws. Mr. Bloomberg feels that, at least as regards tobacco the "deal that sells out our national commitment to public health, and forfeits our sovereign authority over our tobacco laws, does not merit the support of Mr. Obama; of the Senate, which would have to ratify it; or of the American people."

Why Mr. Bloomberg is not as concerned about other provisions of the TPP escapes me.  Perhaps, it's because he - like members of Congress and we citizens - doesn't know very much about the other provisions, as the treaty and the negotiations surrounding it have been kept secret by Obama and company.   

In the words of United States Trade Representative Ron Kirk the TPP  “will create binding policies on future Congresses in numerous areas,” including “those related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, professional licensing, state-owned enterprises and government procurement policies, as well as financial, healthcare, energy, telecommunications and other service sector regulations.”  

Why won't Obama reveal the details of this treaty?

Things are not getting better

A report by Sentier Research concludes that households are earning 4.4 percent less, when adjusted for inflation, than they were when the economic recovery began four years ago.
In June, the median income wast $52,098; in December 2007 it was $55,480.  Only in the Midwest were people doing a little better as their earnings grew by 0.8%.

One could question Sentier Research.  I, for one, had never heard of them. But, if you believe their web site, they seem to be quite competent. They've been around for 16 years and have an interesting list of clients, including the Census Bureau.

Legal vs. Illegal Drugs

Question: Do more people die from illegal or legal drugs?  In America the answer is legal drugs, particularly prescription painkillers known as opioids (e.g., Vicodin, oxycodone, hydrocodone).  More than 15,000 Americans die every year from overdosing on opioids.  That's more than those who die from overdosing on all illegal drugs, such as heroin or cocaine.  Things have reached a state where more people die from opioids than car accidents.  Addiction to opioids kills more than addiction to heroin and other illegal drugs combined.

The DEA has revoked the license of doctors and pharmacies including the largest, CVS and Walgreen's.  One doctor was selling as many as 1,700 oxycodone tablets a day; other doctors seem to have been no more than drug dealers. The pharmacies are accused of selling "extremely large amounts" of these drugs in other than "legitimate channels".  Pharmacy sales of these drugs was $9 billion last year, double the volume of ten years ago.  The number of prescriptions has quadrupled in that time, so that now Vicodin is the most prescribed drug in the country.

Seniors and marijuana

It's been reported that seniors are the fastest growing population of medical marijuana users in the U.S. It is being used for a wide variety of ailments including chemotherapy side effects, arthritis, glaucoma, chronic pain and malnutrition. The drug's growth is due to the fact that seniors become increasingly susceptible to the dangerous side effects and growing dependency of multiple prescription medications. 

There is a world of difference between smoking marijuana in your private home and doing it when you move to an assisted living facility, which is regulated by the states and/or the federal government.  In addition to the possible loss of their license, the facility has to answer a number of questions:  Where will marijuana be stored? How do patients know how much to take, and who is going to administer it if they can't do it themselves? Since smoking isn't allowed in most assisted living facilities, how can medical marijuana be used, especially if it infringes on another patient's rights? Who will be able to get it for residents?

The State Department or the Defense Department?

Stephen Walt has a very interesting article about true successes on the international stage by us.  He mentions the following: the Marshall Plan, Bretton Woods, the GATT & the WTO, the Non-Proliferation Regime, the Opening to China, the Egyptian-Israeli Peace Treaty, German Reunification, NATO, the Dayton Accords, the first Gulf War.  Of course, there are others, but the previous are the ones that came most readily to his mind.  His point being that these successes were the result of diplomacy, where the use of force played little or no role.  It's very difficult to list any real military successes since WWII.  Yet we, as a nation, are relying more and more on war rather than diplomacy.  Is he missing something?

Getting more severe

Tepco has not yet solved its water problem.  Japan's nuclear agency has upgraded the severity level of a radioactive water leak at the Fukushima plant from one to three on an international scale where seven is the worst.  The water is so radioactive that teams must be constantly rotated and it is clear that most of the toxic water has already disappeared into the ground.  The radiation level is strong enough to give someone a five-year dose of radiation within one hour, so the repair crew has to be constantly rotated.

DEFCON 2

That's how Ryan Chittum refers to The Guardian's experiences since publishing the first of the Snowden reports.  British authorities have demanded the return of the classified material.  They have gone so far as to smash some of the paper's hard drives.  The Guardian now has moved all of its work on the Snowden affair to the U.S. in the belief that they will have more freedom there. 

Chittum's classification of these and other incidents as DEFCON 2 is explained below:

In light of Rusbridger’s disclosures, it’s even clearer that the detention of Miranda is part of an attack on American journalists authorized at the highest levels of the British government, and it’s an attack that is at the very least implicitly backed by the Obama administration.

We have the spectacle of communications between two American journalists-in-exile—reduced to passing information via courier because their government is spying on everything they do online—busted up by the US’s top ally, apparently with no protest from the Obama administration, which was given a heads-up.

On top of that, Greenwald’s paper has been threatened by its own government with prior restraint and had its hard drives smashed in its basement to make a (stupid) point.

This is police-state stuff. We need to know the American government’s role in these events —and its stance on them— sooner rather than later.

Strengthening the Stress Tests

In a paper entitled "Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice" the Federal Reserve spelled out areas that are weak within 18 major banks.  

The Fed was particularly concerned with risk - identifying, measuring and maintaining risk is a major area requiring improvement by the banks.  

The banks also have some problems imagining that they could be seriously damaged by a repeat of the Great Recession; "capital policies...were not comprehensive or detailed enough to provide clear guidance about how the BHC would respond as its capital position changed in different economic circumstances".

Some people are truly weird

Take, for example, the 70-year-old Australian man who came to the hospital emergency room because he had blood in his urine.  The cause of the blood: he had inserted a 4-inch, 3-tined dessert fork in his urethra for sexual stimulation. Doctors were able to remove it without operating.

The doctors catalogue a list of objects people have willingly inserted in their bodies:

If one reviews current literature, it is apparent that the human mind is uninhibited let alone creative. The wide array of self-inserted foreign bodies include needles, pencils, ball point pens, pen lids, garden wire, copper wire, speaker wire, safety pins, Allen keys, wire-like objects (telephone cables, rubber tubes, feeding tubes, straws, string), toothbrushes, household batteries, light bulbs, marbles, cotton tip swabs, plastic cups, thermometers, plants and vegetables (carrot, cucumber, beans,hay, bamboo sticks, grass leaves), parts of animals (leeches, squirrel tail, snakes, bones), toys, pieces of latex gloves, blue tack, Intrauterine Contraceptive Devices (IUCD), tampons, pessaries, powders (cocaine), fluids (glue, hot wax).

The FBI and Mortgage Fraud

Bill Black uses the FBI’s 2010 Mortgage Fraud report to assert that the FBI will never prosecute the big banks for mortgage fraud because the agency accepted the Mortgage Bankers Association's (MBA) definition of mortgage fraud which, in the MBA's view, was caused by people seeking mortgages not by banks granting them.  Black claims that it was the banks that inflated property values and approved liars loans.

Not only did the FBI accept the MBA's definitions, it ignored a mail campaign by a coalition of appraisal organizations which charged that lenders were pressuring appraisers to place artificially high prices on properties [and] “blacklisting honest appraisers” and instead assigning business only to appraisers who would hit the desired price targets. This campaign lasted from 2000 to 2007 and was signed by 11,000 appraisers.

In 2006 the MBA was invited to comment on proposals by the government to better regulate the mortgage market. The association argued that the proposals would stunt innovation and limit borrower’s access to credit. 

Not being shy, Black concludes with this:

The FBI’s 2010 report is a Tea Party fantasy due to the MBA’s con.  It reports only on the vastly smaller and less damaging mortgage frauds by lower social status individuals who exploited the fraud vulnerabilities that the officers controlling the lenders created when they gutted their underwriting and suborned their internal controls to make it possible to make hundreds of thousands of bad loans pursuant to the accounting control fraud “recipe” for a lender.  The FBI report ignores the twin massive control frauds by mortgage originators that drove the financial crisis and led to endemic fraud in the sale of fraudulently originated mortgages to the secondary market.  The MBA has conned the FBI in 2007, and the FBI has remained conned.  The result is that the FBI operates under a faux definition of “mortgage fraud” in which it is conceptually impossible for the banks and their controlling officers to be criminals.  The FBI is treating even the Nation’s most fraudulent mortgage lenders as the innocent “victims” of fraud by primarily low social status customers who often lack any financial sophistication.

Head of dead copperhead snake bites its own body

Video is on the web site of The Guardian. Please click 'Link to this video' below (in blue).  The video reminds a Duncaster correspondent of the U.S. Congress.


!-- Start of guardian embedded video -->

Everybody is a terrorist

At least when it comes to trying to stop further investigation of the NSA.  Authorities at Heathrow detained the partner of Glenn Greenwald, the journalist in league with Edward Snowden.  The partner, Daniel Miranda, was detained under schedule 7 of the Terrorism Act 2000. The law has come under fire in England for it applies only at airports, ports and border areas and allows officers to stop, search, question and detain individuals for a maximum of nine hours.  Those detained have no right to a lawyer and if they refuse to cooperate they are subject to criminal prosecution.  Authorities took from Miranda electronics equipment including his mobile phone, laptop, camera, memory sticks, DVDs and games consoles.

Obviously, Miranda is not a terrorist and could not be conceived of as being one.  Yet, the UK invoked this law to find out what they could about Snowden's treasure trove of information about NSA.  It is highly unlikely this would have happened without England getting the ok from the US.  It's probable that we initiated the action.

How safe from terorists are our nuclear plants?

The Nuclear Proliferation Prevention Project at the University of Texas at Austin doesn't think we are very safe.  They think that we would have problems with airplane attacks, rocket-propelled grenades and more than a small handful of attackers.  

Wasn't 9/11 an airplane attack?  Aren't rocket-propelled grenades relatively common in Iraq and Afghanistan? Couldn't terrorists assemble a group of 50 or so fairly readily?

Read more here: http://www.mcclatchydc.com/2013/08/15/199512/all-us-nuclear-reactors-vulnerable.html#storylink=cpy

Colbert on fracking

The Colbert Report
Get More: Colbert Report Full Episodes,Video Archive

Some interesting charts about our prisons

from American Prospect

If it walks like a duck

Apparently, Ford assumed that because its new C-Max Hybrid had the same engine, transmission and weight class as its Fusion, the mileage would also be the same.  Consumer Reports found that the claimed performance of 47 miles per gallon was just that - a claim.  The magazine's tests showed 37 miles per gallon.  The EPA ran tests which showed that Ford's claim of 47 was not valid.  However, the EPA allowed Ford to specify 43.  Not only does Ford look stupid, but the mistake will cost them money as they are issuing a rebate of $550 to all purchasers of the C-Max.

Are 2,776 incidents too many?

The Snowden reports continue.  The Washington Post has revealed the result of an internal audit conducted by NSA in May 2012 of the previous 12 months of activities at its offices in the DC area.  The audit found 2,776 incidents of unauthorized collection, storage, access to or distribution of legally protected communications. If it had audited all of its offices, I'm sure that there would have been a lot more.  

But the NSA is run by humans and uses devices and software made by humans.  Ergo, it will screw up. So, do we believe a NSA person who says,“You can look at it as a percentage of our total activity that occurs each day. You look at a number in absolute terms that looks big, and when you look at it in relative terms, it looks a little different.”?  Or, do we think that maybe the NSA has overstepped its boundaries?

Yes, 10% of the incidents were due to typos.  Some were failures of due diligence or violations of standard operating procedure.  Some violated a court order or did not have authorized use of data about more than 3,000 Americans and green-card holders. And at least one violated the Fourth Amendment, which prohibits unreasonable searches and seizures.

It looks to me that not all of these incidents could be attributed to the normal screw-ups made by humans.  Clearly, management was at fault in the matters of due diligence and violating SOP.  I would doubt that lower management would be so stupid as to violate court orders or the Constitution. But, NSA did these things.  Would we have known if Snowden had not opened the curtain?

How transparent is our government?  Maybe we should ask Winston Smith?

More Mayberry, Less Fallujah

August 15, 1945

Questions for the next Fed Chair

Senators Sanders and Warren propose the following:

Question 1: Do you believe that the Fed's top priority should be to fulfill its full employment mandate?

Question 2: If you were to be confirmed as chair of the Fed, would you work to break up "too-big-to-fail" financial institutions so that they could no longer pose a catastrophic risk to the economy?

Question 3: Do you believe that the deregulation of Wall Street, including the repeal of the Glass-Steagall Act and exempting derivatives from regulation, significantly contributed to the worst financial crisis since the Great Depression?

Question 4: What would you do to divert the $2 trillion in excess reserves that financial institutions have parked at the Fed into more productive purposes, such as helping small- and medium-sized businesses create jobs?

Stop and Frisk Internationally

Stephen Walt thinks "Stop and Frisk", the NYC Police policy which has just been ruled unconstitutional, has been adopted by us in our international affairs.

"It really is quite funny: The United States is still the world's strongest economy, and it has the world's most advanced and capable military forces, the world's most reliable nuclear deterrent, and no great powers nearby. Yet it finds itself chasing spooks and ghosts all over the world because it has somehow convinced itself that it is in fact very, very vulnerable. I'm not saying that no dangers exist, but hardly any pose a serious threat to the American way of life. Until the U.S. political system is able to calibrate these dangers in a more sensible way, the country is likely to continue chasing fantasies. And the tragic part is that many things the country is now doing may in fact be making these problems worse."

Economists are people

Sometimes they are nasty people as Bill Black demonstrates in a recent article about Rogoff, Stiglitz, Krugman and Rajan. Black does not refer to private conversations or communications. He recites excerpts from the public writings of these people with a focus on Rogoff.  Here are some of the more interesting comments:

Stiglitz - IMF was staffed with “third rate” economists.

Rogoff - (Stiglitz is) a “loose cannon” who had “slandered” the IMF staff, slammed him for refusing to “admit to having been even slightly wrong about a major real world problem,” suggested he was so arrogant that he doubted that Paul Volcker was “really smart,” admitted that Stiglitz had a few ideas with which the IMF would “generally agree” because most of them were “old hat,” described Stiglitz’s most recent book as “long on innuendo and short on footnotes,” derided him as pretending to see himself “as a heroic whistleblower” when he was actually peddling “snake oil,” described Stiglitz views as being most analogous to Arthur Laffer’s “voodoo economics” (cleverly and deeply insulting on multiple levels), accused Stiglitz of lacking faith in markets and having faith in increasingly democratic governments (“you betray an unrelenting belief in the pervasiveness of market failures, and a staunch conviction that governments can and will make things better”), and ended with a wonderfully nasty “compliment” that compared Stiglitz to a famous scholar who suffers from often disabling mental illness (“Like your fellow Nobel Prize winner, John Nash, you have a ‘beautiful mind.’ As a policymaker, however, you were just a bit less impressive.”)  To top off this list, Rogoff told Stiglitz that he should pull his book from publication because it “slandered” a senior IMF official.

Rajan - accuse Krugman of being “paranoid.

Accounting for lease payments

Chesapeake Energy is a big player in the oil and gas business in Pennsylvania.  Over the years it has signed many, many leases with Pennsylvania residents, mainly former farmers.  The company's pitch has been that the lessees will become millionaires in a few years of receiving royalty payments.  One of the lessees got a check for $8,506 for his first month’s share of the gas produced by the wells on his land.  Four months later the wells were producing the same amount of gas, but the royalty check was for $1,690.The difference was for “gathering” expenses; what these consisted of was never explained.

The companies seem to care little for the leases as they deduct expenses for transporting and processing natural gas, even when leases contain clauses explicitly prohibiting such deductions.Another scheme is to set up subsidiaries or limited partnerships to which they sell oil and gas at reduced prices, only to recoup the full value of the resources when their subsidiaries resell it. Royalty payments are usually based on the initial transaction.  

ProPublica has been investigating oil and gas royalties paid to private parties and the government and has concluded that the companies are keeping billions of dollars in royalties out of the hands of private and government landholders.

A Catholic Point of View

From Bishop Robert Lynch of St. Petersburg, Florida:

I am convinced that many so called Pro-Life groups are not really pro-life but merely anti-abortion. We heard nothing from the heavy hitters in the prolife movement in the last week when Florida last night executed a man on death row for 34 years having been diagnosed as a severe schizophrenic. Which personality did the state execute? Many priests grow weary of continual calls to action for legislative support for abortion and contraception related issues but nothing for immigration reform, food aid, and capital punishment. And, this is a big one, priests don’t like unfair attacks on things they highly value and esteem, like the Catholic Campaign for Human Development and Catholic Charities and Catholic Relief Services.

The spies know what's good for us

Have you ever heard of Senate Resolution 400? It established the Senate Select Committee on Intelligence. One of the sections of the resolution gives the committee the power to disclose classified material if it deems "that the public interest would be served by such disclosure”.  The committee has never tried to act on this.  In fact, some of the members of the committee, including Wyden, were unaware of the provision.

But the committee does not like to offend the security professionals.  It spent years and $40 million investigating the CIA’s so-called harsh interrogation program, which included waterboarding, secret prisons and allegations of torture. The committee’s current chair, Sen. Dianne Feinstein, D-Calif., has called it the committee’s most comprehensive and important oversight to date. So why has it not been released to us?

Misrepresentation or Fraud?

How many of the mortgages sold in the run-up to the Great Recession were questionable?  An academic paper,  “Asset Quality Misrepresentation by Financial Intermediaries,” says that quite a few were.  While the authors only looked at two measures of loan quality: loan-to-value—how much the property was worth relative to the amount borrowed on it—and whether the property was going to be owner-occupied or bought as an investment to rent out, they concluded:

More than 27% of loans obtained by non-owner occupants misreported their true purpose and more than 15% of loans with closed-end second liens incorrectly reported no presence of such liens. The propensity of banks to sell loans that misrepresented asset quality increased as the housing market boomed, peaking in 2006. Overall, more than 9% of loans had one of these misrepresentations in our data. Note, however, that because we look only at two types of misrepresentations, this number likely constitutes a conservative, lower-bound estimate of the fraction of misrepresented loans.

Read that last sentence again.

Can we learn anything from Detroit's bankruptcy?

Joe Stiglitz shows us that Detroit's bankruptcy didn't just happen.  It's the result of our governmental failures plus the growing economic inequality.  Some of these failures are: "underinvestment in infrastructure and public services, geographic isolation that has marginalized poor and African-American communities in the Rust Belt, intergenerational poverty that has stymied equality of opportunity and the privileging of moneyed interests (like those of corporate executives and financial services companies) over those of workers."  And our inability to control the financial industry. "Rather than saving our communities, our politicians focused more on saving the bankers, their shareholders and their bondholders."

We need to provide better public transportation, an education system that promotes a modicum of equality of opportunity, and a system of metropolitan “governance” that works not just for the 1 percent, nor even for the top 20 percent, but for all citizens.

And on the national level, we need policies — investment in education, training and infrastructure — that smooth America’s transition away from a dependency on manufacturing for jobs.

Detroit’s bankruptcy is a reminder of how divided our society has become and how much has to be done to heal the wounds. And it provides an important warning to those living in today’s boomtowns: it could happen to you.

Keeping us safe

Brad DeLong doesn't think much of Obama's 'changes' to his surveillance policies.  He thinks that if Obama was really serious he could have accomplished five years ago the proposals he talked about on Friday; he had the power and did not need Congressional approval.  Here's DeLong:

He could have:

• had the government's presentations to FISA include arguments from an advocatus diaboli
• created a task force
• established internal executive-branch safeguards against abuse of §215
• released his own administration's justifications
• required the NSA to explain what it was doing.

  Words, words, words!

Arresting a JPMorgan employee?

The NY Times says the arrest of two former JP London employees is imminent.  The arrest stems from the 'London Whale' incident. They will be charged with hiding the amount of the losses as they started to mount. Naturally, the employees are not officers, one is a manager, the other a trader.

I wrote a week ago that JP is being hit with a slew of investigations.  I learned in this article that the SEC may actually ask JP to admit their wrongdoing.  This would be a big switch by the SEC as in all other cases they have let JP and other banks off the hook with a fine and allowed the banks to “neither admit nor deny wrongdoing.”  Gee, maybe they will eventually try a high-level employee.

Fish are not jumping in Hisanohama

Hisanohama is a small fishing village up the coast from the Fukushima nuclear complex.  But the fishermen have not fished since March of 2011, 29 months ago.  The problem is the tons of contaminated groundwater leaking into the ocean from Fukushima every day.  It does not look as though Tepco will be able to solve the problem for at least another two years.  Many are urging the government to take over, but so far they have not.

Arsenic and Old Water

The question of fracking's effect on water contamination is still up in the air as far some UTexas researchers are concerned. In a recent study they found groundwater near natural gas fracking sites in Texas’ Barnett Shale contained arsenic, selenium and strontium which were above EPA’s maximum contaminate limit for drinking water. Previous tests of the same area did not find the same level of metals, far from it. At the same time they found uncontaminated water near some gas wells.  The researchers do not believe that they have a smoking gun.  The EPA agrees with them, despite water contamination having been reported in more than a thousand places where drilling is happening. 

The Hip Op-eration Crew

The youngest is 66, the oldest 96.  They are from New Zealand.  They will be competing in the World Hip Hop Dance Championships in Vegas this weekend.

August 9, 1945 - Nagasaki

1970 Dylan

with some historic photos from the Farm Security Administration.

The Joys of a Presidential Visit

Mr. Obama, his family and hundreds of other government employees arrive on Martha's Vineyard Saturday.  Mr. Obama and company will likely have a good vacation, but thousands of residents and vacationers will not, although there are a lot of other things going on.  Visits in previous years have been bad enough with traffic halted while the presidential motorcade goes to the golf course and the beach, restaurants closed while the family dines in the restaurant next door and a host of other inconveniences because we worship the office of president.  This year a major road on the island will be shut down to everyone but those with the right connections.

Do we need to spend so much money, time and effort ensuring that the political elite get very special treatment?  I'm reminded of a former governor of Massachusetts who took the subway to work most days, just like most working stiffs.  But that was in the last century.  In the 21st century security is the most important governmental task.  Consideration of such things as freedom and liberty and the likelihood of a terrorist attack are so old hat.

Paying dead people

Two agencies of the USDA - Natural Resources Conservation Service (NRCS) and Risk Management Agency (RMA) - have made payments to people who have been dead a year or more.  This is despite internal control standards that require them to validate their payments.  GAO examined the records for both agencies from fiscal 2008 to April 2012 and found that NRCS made $10.6 million payments on behalf of 1,103 deceased individuals 1 year or more after their death and RMA paid $22 million in subsidies and allowances  on behalf of an estimated 3,434 program policyholders 2 or more years after death.

Doing it all at once

The Navy has been working on the Littoral Combat Ship (LCS) for a while.  The ship is somewhat different in that it is intended to be reconfigurable to perform three primary missions: surface warfare; mine countermeasures; and anti-submarine warfare.  Although the ship has not yet been built, the Navy has already contracted for 26 of them.  There appears to be a problem or two with the Navy's plans:  design is not complete yet ships are being built;  ships are being built although the testing of these new ships has not been completed. And the GAO has questions about the underlying business case. "Elements of the LCS business case, including its cost, the time needed to develop and field the system, and its anticipated capabilities have degraded over time. There are also significant unknowns related to key LCS operations and support concepts and the relative advantages and disadvantages of the two seaframe variants."

Oh well, it's only at least $40 billion.  Ho hum.

August 6, 1945

Some memories

Terrorism will be with us for a long time

It looks as though Obama was wrong in saying “not every collection of thugs that labels themselves as al Qaida will pose a credible threat to the United States.” Why are we closing embassies unless we fear a major al Qaida attack? Do the drone attacks help al Qaida recruit more than they supposedly decimate its leadership?  Has all the spying by the NSA reduced the effectiveness of the terrorists?  It's hard to solve any problem unless you acknowledge reality. Is our government living in a real world?

A bug in a "Cutting-Edge Toilet"

A Japanese company, LIXIL, has introduced the Satis, "a cutting-edge toilet with advanced electronics technology".  The toilet is controlled by a sensor and it "opens its lid, plays music, flushes and closes the lid automatically in the reaction to your movement".  At $5,686 the toilet is not cheap.

As with any computer program built by man, errors are possible and this toilet is controlled by an Android application.  Computer security experts have discovered that the Pin code for every toilet model is hardwired to be four zeros (0000), meaning that it can be activated by any phone with the My Satis app. Use your imagination to think what could be done to this cutting-edge toilet and its users.

"Right now, we have an emergency"

That's a quote from the head of a Japanese Nuclear Regulatory Authority task force, Shinji Kinjo, with regard to our old friend, Fukushima.  Contaminated water, which has come from the 400 tons of groundwater pumped into the plant every day to cool the reactors, could rise to the ground's surface within three weeks.  This would join the 20 trillion to 40 trillion becquerels of radioactive tritium which are already there.

There appears to be no place to store the contaminated water as the more than 1,000 giant holding tanks surrounding the plant are nearly all full.

Traveling First Class

That's what some deans at UCLA prefer when they fly on business.  After all, they are making in the six figures so they are entitled to a perquisite or two when traveling on school business.  But, UCLA being a state school and the times being tough for most state agencies, their policy is allow first or business class flying only if it is medically necessary.

It appears as though some - 6 of 17 - of the deans at UCLA have medical problems, as their doctors have put it in writing.  As a result, over the past few years the university has spent $234,000 more than it would have for coach-class flights. Also they have taken chauffeured town cars to the airport and spent nights at a Four Seasons hotel at university expense.

We don't know what these medical problems are.  However, the dean who heads the Anderson School of Management, is a pretty good biker and a “cardio junkie”; she has tackled the arduous 56-mile cycling leg of the long course relay at Monterey County’s Wildflower Triathlon. One of the dean's tasks is to raise money for the school, thus she is on the road a lot and spends more on airfare and other travel expenses ($647,000 from 2008 to 2012) than any other UCLA dean or the chancellor, and she also far outpaces her counterpart at UC Berkeley’s Haas School of Business.  In response to a reporter's inquiries about these travel expenses, UCLA says, “Globalization is one of the biggest priorities for Anderson, and the dean’s results have been remarkable, including many new global alumni chapters and global immersion programs, a new global center, two joint global degree programs and an applicant pool that is now over 50 percent from abroad.”  It may be that the global applicant pool is so large because tuition and fees have increased nearly 70 percent since the 2008 school year.

The dean of the School of Theater, Film and Television seems to be cheap.  Although she makes a good salary, she charges UCLA $5 to drop her dog at the kennel when she has to take a trip for the university.

Spending time in the hospital

Polio in the Brazil of the 1970s was a killer disease.  Children who contracted it usually died by the time they were 10.  Two have not yet died; they are in their 40s but have spent just about their entire life in a hospital.  They are hospital residents because of the danger of infection should they leave.  

Paulo Henrique Machado and Eliana Zagui are hooked up to an artificial respirator for most of the day. However, despite spending life in the hospital, Machado has trained as a computer animator and is now creating a television series about his life, while Zagui is a published author and also paints using her mouth.

Best photo from Hubble telescope

Astronomers voted on the best photos taken from the Hubble in the past 16 years. Here is the winner:

The Hubble's words on the winner: 
The Sombrero Galaxy - 28 million light years from Earth - was voted best picture taken by the Hubble telescope. The dimensions of the galaxy, officially called M104, are as spectacular as its appearance It has 800 billion suns and is 50,000 light years across.

I liked this one better:

 

The Ant Nebula, a cloud of dust and gas whose technical name is Mz3, resembles an ant when observed using ground-based telescopes...  The nebula lies within our galaxy between 3,000 and 6,000 light years from Earth. 

Courtesy of another Duncaster correspondent.