It ain't over

The NY Times reports that in July the

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re were 2,400,000 job openings and 14,500,000 unemployed in this country. That's a 6-1 ratio. When this year started, the ratio was 4-1. In the 2001 recession, it was 2-1. Yes, unemployment lags the recovery, but these numbers say that we have a long way to go before the recovery is in full swing.

Bucking the Odds

What are the odds of our 'winning' in Afghanistan now that we have a new strategy - hearts and minds? Two academics from the University of North Texas don't think the odds are very good; at best, it's a 50-50 proposition. They stu

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died sixty-six similar conflicts in the last century, i.e. conflicts where a foreign power tries to help another country defeat rebels. Details of the study are available here.

While a shift to a hearts-and-minds strategy resulted in a 'win' two-thirds of the time in post-WWII conflicts, such a shift being made after eight years of conflict resulted in zero wins. Couple this with the fact that no foreign nation has succeeded long term in Afghanistan. So, what do you place your bets on?

Doom and Gloom at Chrysler

Now it looks as though Chrysler has problems getting parts' sup

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pliers to produce parts for its new vehicles. I guess the deal in the auto industry is for the major manufacturer, e.g., Chrysler, to guarantee that a certain number of cars will be built and, if not, the parts makers can charge more for the parts. Chrysler will not make such a guarantee. So, the parts companies are not buying into the production of parts for the new Chryslers (nee Fiat).

In addition, Chrysler still hasn't decided where they will build these new models. Finally, the Fiat platform on which the new models are based results in a smaller car than the offerings from Toyota and Honda.

ROI

Two examples of the quality and moral fiber of our leaders:

• The House Appropriations Defense Subcommittee routed $100,000,000 of our money in earmarks to firms that hired the lobbyist, PMA Group, many of whose members worked for the committee. It was a good investment by the companies. They only spent $1,000,000 in campaign contributions. Oh, if only you or I had a 100-1 return on our investments.
• Two weeks after resigning as senator, Mel Martinez joined the lobbying firm, DLA Piper. He is not alone. In the past two years, five members of Congress resigned and joined a lobbyist.

The Stars or Us?

Jeffrey Sachs has a fair number of critics but his recent article, "The Failing U.S. Government", in Scientific American does make some strong points. It is obvious that the government is not operating on all cylinders. Sachs' reasons for this failure are the privatization of regulation, lack of planning, lack of skilled managers and the inability to see problems and their resolution in a unified manner.

I see a more basic reason - the quality of our leaders and of us. It isn't necessarily only a lack of talent, but, more so, it is an unwillingness to consider issues from a national point of view. And, as with so much of life, the fault is not in our stars but in ourselves. We elect these people.

Something nice for a change

For the past four years the Christian Science Monitor has been running a series entitled "Making a Difference". It's about some people who are doing good work for the world and not seeking the limelight. They're just doing what they see as their job and a fair number of people benefit from their efforts. It's refreshing to read in today's world.

Change You Can Believe In??

My growing disillusion with Obama has been manifest over the past few months. Garry Wills also appears to be disillusioned, but he thinks Obama's failures are due to the rise of the imperial presidency. He does have a point.

Anyway, I thought his summary of Obama's decisions seconding Bush was a good one.

The truth of this was borne out in the early days of Barack Obama's presidency. At his confirmation hearing to be head of the CIA, Leon Panetta said that "extraordinary rendition"—the practice of sending prisoners to foreign countries—was a tool he meant to retain. Obama's nominee for solicitor general, Elena Kagan, told Congress that she agreed with John Yoo's claim that a terrorist captured anywhere should be subject to "battlefield law." On the first opportunity to abort trial proceedings by invoking "state secrets"—the policy based on the faulty Reynolds case—Obama's attorney gen- eral, Eric Holder, did so. Obama refused to release photographs of "enhanced interrogation." The CIA had earlier (illegally) destroyed ninety-two videotapes of such interrogations—and Obama refused to release documents describing the tapes.

The President said that past official crimes would not be investigated—certainly not for prosecution, and not even by an impartial "truth commission" just trying to establish a record. He said, on the contrary, that detainees might be tried in "military tribunals." When the British government, trying a terrorist suspect, decided to use some American documents shared with the British government, Obama's attorney general pressured it not to do so. Most important, perhaps, was the new president's desire to end the nation-building in Iraq while substituting a long-term nation-building effort in Afghanistan, run by a government corrupted by drug trafficking and not susceptible to our remolding.

Even in areas outside national security, the Obama administration quickly came to resemble Bush's. Gay military personnel, including those with valuable Arabic-language skills, were being dismissed at the same rate as before. Even more egregiously, the Obama administration continued the defiance of the Constitution's "full faith and credit" clause, which requires states to recognize laws passed by other states, when it defended the Defense of Marriage Act, which lets states refuse to recognize gay marriages legally obtained in another state. Many objected when Dick Cheney would not name energy executives who came to the White House in 2002, though Hillary Clinton, as First Lady, had been forced to reveal which health advisers had visited her. Yet the Obama team, in June 2009, refused to release logs of those who come to the White House. (It later reversed itself, but only in response to a lawsuit.)

The Personal Touch

It really counts in Washington. The FDA scientists said more than once that a knee patch built by a company called ReGen Biologics was not safe. But, since ReGen is based in New Jersey and donated to the campaign war chests of NJ members of Congress, the FDA was convinced by the scientific arguments of the legislators that the device was safe. Today, the FDA is not sure they did the right thing and will re-evaluate.

Precedent is king

Bush ruled that he could indefinitely hold detainees without pressing charges. Obama agrees.

Change you can believe in??

Screwed by BofA?

James Kwak thinks we were. Kwak has a relatively complex article about Bank of America's recent deal with us whereby the bank paid $425,000,000

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to allow them to get out of their agreement whereby we guaranteed them against losses on bad investments by them. Kwak argues that we should have gotten a lot more, like almost $5 billion instead of less than a tenth of that. Many of the commenters advance the conspiracy viewpoint on the issue: it's the big boys vs. us.

A sidelight: the final bailout agreement was never signed by both parties

A Figment of Washington's Imagination?

That's a definition of the Afghan security forces - army and police - by Ann Jones, who seems to know something about Afghanistan. Her article has nothing good to say about the Afghan army or police. Our training them seems counter-intuitive when the "them" probably includes members of the Taliban. We're training them to fight just like us with the equipment we use. Yet, the Taliban seem to be doing quite well without that equipment.

One of Jones' basic conclusions is that the army does not exist. Sure, we've trained people, but they have not been very visible when battles occur. Another conclusion is that the police are ineffectual. We refuse to accept reality. We still really don't understand Afghan culture and seem unable to accept the fact that in the fourth poorest nation on earth people might "join" the army or police because they want to eat.

A side point: We have begun replacing Kalashnikov rifles with M-16s, despite the fact that the Kalashnikov is a better weapon in the environment of Afghanistan.

Temptation

I can accept that people in positions of power have a lot of opportunities presented to them by those who require the powerful to act on their behalf. Hard as it is to write these words, I do believe that some of our leaders do resist such temptations.

The latest one who seems to have succumbed to temptation is Congressman Michael Ross. I had never heard of him although he was first elected to Congress in 2000. He has become m

The question that ProPublica raises is whether special interests have gotten to Mr. Ross. Two years ago Mr. Ross and his wife, a pharmacist, sold a building to the fifteenth largest drug chain in the country. The building housed the couple's pharmacy. The sale price of $420,000 seems out of line, as the building has been valued between $198,000 and $269,000. The Rosses also sold the pharmacy business for at least $500,000 and maybe as much as $1,000,000. And Ms Ross signed a non-compete agreement in exchange for somewhere between $100,000 and $250,000.

In addition, in the past two years Mr. Ross has collected almost $350,000 from health-related industries. His connections with these industries goes further. The National Community Pharmacists Association publicly thanked Ross for an amendment to the health care reform bill that would create greater transparency in the operations of pharmacy benefit managers, who act as clearinghouses for insurance company reimbursements for pharmaceuticals. The National Association of Chain Drug Stores thanked him for introducing legislation authorizing payments to pharmacists to train patients in how to manage their medications.

Has Mr. Ross fallen to temptation?

The Graveyard

From Mike Keefe of the Denver Post

Good bank, Bad bank

There has been a lot of talk about putting a bank's toxic assets into one entity, a bad bank, and leaving a good bank with viable assets. If you have the bad bank owning the good bank, you have a situation where one of the entities. the good bank, has a solid base of capital.

Barclay's has adopted a variant of the good bank, bad bank approach; they use a variant of the structured investment vehicle (SIV) approach where they are on the hook if a loan sours but their books - at least those they show to the public - do not show the liability.

What they've done is sell $12.3 billion of toxic assets to a "new" non-bank, Protium Finance. But it so happens that Protium is being financed with a $12.6 billion loan by Barclay's and largely staffed by "former' Barclay managers. Interestingly, repayment of the loan with a relatively low rate of interest is all Barclay's will get as, if things go well, the returns on Protium's dealings will be disbursed as follows: (1) fund management fees; (2) a guaranteed 7% return to investors; (3) repayment of the Barclays loan; and (4) residual cash flows to the investors. If things do not go well, Barclay and its shareholders get stuck with the loan.

The War on Drugs

Portugal decided to get out of the war in 2001 and decriminalized drug use and possession. Here are some of the results of that move, courtesy of Mark Perry:

1. There is little evidence of drug tourism: 95% of those cited for drug misdemeanours since 2001 have been Portuguese.

2. The level of drug trafficking, measured by numbers convicted, has declined.

3. The incidence of other drug-related sexually transmitted diseases has decreased dramatically.

4. Deaths from drug overdoses have also decreased dramatically.

5. The number of addicts registered in drug-substitution programs has risen from 6,000 in 1999 to over 24,000 in 2008, reflecting a big rise in treatment (but not in drug use).

6. Between 2001 and 2007 the number of Portuguese who say they have taken heroin at least once in their lives increased from just 1% to 1.1%.

7. Portugal has one of Europe’s lowest lifetime usage rates for cannabis.

8. Heroin and other drug abuse has decreased among vulnerable younger age-groups.

9. The share of heroin users who inject the drug has also fallen, from 45% before decriminalisation to 17%.

10. Drug addicts now account for only 20% of Portugal’s HIV cases, down from 56% before.

How much are we spending every day on this war? How many wars can we fight?

George wants to know

George Wilson, a reporter of the old school, has some questions he'd like to ask our leaders about Afghanistan.

Defense Secretary Gates:

• Would you agree that today’s rela­tively small Army would be stretched to the breaking point by sending thousands more soldiers to Afghanistan on top of the 68,000 due to be on the ground there by year’s end?
• How many troopers within that 68,000 will be on their sec­ond and third tours to the region? How many of them are being held beyond the time they signed up for under stop-loss author­ity? How many of them are National Guardsmen and from what states? Where is a governor to go for backup if his state is hit by a terrorist attack, his police and firemen are overwhelmed and there is no Guard to call up because it is deployed overseas?
• What is your personal opinion of how many U.S. troops should be deployed to Afghanistan? How long should they stay there? What is your definition of victory or success in Afghani­stan?
• You have talked about the need to send more anti-bomb spe­cialists to reduce casualties from improvised explosive devices. It takes 11 months of intense training at Florida’s Eglin Air Force Base to train a soldier, sailor, marine or airman in the intricacies of finding, disarming and destroying an IED. These explosive ordnance disposal specialists are already in short supply. Where are you going to get additional ones for Afghanistan?

Adm. Michael Mullen, chairman of the Joint Chiefs of Staff:

• What is your personal opinion, not the administration’s party line, of how many U.S. troops would be required to pacify Af­ghanistan and protect civil affairs workers who would be in re­mote villages digging wells, building schools, providing health care? How many non-U.S. NATO protec­tors can you count on getting and where are they willing to serve in Afghanistan? How long would pacifying and protect­ing forces have to stay in Afghanistan? How would you meet emergencies else­where in the world with so many troop­ers tied down in Afghanistan? What is your definition of suc­cess in Afghanistan?

Gen. Stanley McChrystal, new field commander in Afghani­stan.

• What is your personal opinion on how many U.S. troops would be required to beat back the Taliban and al-Qaida and pacify Afghanistan? How long would the American force have to stay in Afghanistan? How many civil affairs workers would you need to improve life in Afghan villages? Where are they going to come from and in what number? How many armed Afghan sol­diers and police would you need to protect the villagers and the people digging wells, building schools and running health clin­ics? Do you trust the Afghan protectors or would you salt their units with U.S. soldiers and Marines to train the Afghans and keep them from getting out of line? Do you have the authority to pursue the Taliban and/or al-Qaida into Pakistan? Would the Pakistani government allow you to wipe out their base camps in Pakistan? If not, how can you hope to win?

Secretary of State Clinton:

• Do U.S. ground forces have the right to pursue the Taliban and al-Qaida into Pakistan? To wipe out their base camps? If the Taliban and/or al-Qaida moved their bases into Saudi Arabia, what could we do about it? Is that a possibility? Do you think Afghan villagers feel a loyalty to their central government or to warlords who can protect them? Many of your employees said “Hell no, we won’t go” when asked to go into the Iraqi countryside. What will you do if they refuse to go into Afghanistan?

After trying to win hearts and minds in South Vietnamese villages, the Marines wrote this in one of their many learned reports: “One overriding fact continually presented itself about the success or failure of civic action in rural construction pro­grams: No success was possible without adequate security. The peasant in the rural areas, who must live with the VC (Vietcong) both night and day, is reluctant to overtly support any program that does not provide adequate security for himself and his fam­ily against VC terrorist tactics.”

• Madam Secretary, if you agree that Afghan villagers do not trust their central government or its forces, where is that kind of security going to come from? Do you agree that the follow­ing statement by one of your predecessors, Colin Powell, about the Vietnam of yesterday applies to the Afghanistan of today? “When we go to war, we should have a purpose that our people understand and support. … In Vietnam we had entered into a half-hearted, half-war with much of the nation opposed or indifferent while a small fraction carried the burden.”

It would be nice to hear the answers.

Don't cheat on your spouse

If you do in Aceh province in Indonesia, you'll be stoned to death. The provincial parliament approved this law unanimously along with a law that prescribes 100 lashes and 1,000 grams of gold or up to 100 months in prison for homosexual or lesbian activities. Allah must be served.

Sometimes knowledge can be profitable

This is especially the case when it comes to knowledge about financial matters. While the SEC has rules that try to limit the advantages of insider trading, there are no such rules that apply to Congress. And, with a lot of attention being devoted to financial matters in today's world, Congressmen, their aides and sycophants do pick up a lot of information that could help one trade smarter. For example, a study by a Georgia State professor concluded that some senators did 12% better than the market when trading. Congressmen were not as knowledgeable; they only bettered the market by 6%. For the past three years there has been an attempt to make our leaders subject to regulations similar to those that apply to corporate insiders; this has met with failure thus far.

We have the same problem with employees of the SEC. It has guidelines to prevent 'insider' trading, but no mechanism to monitor the situation. In the words of the SEC Inspector General, “The SEC had essentially no compliance system in place to ensure that its own employees, with tremendous amounts of non-public information at their disposal, did not engage in insider trading themselves. The existing disclosure requirements and compliance system were based on the honor system, and there was no way to determine if an employee failed to report a securities transaction as required.”

Choking?

Defense News raises the question as to whether Obama will follow through on his VFW speech last month when he promised an end to "the special interests and their exotic projects that are years behind schedule and billions over budget." They don't think so.

The article is a list of chicanery effected by the Congress with regards to defense appropriations. Here are a couple of mind-blowers. Yes, they cut money for the F-22 for our air force, but they approved spending money to modify the plane for foreign sales. They keep adding to the supply of C-17s although the Air Force says it has enough. The most sinful aspect of the whole affair is how they intend to pay for many of these toys - by raiding the Pentagon's Operation and Maintenance account, which is how the Pentagon pays for little things such as training, spare parts, weapon maintenance and all the other things needed most to support troops at war.

Okay, one can justly decry the incompetence and greed of the Congress, but the really disheartening aspect of the whole thing is that it sounds that Obama and company will go along with the bandits.

Change you can believe in??

Both are war criminals

The UN has accused both Israel and the Palestinians of committing war crimes in the recent Gaza war. Israel is accused of using 'disproportionate force', Palestine of launching rocket attacks against Israel. Neither Hamas nor Israel thinks much of the report. Nonetheless, the UN report recommended that the Security Council require Israel, and the Gaza authorities, to report in six months about its own investigations into the alleged crimes. If they did not come up to scratch, then the International Criminal Court should become involved.

Will the report have any effect?