Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Month: November 2009 Page 1 of 4

The Surge in Afghanistan

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On November 30, 2009

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Why is anyone surprised?  Obama always said during the campaign that he believed more effort was required in Afghanistan.

This is what America voted for.

40% of Dems likely to not vote in 2010

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On November 29, 2009

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So nice to see the conventional wisdom catching up.

The Real Question isn’t about Summers Judgment

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On November 29, 2009

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So, a story about how Summers ignored repeated warnings about risking Harvard’s endowment:

It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard’s endowment, and Lawrence Summers, then the school’s president, would face off in a heated debate. The topic: cash and how the university was managing – or mismanaging – its basic operating funds.

Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment’s risky mix of stocks, bonds, hedge funds, and private equity. Meyer’s successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.

“Mohamed was having a heart attack,’’ said one former financial executive, who spoke on the condition of anonymity for fear of angering Harvard and Summers. He considered the cash investment a “doubling up’’ of the university’s investment risk.

But the warnings fell on deaf ears, under Summers’s regime and beyond. And when the market crashed in the fall of 2008, Harvard would pay dearly, as $1.8 billion in cash simply vanished. Indeed, it is still paying, in the form of tighter budgets, deferred expansion plans, and big interest payments on bonds issued to cover the losses.

What does this say about Summers judgement?  What does it say about the man who may be more in charge of Barack Obama’s administration’s economic policy than anyone else?

And the real question almost no one wants to ask, what does it say about Barack Obama’s judgment that he made this man his chief economic adviser and keeps him as his main economic adviser?

As Sean-Paul Kelley said, somehow everyone’s willing to take shots at people like Summers and Geithner, but not at the Czar:

This is just irritating.

I think the president is [focused on Main Street],” Brown told CNN’s “State of the Union.” “I think the vice president is. I think the advisers are mixed.”

The Ohio Democrat was responding to a handful of House members — Democrats and Republicans alike — who this past week had criticized Timothy Geithner for mishandling the bank bailout and failing to spur small business lending. Those members have called for the Treasury Secretary’s resignation in light of these perceived failures.

What Sherrod Brown is basically saying is this: “I love the Czar, Long Live the Czar, but down with his ministers.” Seriously, this is a narrative trope straight out of Czarist Russia, when the peasants, long oppressed and over-taxed bemoan the fact that their Czar loves them, but is surrounded by evil ministers. Brown knows better.

If the emperor is surrounded by bad advisers, the emperor is ultimately to blame.  He chose them, not the other way around.

The Progressive Brand

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On November 28, 2009

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The progressive brand is being burnt to the ground by Obama, this Congress and apologists for both.  Progressives have become the sort of people who believe in health care reform that isn’t, highlighted by a public option which is so non-robust it will cost more than equivalent private coverage.  Watching progressives scurry to take credit for a disaster has been extremely enlightening. Lemmings over a cliff thinking the promised land is at the bottom.

Dubai’s Problems and America’s

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On November 27, 2009

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Well since Numerian has written about it, I don’t have to, since he’s done a better job than I would have anyway.

Dubai gambled that it could turn itself into the Beverly Hills of the Persian Gulf now that it has no oil. It lost its gamble. The people who could afford a $10,000 purse have taken a big beating in the financial crisis and recession, and they are embracing a more moderate and discreet spending lifestyle. Dubai not only has half-finished buildings, it has many completed buildings uninhabited, like Miami and Las Vegas and other overbuilt desert mirages.

Couldn’t happen to a nicer city built on slave labor.  While this is “bad”, well, if it had to happen to someone…  Of course, who else might it happen to?

So here we have a country that used to have oil which has now run out of the same. It has turned to massive amounts of debt to sustain not only its existing lifestyle, but to build a fantasy land of McMansions, luxury malls, trophy office buildings and theme parks for the wealthy. It has nothing anyone wants to buy and consequently stocks the shelves of its stores with goods from other countries it buys on debt. It has done all this using impoverished labor that works under a modern form of indentured servitude, in which the typical worker incurs excessive debts of their own that can never truly be paid off by their earnings. It creates an enormous income disparity between its privileged few and the huddled masses kept out of sight.

Sound familiar? When do you think global investors will start connecting these dots and ask: exactly what is backing the debt of the United States that has flooded the markets in the past nine years under Bush and Obama? At least Dubai had a presumed rich uncle in Abu Dhabi that would come to the rescue, even though now everyone realizes that was a very costly mistaken assumption. In the case of the US, the United States was the rich uncle everybody else looked to in order to solve global problems. Now that rich uncle has gone crazy in its own orgy of gambling, whoring, and over-indebtedness.

Except there is no one – absolutely no one – who can come to the United States’ rescue.

Go read the entire thing. Of especial interest is the question Numerian raises, but doesn’t answer—why didn’t the other Emirates bail out Dubai?  Are they running out of money? Oil?  Or just fed up with Dubai’s profligacy?

Note also that this is another indication that the last 10 years, economically, did not happen.  Much of the building that didn’t occur in the first world, happened in Dubai.  And that was an illusion, same as banks profits were.

So, of course, the current plan is to try and reboot the Busheconomy.  Get the land casino going again, reboot the financial casino, and party like it’s 2005.

Which is an even stupider plan than it was the first time since at least when Bush did it there was more of a real economy to cash out.  Being stupider than Bush is an accomplishment. In fact, it’s an accomplishment that is literally mind boggling.  My mind hurts every time I try and think like anyone stupid enough to do it.

The Mod Society

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On November 27, 2009

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This is some of the best news I’ve read in a long time:

So this enterprising young man, comedian Bob Kerr, started a Facebook group pithily entitled, “Bring Paul F. Tompkins to Toronto!” He asked for people to join the group if they were committed to seeing me perform. He asked that folks not join for “support,” that they not join just because they like joining groups, but that they only join if they were serious about wanting to come see me live in Toronto. Bob said, “You should only join if you’re actually going to be there.”

Within a few weeks, the group’s ranks had swelled to 305. I checked it out. It seemed legit! I booked a show.

A couple months later, I was in Toronto, performing two sold out shows on a Sunday night for two smart, respectful, appreciative audiences. These people didn’t come to “party.” They came to see a show. It was a magical night for me.

And it tasted like more.

I’ve become fed up with the comedy club system for reasons that would cause you to self-murder should I elaborate. I don’t want that to happen. I have long thought, There’s got to be a better way than this. But I had no idea what that way could be until my experience in Toronto.

So here it is: you provide the audience, I’ll provide the show.

This is the way the internet should work.  Making it possible to do what you want to do, in ways which which couldn’t have occurred before the internet.  Even if there were enough people in a local geographic cluster to support what you wanted to do, finding them was hard, often essentially impossible.

And while Tompkins needs a geographic cluster to give a show, the internet allows really thinly spread groups to connect: people who would never have been able to connect before.

One of my baseline “possible” models for the future is what I call the Mod Society or the Fab Society.  A fabricator is a manufacturing unit which can manufacture almost anything.  Get the plans, download into a fabricator, add raw materials to the fabricator, and it’ll make whatever the plans dictate.

Well, if they worked well, which they don’t.  But that’s the idea, and there are folks working hard on making them work and making them small enough and cheap enough that you can have one in your home, with larger ones in the equivalent of corner manufacturing stores.

Imagine you want a new toaster.  Go online, find one you like, download the specs to your fabricator, insert the necessary plastics and metals, let it churn for a while, and voila: new toaster!  Transportation of manufactured goods drops significantly, but more importantly, design opens up.  Think you can make a better toaster?  Great, upload it!  Add a payment system, and voila—the Fab Society.  Which is, more importantly, a design society where people make things.

At the beginning of the industrial revolution, up through the 50’s and 60’s, you could make a lot of things yourself, and if you couldn’t make them yourself, you could at least repair them.  The mindset of people who do that is miles different from people who are pure consumers.  And, I would argue, far more healthy.

This can be extended to large goods.  I would love to see very basic cars manufactured which are designed explicitly with user modification in mind.  Make everything in a fashion that people can pull it out and install something new.  Sell the chasis, but in effect, let people create modules for it just like applications created for the iPhone.

But all of this requires not just technological change, but a world in which you can find your customers.  If there are only a 1,000 people in the entire world who want your design, your application, your mod, well, in old style industrial production, that’s worthless.  But in a Mod society backed up with the internet, that might well be enough.

The rule of Bush applies to Obama and Congressional Democrats

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On November 25, 2009

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Dean, the man who should have been president:

“The biggest time bomb in the short run is the Public Option. Without a Public option, basically the activists of the Democratic party sit on their hands in 2010. Obama is not on the ballot. There’s no reason to go out and vote for a Democratic Congressman or give them any money if they can’t pass a healthcare bill that’s worth anything. And that’s a huge problem for the Democrats if its not in there and so it looks like some of the, a few of the folks aren’t going to let it in there. [snip] [The Public Option] has been watered down, it’s about as as watered down as it can get and still be a real bill. So there’s not a lot left in this bill. For example, there’s really no insurance reform in this bill. … I think Sanders has got the right idea. You might as well kill this thing because the people are going to be furious if it passes if it doesn’t have a Public Option.”

Dean has carried a lot of water for Obama on health care, despite Obama’s blatant disrespect of Dean when he stepped down from DNC.  For him to being saying this is… interesting…  He’s also made the point that if Democratic Senators won’t vote with their party on procedural votes, it’s the death of fundraising for the DSCC—for years they’ve talked about getting to 60, now they have, and they still can’t pass anything that isn’t crap.  What next, 65?

2010 is shaping up very nicely for the Republicans.  Their base is motivated, the Democratic base is less and less motivated, and by 2010 will be demoralized.  The economy will not have recovered by the time of the election, Republicans have effectively demonized stimuluses and deficits, so no new meaningful stimulus is likely to pass, so there’s nothing Democrats can do to fix the job situation.  Of course, 700 billion of stimulus, done right, would have created a lot more jobs than the lousy stimulus bill Obama put through.

Not doing things right when you can, has consequences.

Imagine that.

As you sow, so shall you reap.  Pity Obama and Democrats incompetence, venality and cupidity will cause so much real world suffering.  But in 2011 at least they’ll have a good excuse for doing nothing or passing only conservative bills.  Which is good, because whenever they do something they screw it up anyway.  As with Bush, if you believe in a policy (say stimulus) the last thing you want is for Obama and this Democratic Congress to do it, because they’ll screw it up beyond measure and thus discredit it.

About Freaking Time

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On November 24, 2009

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The growing backlash against over-parenting:

That advice may seem perfectly sensible to parents bombarded by heartbreaking news stories about missing little girls and the predator next door. But too many parents, says Skenazy, have the math all wrong. Refusing to vaccinate your children, as millions now threaten to do in the case of the swine flu, is statistically reckless; on the other hand, there are no reports of a child ever being poisoned by a stranger handing out tainted Halloween candy, and the odds of being kidnapped and killed by a stranger are about 1 in 1.5 million. When parents confront you with “How can you let him go to the store alone?,” she suggests countering with “How can you let him visit your relatives?” (Some 80% of kids who are molested are victims of friends or relatives.) Or ride in the car with you? (More than 430,000 kids were injured in motor vehicles last year.) “I’m not saying that there is no danger in the world or that we shouldn’t be prepared,” she says. “But there is good and bad luck and fate and things beyond our ability to change. The way kids learn to be resourceful is by having to use their resources.

No shit.  This is a general disease in society, mind you.  Both namy-pambyism and an inability understand actual risk.  No, odds of you or anyone you know being killed by a terrorist are so close to zero as to essentially indistinguishable.  On the other hand, getting in a car is dangerous, and so is crossing the street.  Oh, and flying?  Far safer than driving.  (Although less convenient, thanks to paranoia driven security theater.)

I was a free range kid.  I walked or took the bus to school.  When I took gymnastics classes as a kid, I took a half hour bus ride—I didn’t get driven.  I had to be home for supper and for bedtime, and I had to let my parents know more or less what I was doing, but other than that, I was free to do what I wanted with my time.  If I wanted to join the soccer team, or take classes, my parents would support me in that, but they didn’t rush around signing me up for everything.  And when the bus didn’t go where I needed to get for soccer games, my father would drive me.  But only if I couldn’t get myself there myself.

In my teens I wandered through the Bangladeshi city of Dhaka by myself, as well as Kathmandu, Calcutta and Bangkok.  It never seemed to occur to my parents that I was some hothouse flower who couldn’t handle himself, and indeed, I did handle myself and I learned valuable lessons in doing so.

When I went to University in the early nineties, I already found that the suburban raised children who were my peers had had fear bred in.  Oh, they were great at high school style social politics, in-groups and out-groups, but put them on the street in downtown Toronto at 1 am, and they quaked in fear.  (For the record, I can think of few places safer than downtown Toronto at 1am, including many cities I’ve spent time in at 1pm.)

You can’t live in fear all the time. If you do, you don’t live.  And if you make your kids live in fear, then you take away their ability to live and turn them into hothouse flowers, scared of their own shadows.

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