Is the Cup Half Empty Or Half Full (cont.)?

Click to enlarge image via Calculated Risk
TW: Are we about to repeat '82, '74 or '30? Viewing the big three prior bear markets, one can see we are either due for a nice fat rally or a searing downward leg. What will it be? Be sure to let me know if u have the answer.

Spiraling Away From a Two State Solution

TW: Friedman nicely frames the emerging train wreck in Israel/Palestine. Palestinians are developing the capability through longer and longer range rockets to truly harm Israel. If the Palestinians continue to grow this capability then Israel will inevitably and understandably respond with strong force. Meanwhile Jewish settlements inside the West Bank continue to grow and develop tentacles which will become increasingly difficult to reverse. Palestinians lobbing deadly and highly disruptive rockets into Israel and Israelis growing their footprint inside Palestine are two cars headed towards a very bad collision

From Friedman at NYT:
"...We’re getting perilously close to closing the window on a two-state solution, because the two chief window-closers — Hamas in Gaza and the fanatical Jewish settlers in the West Bank — have been in the driver’s seats. Hamas is busy making a two-state solution inconceivable, while the settlers have steadily worked to make it impossible.

If Hamas continues to obtain and use longer- and longer-range rockets, there is no way any Israeli government can or will tolerate independent Palestinian control of the West Bank, because a rocket from there can easily close the Tel Aviv airport and shut down Israel’s economy.

And if the Jewish settlers continue with their “natural growth” to devour the West Bank, it will also be effectively off the table. No Israeli government has mustered the will to take down even the “illegal,” unauthorized settlements, despite promises to the U.S. to do so, so it’s getting hard to see how the “legal” settlements will ever be removed. What is needed from Israel’s Feb. 10 elections is a centrist, national unity government that can resist the blackmail of the settlers, and the rightist parties that protect them, to still implement a two-state solution.

...What makes it so challenging for the new Obama team is that Mideast diplomacy has been transformed as a result of the regional disintegration since Oslo — in three key ways.
First, in the old days, Henry Kissinger could fly to three capitals, meet three kings, presidents or prime ministers and strike a deal that could hold. No more. Today a peacemaker has to be both a nation-builder and a negotiator.

The Palestinians are so fragmented politically and geographically that half of U.S. diplomacy is going to be about how to make peace between Palestinians, and build their institutions, so there is a coherent, legitimate decision-making body there — before we can make peace between Israelis and Palestinians.

Second, Hamas now has a veto over any Palestinian peace deal. It’s true that Hamas just provoked a reckless war that has devastated the people of Gaza. But Hamas is not going away. It is well armed and, despite its suicidal behavior of late, deeply rooted.

The Palestinian Authority led by Mahmoud Abbas in the West Bank will not make any compromise deal with Israel as long as it fears that Hamas, from outside the tent, would denounce it as traitorous. Therefore, Job 2 for the U.S., Israel and the Arab states is to find a way to bring Hamas into a Palestinian national unity government.

As the Middle East expert Stephen P. Cohen says, “It is not enough for Israel that the world recognize that Hamas criminally mismanaged its responsibility to its people. Israel’s longer-term interest is to be sure that it has a Palestinian partner for negotiations, which will have sufficient legitimacy among its own people to be able to sign agreements and fulfill them. Without Hamas as part of a Palestinian decision, any Israeli-Palestinian peace will be meaningless.”

But bringing Hamas into a Palestinian unity government, without undermining the West Bank moderates now leading the Palestinian Authority, will be tricky. We’ll need Saudi Arabia and Egypt to buy, cajole and pressure Hamas into keeping the cease-fire, supporting peace talks and to give up rockets — while Iran and Syria will be tugging Hamas the other way.

And that leads to the third new factor — Iran as a key player in Palestinian-Israeli diplomacy. The Clinton team tried to woo Syria while isolating Iran. President Bush tried to isolate both Iran and Syria. The Obama team, as Martin Indyk argues in “Innocent Abroad: An Intimate Account of American Peace Diplomacy in the Middle East,” “needs to try both to bring in Syria, which would weaken Hamas and Hezbollah, while also engaging Iran.”

So, just to recap: It’s five to midnight and before the clock strikes 12 all we need to do is rebuild Fatah, merge it with Hamas, elect an Israeli government that can freeze settlements, court Syria and engage Iran — while preventing it from going nuclear — just so we can get the parties to start talking. Whoever lines up all the pieces of this diplomatic Rubik’s Cube deserves two Nobel Prizes. "
http://tinyurl.com/am4s5j

The Media Is Biased...In Search Of Conflict

TW: Folks, usually on the right, get uptight about media bias. I have said this before and will repeat, the media is highly biased but not for one party or the other, merely for conflict. Conflict is loud, emotional and made for TV. The Republicans are clearly enjoying their "opposition" role but so did the Democrats for the past eight years. It is amusing to see the channel with the most Republicans being the NBC channels, the alleged left-wingers. CNBC has never been in the least left, I can gag watching their continuous odes to business (and of course Larry "Goldilocks" Kudlow has a show there).

So the Dems just need to get used to the above and govern through it.

Things I Like - Chicago

Chicago is well known for its architecture, and rightly so. We’ve also got some world class public sculpture adorning our parks and streets - the Picasso in Daley Plaza, the Calder Flamingo, the Miro figure-thingey, the Cloud Gate in Millennium Park and of course, Michael Jordan in front of the United Center…

Check out these other outdoor sculptures, perhaps not so well known:

South end of Grant Park ~ Lovely Nymphs
Olive Park near Navy Pier ~ The Doctor is in
Cityfront Center ~ American Gothic
West Loop ~ The Bat Column
Tribune Tower Plaza ~ King Lear
Two from Oz Park ~ The Cowardly Lion
The Tin Man
Grant Park ~ Agora
One Financial Place ~ Carved Horse
Lincoln Park Zoo ~ Elephants at the watering hole
These last three were posted on Flickr by Atelier Tee - I highly recommend visiting his photostream, he has some absolutely beautiful photos of the city.

Hannity v. Stewart: A True Mismatch

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The Birds Coming Home To Roost

TW: Have commented on the hypocrisy of Republicans who ignored our fiscal deficits really all the way back to Ronald Reagan, who are now making much noise about the deficit spending embedded in the Obama plan. Imagine if the Republicans had not jammed through the tax cuts for the wealthy in '01 and '03, imagine if we had not spent a trillion $ in Iraq. Water under the bridge but why would we rely upon the Republicans now to most effectively address our economic woes?

I am a deficit hawk (unlike most Republicans) but there is a time and place for everything.

From economist Mark Thoma:
"During the Bush administration, the federal debt " nearly doubled," going from $5.7 trillion to $10.6 trillion. This was no accident, but rather part of the Republican's "starve the beast" strategy for shrinking government. While this was going on, many of us warned that if big trouble hit, and if we had high deficits at the time, it would limit our ability to respond in the most effective manner. E.g., from January 2006:

We are in a better position with respect to monetary policy now, but for awhile we had very low interest rates coupled with very high budget deficits. In such a case, when you've already thrown your two best punches, what do you do if trouble hits? It's important to reload the policy guns - get deficits and interest rates in order - so when trouble hits you won't have already fired your best shots. I also wonder if we are saving enough for the next rainy day.

We weren't, and as I said, that was intentional. You see, the advocates of starve the beast policies believed that capitalism had entered a new era since Reagan. We had thrown off the limitations imposed by intrusive government making us, unlike Europeans who had not followed suit to anywhere near the same degree, highly resistant to shocks. Much was written about how effectively the relatively government free U.S. economy could absorb shocks relative to Europe (Phelps comes to mind). We could take a licking and keep on ticking. So they saw no real danger in pushing a large deficit, starve the beast type policy. Many denied that government could help, government is always the problem, never the solution, but in any case big shocks - the kind that produce depressions - couldn't happen in a free, capitalist system, and they would point to the Great Moderation and events such as Katrina where the economy hardly lost a breath as evidence for that position.

But they were wrong about that, and what many of us were so worried about has now come to pass. Because of the high levels of government debt, our hands are not as free as they should be to deal with the crisis. Republicans - the very party that created the such a large problem by denying that it could ever occur - are now the ones wringing their hands about increasing the deficit any further. But instead of complaining, they should be apologizing profusely for leaving us in such a bad position. Their belief that capitalist economies, if only freed of government, can absorb any shock almost without blinking, and their conscious decision to try to starve government, particularly social insurance programs so necessary in a downturn like this one, has left us in a bad position. We may not be able to do as much as we need to do because of the objections to increasing the debt as much as will be needed. And if we cannot do what we need to do, it won't be the beast that is starved, it will be families who no longer have jobs, healthcare, etc., and have no place to turn to get the help that they need, at least not in sufficient quantity. "Starving the unemployed" may not have been the goal, but if Republicans get their way and limit the recovery package based upon deficit fears, it could very well be the result."
http://economistsview.typepad.com/economistsview/2009/01/starving-the-un.html

Talk Is Weakness Or Is Talk Strength

TW: I completely concur with and like Economist's analogy on the conservative reaction to Obama's talk relative to the Muslim world. Why folks believe the slightest bit of humility is weakness rather than strength always perplexes me. Do Krauthammer et al. ever have alternatives to "fear and strength"?

From Economist:
"AS NIGHT follows day, conservative columnists have found Barack Obama's interview with Al-Arabiya "needlessly defensive and apologetic", in Charles Krauthammer's words. Never mind that Mr Obama did not apologise; he did say that mistakes had been made. Mr Krauthammer thinks that the wars on behalf of Muslim peoples in Bosnia, Kosovo, Somalia, Kuwait, Afghanistan and Iraq stand as all you need to know about America's real stance towards the Muslim world. He also notes Mr Bush's visit to Islamic centres and his declarations such as "Islam is peace".

Mr Krauthammer is right, if you only look at half the balance sheet. And if I only looked at the deposits, not the withdrawals, in my bank account, I would be a rich man. Inexplicable that my bank does not see it that way."

Is the Cup Half Empty Or Half Full?

Click on image to enlarge (chart from Calculated Risk)

TW: This chart normalizes the employment data to reflect our growing population. When the headlines speak of "record" unemployment or jobless claims etc. they are misleading in that our population continues to grow relatively rapidly therefore absolute number comparisons become outdated. The other problem btw is that many economic stats only go back twenty, thirty or forty years so "all-time" records are really just "all-time since they started tracking the stat".

Regardless, the charts can either be cause for hope or concern. On the hopeful side the current numbers are much more akin to the relatively mild '00-'01 and '90-'91 as opposed to the much rougher '81-'83, '73-'74 recessions much less what the Great Depression numbers would have looked like.

On the concerning side, if the current numbers should continue their path upward towards the earlier recessions or worse then the pain felt to date is merely the prelude to much greater angst...

Things I Like - Sciences

File this one under a little scary. In case it isn't completely obvious, it's a tiny doll (5 milimeters high) made of living cells.

Why, you might ask, would someone want to create something like this? According to the researchers at the University of Tokyo’s Institute of Industrial Science, it was done to

...demonstrate a new method for fabricating three-dimensional living biological structures....the technique can be used to create bodily organs and tissues with complex cellular structures, which may prove useful in the fields of regenerative medicine and drug development.

OK. So a little scary but also pretty cool.

http://www.pinktentacle.com/

We Were Spending Like Drunken Fools

Click image to enlarge
TW: This chart shows the amount of net equity Americans were removing from their homes by quarter through last year. Net equity being home equity loans less principal payments. So if one was paying down a mortgage that value would have been subtracted from those borrowing against the value of their home. As one can see starting in early 2001 and continuing through all of 2007 Americans were pulling anywhere from $60 to $140 billion dollars quarterly out of their homes (again net of any principal payments!). In 2006 alone Americans pulled almost $500 billion of equity out of their homes.

Just one example of how empty our economic expansion such as it was during the 2001-2007 was. Our economy during this decade was built on a house of cards. Obviously this little game is over, the chart turned slightly negative in Q3 2008, updates will show homeowners finally paying down their principal.

He'll Have a Beer

TW: Another reason I like the guy

"Our Own Test Is Also About To Begin"

TW: Frank Rich gives the curmudgeonly take on the Obama inauguration speech. I like its focus on the American people rather than Bush or Obama.

From Frank Rich at NYT"
...Obama wasn’t just rebuking the outgoing administration. He was delicately but unmistakably calling out the rest of us who went along for the ride as America swerved into the dangerous place we find ourselves now.

Feckless as it was for Bush to ask Americans to go shopping after 9/11, we all too enthusiastically followed his lead, whether we were wealthy, working-class or in between. We spent a decade feasting on easy money, don’t-pay-as-you-go consumerism and a metastasizing celebrity culture. We did so while a supposedly cost-free, off-the-books war, usually out of sight and out of mind, helped break the bank along with our nation’s spirit and reputation.

We can’t keep blaming 43 for everything, especially now that we don’t have him to kick around anymore. On Tuesday the new president pointedly widened his indictment beyond the sins of his predecessor. He spoke of those at the economic pinnacle who embraced greed and irresponsibility as well as the rest of us who collaborated in our “collective failure to make hard choices.”

...These themes are not new for Obama. They were there back on Feb. 10, 2007, when, on another frigid day, he announced his presidential candidacy in Springfield, Ill. Citing “our mounting debts” and “hard choices,” he talked of how “each of us, in our own lives, will have to accept responsibility” and “some measure of sacrifice.” His campaign, he said then, “has to be about reclaiming the meaning of citizenship.”

...This debt-ridden national binge of greed and irresponsibility washed over our culture not just through the Marie Antoinette antics of a Schwarzman and a Thain but in mass forms of conspicuous consumption and entertainment

...While it’s become a Beltway cliché that America’s new young president has yet to be tested, it is past time for us to realize that our own test is also about to begin."
http://www.nytimes.com/2009/01/25/opinion/25rich.html?_r=2&ref=opinion

Confusion And Ignorance

From ABC news reporting on Obama's meeting with Republican House members Tuesday:
Said Rep. Roscoe Bartlett, R-Md (82 yr old).:
"Mr. President, I probably come at this from a slightly different perspective. I remember when FDR beat Hoover in 1932 [TW- as a 6 yr old apparently]. So I remember the Great Depression very well. I don't remember any of the many government programs affecting the course of the Depression. Government programs didn't work then, I don't know why we think they would work now. Mr. President, I think our obsessive borrowing has fully mortgaged my kids and my grandkids. Now we're working on mortgaging my two great-grandkids. Mr. President, I think it's more than a little bit selfish to try to solve our economic problems which we created by burdening future generations yet to be born."

This prompted applause."

TW: Ms. Bartlett is ignorant relative to the economics of the Depression and confused and likely highly hypocritical relative to fiscal policy. Up until about six months ago, the New Deal was regarded as a key component of the recovery from the Great Depression, now it has suddenly become an enabler of the GD at least according to say Rush Limbaugh and his acolytes within the Republican Party.

One could re-open that can of worms and debate it, perhaps I will at some point but I will just say this. If the New Deal was irrelevant and the only thing that got the US out of the GD was World War II (as the New Deal critics claim), then:
A) was not WWII the epitome of a massive spending stimulus, it sure the heck was not a massive supply-sider tax cut for the wealthy or poor (the favored alternative of the Republicans now).
B) if WWII was the real cause of the recovery does that not create some concerning implications? Perhaps we should seek an alternative.

Two, as for fiscal responsibility, I am strongly for balanced budgets. Which is why for all of Bill Clinton's failures as a human being and otherwise, his economic package passed in 1993 was an achievement. That package led to the budget surpluses later in the decade.

ZERO Republicans voted for the Clinton package as it included tax increases. W. Bush AND the Republican Party did not give one whit about fiscal responsibility from 2001 until about 30 days ago. All they cared about were supply side tax cuts (largely oriented towards wealthier folks) to "unleash the animal spirits of capitalists".

The time to balance budgets and build surpluses is when the economy is GROWING, not when it is shrinking rapidly, this is basic economic theory to which even a Larry Kudlow would agree.

I hope sincerely that Obama will at the right time, use this crisis as a means to address the severe long-term fiscal challenges of our nation. For those worried about the viability of our currency and ultimately our nation's fiscal security, if Obama and others develop a long-term plan to reduce entitlement spending then we should be positioned for success.

But anyone advocating shrinking federal spending amidst this current crisis is literally suggesting the same policies supported by Herbert Hoover in 1929 and 1930.

To Investigate the Bush Administration Or Not?

TW: There has been considerable discussion on the left regarding investigation of Bush Era potential "war crimes" in particular related to torture. While strong arguments in favor of such investigation have been made(http://www.iht.com/articles/2009/01/13/opinion/edlithwick.php). I find the idea ultimately unattractive. Fried in this piece makes a strong case that the high-level perpetrators of the policy have already experienced sanctioning in the form of being voted out of power.

Do folks in the highest level of power get a double standard and/or is a moral hazard potentially created in avoiding actual prosecution for a potential crime, perhaps, but these are not standard crimes. We must move on and we are in a very aggressive manner given the moves initiated by Obama in his first week or so.

Finally Fried makes the point that the torture policy was implicitly supported by perhaps a majority of Americans at the time of the initial policy change. This fact should not be forgotten despite its fallacy of judgment.

From Intl Herald Tribune:
"...Some argue that torture is justified if our survival is threatened, but even apart from the elasticity of this justification, it is flawed because it depends on an equivocation.
Our physical survival is not what is of overriding moral importance (people give up their lives all the time for some higher value) but our survival as decent human beings acting for a decent society. And we cannot authorize indecency without jeopardizing our survival as a decent society.

...It is a hallmark of a sane and moderate society that when it changes leaders and regimes, those left behind should be abandoned to the judgment of history. It is in savage societies that the defeat of a ruling faction entails its humiliation, exile and murder.

...consider what criminal prosecutions would really look like. First, we would have the investigations, the subpoenas, the depositions and grand juries, much of this directed at tripping up the targets, so that they can more handily be prosecuted for the ancillary offenses of making false statements, perjury or obstruction of justice.
Then, we would have the trials themselves - protracted, interspersed with motions and delays, obsessively followed by cable channels filling in the many dull spots with endless commentary from teams of so-called experts, the whole spectacle stupefying rather than edifying the public and doing little to enhance respect for the law. A feast for lawyers and legal junkies, criminal prosecutions would be an embarrassment and distraction for the rest of the society that wants to get on with solving the great problems of the present and the future.

...If you cannot see the difference between Hitler and Dick Cheney, between Stalin and Donald Rumsfeld, between Mao and Alberto Gonzales, there may be no point in our talking. It is not just a difference of scale, but our leaders were defending their country and people - albeit with an insufficient sense of moral restraint - against a terrifying threat by ruthless attackers with no sense of moral restraint at all.Our veneration of the rule of law makes us believe that courts and procedures and judges can put right every wrong. But we must remember: Our leaders, ultimately, were chosen by us; their actions were often ratified by our representatives; we chose them again in 2004. Their repudiation this Nov. 4 and the public, historical memory of them is the aptest response to what they did."
http://www.iht.com/articles/2009/01/13/opinion/edfried.php

Things I Like - Books

What do you do with all the books you’ve read but don’t want to keep? I’m talking about the books that have collected on bookshelves or in closets or storage rooms that you will really never read again. No matter how much I don’t like a book, I have a hard time actually throwing it in the trash. So what to do?

Over the years I’ve donated books and I’ve sold them to second-hand shops, but still they accumulate. Leave it to the internet to provide yet another alternative – book swaps. There are a number of sites that offer a free service to members – a virtual swap meet.

The process seems to be pretty straight forward. After creating an inventory (list of books you want to get rid of) and a wish list (books you want to get), the trading begins. Some sites match your gives / gets for you, others leave that to you. They all have their own little quirks but most seem to work on a point basis. You get a certain number of points for each book you send out and can then use those points to ‘purchase’ books listed by others on the site.

I haven’t tried this yet but I’m definitely giving it some thought. If I can convince myself that there are more books I need….

Book Mooch – this site seems to be the most basic; books only and all in the hands of the users. A big plus is access to books from outside the US (I’ve mentioned before that I used to see books all the time in London that never made it over here). Post office rates range from about $2.20 for 7 ounces (average paperback) to $3.60 for a 5 pound package (2 -3 hardcovers) for US shipments. http://www.bookmooch.com/

Bookins - swap options include books and DVDs. This site uses a set shipping price of $4.49 per shipment. Great for 2 or more books but wouldn’t make sense to me if someone only wanted one item. http://www.bookins.com/index.php

Paperback Swap – although the name indicates paperbacks, this site also covers hardcover books. It also includes an option for printing postage wrappers – you enter the book info and a 2 page ‘wrapper’ prints with the estimated postage embedded in a barcode (service costs $.43 per shipment). http://www.paperbackswap.com/index.php

P.S. - Happy Birthday Dad!

Ending Torture As a National Policy

TW: A significant portion of the American public supports or has supported torture as a national policy. W. Bush embraced the concept, Obama has reversed the policy. As I have said before while I certainly agree with the change and I believe a majority of Americans do as well, we shall see if that attitude persists should a terror event ever occur. Nevertheless, it is interesting to read of significant military support for the policy reversal.

From New Yorker:
"...The group of military men, which included the retired four-star generals Dave Maddox and Joseph Hoar, lectured Obama about the importance of being Commander-in-Chief. In particular, they warned him that every word he uttered would be taken as an order by the highest-ranking officers as well as the lowliest private. Any wiggle room for abusive interrogations, they emphasized, would be construed as permission.

... a retired four-star Marine general and conservative Republican named Charles (Chuck) Krulak. Krulak insisted that ending the Bush Administration’s coercive interrogation and detention regime was “right for America and right for the world,” a participant recalled, and promised that if the Obama Administration did what he described as “the right thing,” which he acknowledged wouldn’t be politically easy, he would personally “fly cover” for them.

Last week, as Obama signed the executive order, sixteen retired generals and flag officers from the same group did just that. Told on Monday that they were needed at the White House, they flew to the capital from as far away as California, a phalanx of square-jawed certified patriots providing cover for Obama’s announcement.

...retired Major General Paul Eaton, stressed that, as he put it later that day, “torture is the tool of the lazy, the stupid, and the pseudo-tough. It’s also perhaps the greatest recruiting tool that the terrorists have.” The feeling in the room, as retired Rear Admiral John Hutson later put it, “was joy, perhaps, that the country was getting back on track.”

Across the Potomac River, at the C.I.A.’s headquarters, in Langley, Virginia, however, there was considerably less jubilation. Top C.I.A. officials have argued for years that so-called “enhanced” interrogation techniques have yielded lifesaving intelligence breakthroughs. “They disagree in some respect,” Craig admitted. Among the hard questions that Obama left open, in fact, is whether the C.I.A. will have to follow the same interrogation rules as the military. While the President has clearly put an end to cruel tactics, Craig said that Obama “is somewhat sympathetic to the spies’ argument that their mission and circumstances are different.”

Despite such sentiments, Obama’s executive orders will undoubtedly rein in the C.I.A. Waterboarding, for instance, has gone the way of the rack, now that the C.I.A. is strictly bound by customary interpretations of the Geneva Conventions. This decision, too, was the result of intense deliberation. During the transition period, unknown to the public, Obama’s legal, intelligence, and national-security advisers visited Langley for two long sessions with current and former intelligence-community members. They debated whether a ban on brutal interrogation practices would hurt their ability to gather intelligence, and the advisers asked the intelligence veterans to prepare a cost-benefit analysis. The conclusions may surprise defenders of harsh interrogation tactics. “There was unanimity among Obama’s expert advisers,” Craig said, “that to change the practices would not in any material way affect the collection of intelligence.”
http://www.newyorker.com/online/blogs/tny/2009/01/behind-the-executive-orders.html

Just Make Things Work!

TW: This poll from Diageo/Hotline sums up how most Americans think, it is'nt about Dems and Repubs. Obama appears to get this.

From Hotline:
"Feelings About Democratic Control of White House and Congress?
It does not matter to me who is in power, as long as they can get things done for the country 51%
I am excited that, for the first time in a long time, the Democrats are in charge of both the Presidency and the Congress 28%
I am concerned that the Democrats will control both the Presidency and the Congress 20%"

Should Universities Own Millions Of $ Of Art?

TW: The Economist laments Brandeis University decision to divest its art collection. The divestiture is the result of the tough economy which has hurt their endowment and on-going fundraising. The sale will cause the school's poorly attended art museum (roughly 50 visitors per day) to close. The value of the art is estimated at $350 million (inc. some stuff by big hitters such as Picasso etc.). As Economist notes that valuation may fade in the light of the current down market for high-end art.

My question though is why should universities own art portfolios valued in nine figures. The $350 MM could throw off conservatively about $15MM per year in cash flow to fund standard university activities such as say educating folks (and hopefully not with another pretty dorm but staff salaries or scholarships). There are numerous vehicles by which students of Brandeis (located in Boston) can gain access to top quality art. Why does the university need to carry such a large collection? Don't get me wrong, art museums are highly relevant but why to be owned by the university. If I were a contributor there I would wonder.

Frequently I believe our private top-end universities are accumulating trophy assets in the form of massive endowments and things such as very expensive art museums, which do little to provide education at a reasonable cost and return. We have hundreds of state and other higher education institutions starving for cash, they are the ones in need of support.
http://www.economist.com/blogs/freeexchange/2009/01/an_artless_liquidation.cfm

We Have Made Promises We Cannot Keep

TW: Have spoken of this before but our public employee retirement liabilities both health care and pensions are nearly out of control. Over the past twenty years of relatively good economic growth, instead of storing more nuts we have been promising more nuts than the relatively good economic times created. The piper will eventually have to be paid (i.e. reduced benefits) but public employees will not like it one bit.

The current Illinois situation is merely a prelude.

From Economist:
"[IL's] five pension funds are looking pasty. Illinois has $54.4 billion of unfunded pension liabilities, with just 54% of the assets it needs to pay for future promises to its workers; 80% is the proportion experts usually consider adequate. These figures, the most recent available, are from June 2008. Since then, they have probably got worse.[TW: not probably and not a little, alot worse].

Other states face similar woes. A sample of 109 state pension funds lost $865 billion, about 30% of their value, between October 2007 and December 2008

State and local governments’ retirement plans differ greatly from those in the private sector. In 2006, according to the CRR, over 60% of private workers with a retirement plan relied on a defined-contribution scheme such as a 401(k) account. Workers bear the risks of the market; many cheer when their accounts rise, but watch in anguish as they plummet. State and local workers, however, should be more calm. In 2006 80% of them relied on defined-benefit plans, which pay a pension based on wages and years on the job. The employer, not the worker, weathers market turmoil. What is more, public pensions are often protected by a state’s constitution, as in Illinois.

Before the financial collapse most states were moving towards full funding. In the CRR’s sample of pension plans, about 60% had funding ratios of at least 80% in 2006. The problem then seemed to be health-care liabilities, which states usually pay for out of general revenues rather than invested trust funds. The financial mayhem, however, has put pensions back in the spotlight.

Private defined-benefit plans are under most pressure. Firms, thanks to a law passed in 2006, face strict rules for shoring up their obligations. States have more leeway, but many will have to pump more money into their pension funds to offset losses on the market. Some states have been more battered than others. The value of America’s biggest pension fund, the California Public Employees’ Retirement System, shrank from $253 billion at the end of 2007 to $181 billion in November 2008. Trouble descended on cities as well. Philadelphia’s pension fund lost 23% of its value in 2008, according to the city’s controller.

Illinois’s pension funds were skimpy even before the crisis. “The big-picture problem for Illinois has nothing to do with markets,” explains William Atwood, director of the state board of investments. “It has to do with policymakers’ decisions to allocate money to places other than pensions.” After years of starving its retirement systems, in 1995 the state adopted a plan to ensure that its ratio of assets to liabilities reached 90% by 2045. But this was scuppered by generous new benefits for workers and lax payments to the funds themselves. Meagre returns have not helped. In June 2008 the state’s five pension funds had $64.7 billion in assets. At the end of October they had $50.5 billion.

...Illinois could follow a few other states and pass reforms for new workers. Kentucky’s changes include setting a minimum retirement age. New employees in Kansas must give a bigger share of their wages to the retirement fund. But current workers’ pensions are protected by law. Past promises remain a heavy burden.

...“Taxpayers”, explains the CRR’s Alicia Munnell, “will have to ante up.” The main question is when, and how much."
http://tinyurl.com/c87j55

Israel Faces a Fork In the Road

Watch CBS Videos Online
TW: This 60 Minutes focuses on the West Bank settlements. These settlers are generally a very religious and strident demographic with little intention of ever leaving. If the settlers leave achieving a sustainable peace framework will be highly challenging. But unless they leave, forget about peace ever coming to Israel and Palestine.

The settlements are a cancer to the peace process which undercut the moral stature of the Israeli state. While the settlements are not the only core topic necessary for a peace settlement (right of return and Jerusalem being amongst the others), it is the least defensible attribute,, in fact largely indefensible.

The day I hear the Israelis at a minimum stopping the growth of the settlements will be the day I assume the Israelis are serious about peace until then they are hypocrites putting a huge part of our entire foreign policy at risk. When that day comes the Arabs will have had the rug pulled out from under their "woe is me" posture.

Things I Like - Food

I know I've mentioned that I like to cook. I'm not a great cook, but my meals are generally edible and often tasty. Friends (who are probably just being kind) have told me that they would come to dinner at my house any time. While this is likely due more to the opportunity to eat a dinner prepared by someone other than themselves than to the desire to have a meal prepared by me specifically, I will admit to being a confident cook.

This was not always the case. Early years (my 20's) were ruled by the recipe. I wouldn't make a PB&J sammie without one. It wasn't until I was married that I started to cook more from feel than recipe - the need to prepare dinner on a regular basis combined with limited time made recipe-driven cooking difficult. Initial attempts did not always go well but Mr. White was great about eating whatever I put in front of him (he's not stupid). "It's not my favorite" was the indicator that a 'wing-it' dish hadn't been successful.

I've had quite a bit of practice now and the 'not my favorite' comments have been significantly reduced due to a few key points :

1. Use more salt. I guarantee you that most of the difference in taste between what you cook at home and what you get in a restaurant is proper seasoning. Bonus hint: use sea salt.
2. Cook with fresh herbs. The fresh flavors and fragrance take things to a new level. And it's easy - you can buy them at any supermarket or grow your own. btw, dried herbs don't last forever. Anything in your cabinet more than 1 year old is likely useless as far as flavor goes.
3. Browning meat is key to creating flavor, something to do with Maillard reactions. And the keys to proper browning are high heat and undisturbed meat. Your pan needs to be hot and after dropping the meat, you need to leave it alone. Cook based on time - i.e., 3 to 5 minutes per side depending on the size of the piece(s) being browned.
4. Meat needs to rest. Whether it's been grilled or roasted, meat needs to rest for at least 5 minutes and as much as 30 (depending on the type of meat and size of the cut) before carving. Resting allows the juices to redistribute throughout the meat rather than running out when carved. Meat juices all over the cutting board means dry meat on your plate.

There you go - four easy ways to improve your cooking whether you're following a recipe or winging it.

If This Is the Best They Have...

TW: So Romney, Huckabee and Palin have started 2012 PACs. No one knows what the environment in 2012 will be. One of the challenges for the opposing party is motivating their truly big hitters to take on an incumbent. Given the ridiculously long process these days, the political environment can change far after the primary candidates stake their turf. How did we end up with John Kerry and Howard Dean as the Dems in '04? Things did not look so promising for a Dem in late 2002 and early 2003 (same concept opened the door for an unknown Bill Clinton in 1991 post Gulf War when G.H. Bush seemed unassailable). Would a Gore or Hillary Clinton have won in 2004, who knows?

The Republicans barring catastrophe will likely feel the same way come late 2010 and early 2011. Therefore, re-treads like Romney/Palin may be the likely candidates, a circular problem for the opposition. Nevertheless it has been awhile since we bashed Ms. Palin but fret not.

From Economist:
"And what of Ms Palin's chances? I have seen her interact with voters. She has huge appeal among a segment of the Republican base. After a rally of hers, one man told me that she was like Ruth—as in, from the Old Testament—that she was the last hope to save America. More often, I heard about how she was "just like me" from seemingly dozens of conservative women. She will definitely rile some folks in western Iowa. But, unless she surrounds herself with better advisers who can force her to learn more about national issues—and unless she learns to speak about them with fluency rather than dismissive ignorance—she will be little more than a high-profile, polarising also-ran. So far, she has done neither"
http://www.economist.com/blogs/democracyinamerica/2009/01/palin_begins.cfm

Wine

TW: I am with Mr. Salmon.

From Felix Salmon at Portfolio:
"Robert Hodgson has a paper out entitled "An Examination of Judge Reliability at a major U.S. Wine Competition". He had the ingenious idea of serving up three identical glasses of wine -- poured from the same bottle -- to groups of judges; only 10% of the judging panels managed to rank the three identical wines even in the same medal group, even though the wines were served in the same flight. And, as Peter Mitham reports:

One panel of judges rejected two samples of identical wine, only to award the same wine a double gold in a third tasting.

I'm beginning to think there's really no such thing as a really good wine: there's just really bad wine, and everything else."

Or Perhaps the POTUS Is a Sly Fox

TW: Am thinking I was wrong perhaps about BHO and Puffy Limbaugh. I like Cilizza's take on the Puffy noise from BHO. Might Obama merely be setting Puffy up as the face of the
Republican party, surely not the face one would really want for your party...

From Chris Cillizza at WaPo:
"...Obama upped the ante late last week when in a private meeting with Republicans he referenced Limbaugh's brand of politics as a big reason why major legislation hadn't been passed in years.

...Not surprisingly, Limbaugh took the bait. Of Obama, he said: "He's obviously more frightened of me than he is Mitch McConnell. He's more frightened of me, then he is of say, John Boehner, which doesn't say much about our party."

..."The party is in transition," said Ed Rogers, a Republican lobbyist and close ally of Mississippi Gov. Haley Barbour. "Our leaders have not found their voice or direction....Limbaugh is filling a vacuum in a world that requires a constant media counter-point."

While there is nearly unanimous agreement with Rogers's sentiment that Limbaugh is filling a void left by the departure of former President George W. Bush from the scene, whether that is a good or a bad thing remains a point of considerable contention among party strategists.

"Rush is a double-edged sword, he cuts both ways" said Phil Musser, a Republican consultant and former executive director of the Republican Governors Association. "Sometimes you love him, sometimes you cringe at his impolitic (he'd say honest) fusillados."

John Weaver, a former senior aide to Sen. John McCain (R-Ariz.), said that Republicans must be careful not to allow their Democratic rivals to paint them all with the brush of Limbaugh.
"The Democrats and the far left will do all they can to grab electoral turf," said Weaver. "And one sure way to do it is take some of the most controversial voices on the extreme right -- like Limbaugh and [Alaska Gov. Sarah] Palin -- and try to insist they speak for all members of the center/right movement..."
http://voices.washingtonpost.com/thefix/2009/01/is_rush_limbaugh_the_new_face.html?wprss=thefix

Tax Cuts Won't Build Schools

TW: Mark Thoma is a progressive economist but appears fairly level-headed about it. Lets high-strung than say Paul Krugman but then Thoma is not shelled personally and repeatedly daily like Krugman. His points are simple: we need infrastructure (broadly defined) re-built, and the sooner the better.

From Mark Thoma's blog:
"Tax cuts won't build schools, or any other public good.

And right now, with so much of our infrastructure in need of attention, we need public goods.
We tried the tax cut approach to stimulating the economy once, we had no choice since Bush and the Republicans would not have passed any other type of stimulus package.

Guess what? It didn't work very well, and we have little to show for it. Had we, say, rebuilt water systems instead, at the very worst we'd have better water. That's not so bad in any case.

And it's been interesting, if that's the right word, to watch the same people who delayed fiscal policy for months and months and months as they insisted that we try tax cuts first now tell us that it will take too long to put the spending in place. They don't seem to realized that's because of their insistence on the use of tax cuts rather than spending. If we had started on these projects a year ago instead of enacting the tax cut package to appease the right, timeliness would not be such an issue - we might already be repairing sewage systems, rebuilding roads, and so on.

I've even heard some who ought to know better argue that because forecasts say the recession will end soon, we can't possibly get the spending in place soon enough. That is, they argue that by the time the spending hits the economy, the economy will have already recovered (these are often the same people who reassured us that there was no housing bubble, and there was not worry anyway because the recession, if it hit at all, would be very mild and easily absorbed by our dynamic, flexible economy). Never mind that forecasts beyond around six months ahead are not much better than a coin flip, and they know it, some forecast somewhere says that the recession will end before spending is in place, and that's enough for them to take the argument public. What if the forecast is wrong?

It's not completely clear to me that the fact that the recession might end soon undercuts the case for government spending anyway. If the money is spent on large, socially beneficial projects - and lots of infrastructure comes under this heading - then so what if the economy recovers? These are things we very much need, and that won't change just because the economy is doing better. There will be net benefits no matter the state of the economy, but the net benefits will be higher if we pursue these projects when the costs are low. If we are lucky, and the economy recovers very fast, much faster than expected, then there will still be benefits, they just won't be as large. "
http://tinyurl.com/bhhjss

Listening to Limbaugh Can Cause Blindness...

TW: I rarely mention Limbaugh (or say Coulter) because they are not journalists or even pundits merely entertainers who live for criticism. Obama made the error of mentioning the Puffy One Friday which I am sure sent Puffy into spasms of glee. But the Drudge/Puffy attack on Pelosi based on her comments Sunday on birth control funding is classic right-wing hack work. They strongly implied Pelosi was supporting population control as a cost savings measure. One would hope sane listeners would say to themselves why would Pelosi be for such a thing but somehow I fear that may not always be the case.

From Karen Tumulty at Time:
"...Like other portions of the stimulus bill, this measure [to which Pelosi referred] would not only aid states, but also provide preventative, cost-saving health care to help low-income women support their families and keep working. It focuses on access to recommended services and contraception to prevent unplanned pregnancies and promote maternal and infant health — not abortion. An upcoming Congressional Budget Office report estimates that this change would save $200 million over five years and $700 million over 10.

No one would be forcing states to pay for family planning services. States can now cover low-income women if they get a state waiver, but approval can take a long time. Despite these bureaucratic hassles, 27 states have already “obtained federal approval to extend Medicaid eligibility for family planning services to individuals who would otherwise not be eligible.” This bill would simply allow states to skip the administrative delays."

Things I Like - Art

An alternative viewpoint from artist Rob Gonsalves

The Sun Sets Sail

Nocturnal Skating

Still Waters

Tributaries

Ladies of the Lake

Carved in Stone


See more from Rob Gonsalves at the following link:
http://www.discoverygalleries.com/ArtistGallery.asp?artist_id=23&category_id=2>

An Alternative Republican View On Their Future

TW: David Frum is a moderate Republican, one of those who saw Sarah Palin and said "no thanks". For that some Republicans have ostracized him but I believe they would do well to listen to him. He lays out his framework for a Republican revival, many of the ideas are good.

From David Frum via Newsweek:
"A generation ago, the great majority of the most educated Americans voted Republican. The elder George Bush, for instance, defeated Michael Dukakis among college graduates by 25 points. But that advantage has been eroding, and last year Barack Obama became the first Democrat since Lyndon Johnson to win a majority of American voters with four years of higher education.

This is no small bloc, especially within white America, where Republicans do best. Almost one third of white Americans hold a college degree, up from one fifth in 1990. Republicans cannot win without this growing group. To recover them, we need to do four things:

1. We must develop economic policies that are more relevant to today's middle class. Adjusting for inflation, college graduates earned less in 2006 than they did in 2000. The culprit: rising health-care costs. Until Republicans can offer hope on this issue, our economic message will bypass those whom it would otherwise most benefit. Most Americans do not want government-provided health care. They could, however, be receptive to a market-oriented system—if we can intensify competition between private providers to slow the rise in health-care costs. [TW: Am skeptical on this one but that is for a different post]

2. Republicans need to modulate our social and cultural message. Not jettison. Not reverse. Modulate. For example: we are a pro-life party, but every Republican platform since 1980 has gone much further, calling for a federal constitutional amendment to ban all abortions in all states under almost all circumstances. We don't mean it. We don't act on it. Yet we keep saying it.

That's just one way in which we're confusing voters. We don't intend to police every single one of the millions of deathbeds in America, either. So why did we obsess over Terri Schiavo? We don't believe in sectarianism, yet some candidates in 2008 seemed to cross that line. One explicitly campaigned as a "Christian leader." This is self-destructive in a country where the fastest-growing religion is no religion at all.

Meanwhile, some moderate GOP stances go unpublicized. George W. Bush allowed private-sector and university stem-cell research to proceed unregulated. How will voters know that, unless we forcefully remind them?

3. We have to adopt an environmental ethic of our own. This does not mean endorsing every scare story hyped by professional greens. From apples supposedly poisoned by the growth chemical Alar to the alleged commercial viability of wind power, green groups have been wrong at least as often as they have been proved right. But we do have to recognize a global shift in consciousness on environmental issues.

Whenever a city or county considers whether to widen a highway or tear down a historic building, it's the local Republicans who seem to favor more traffic and less beauty. Yet almost every major environmental law of the past half century was signed by a Republican president, including the Clean Air Act of 1990, which effectively ended the acid-rain problem. It's time Republicans treated this history as a selling point. For women voters especially, environmental protection has joined national security as part of what it means to "keep us safe"—and the GOP should make the case that it has always done that best.

4. We need to regain our historic advantage as the party of competence. College-educated Americans are among the hardest-working people in the world. They expect their government to work hard, too. Instead, Republicans have presided over Iraq, Katrina and the catastrophic mortgage meltdown—the worst sequence of public-sector fiascoes in a generation.

Republicans champion limited government, and well we should. Unfortunately, we sometimes talk as if we oppose government altogether and welcome its failures as opportunities to say, "I told you so." This is foolish. Americans don't blame "the government" for Iraq. They blame the people they hired to run the government. If we Republicans keep telling them we cannot make their government work as expected, they'll hire somebody else (as they already have).

We Republicans cannot recover the votes of the college-educated until we understand why we lost them. So long as we think Barack Obama won because of a fluke—because he waltzed into an economic crisis, or because his supporters somehow mastered better election technology, or because he somehow bamboozled the American public with vague, endearing promises of change—so long as we think those things, so long will our troubles continue. Barack Obama won because a majority of Americans believed he was an intelligent, levelheaded and responsible person who could solve problems they cared about. If we're to beat him—or succeed him—we're going to have to convince them that we can do the same or better"

Economic Performance By President

Click to enlarge

The Two Best Arguments Yet For Stimulus

Number One: Warren Buffett speaks the truth as in we don't know what will really work but doing nothing almost certainly will not

From Nightly Business Report:
"[interviewer]: But there is debate about whether there should be fiscal stimulus, whether tax cuts work or not. There is all of this academic debate among economists. What do you think? Is that the right way to go with stimulus and tax cuts?

Buffet: The answer is nobody knows. The economists don’t know. All you know is you throw everything at it and whether it’s more effective if you’re fighting a fire to be concentrating the water flow on this part or that part. You’re going to use every weapon you have in fighting it. And people, they do not know exactly what the effects are. Economists like to talk about it, but in the end they’ve been very, very wrong and most of them in recent years on this. We don’t know the perfect answers on it. What we do know is to stand by and do nothing is a terrible mistake or to follow Hoover-like policies would be a mistake and we don’t know how effective in the short run we don’t know how effective this will be and how quickly things will right themselves. We do know over time the American machine works wonderfully and it will work wonderfully again."

Number Two: Larry Kudlow is unalterably and vociferously opposed to the stimulus, when fools oppose then I support.

From Larry "Goldilocks Economy" Kudlow's blog:
"It really is time for the congressional Republicans to come up with a tax-cutting alternative that includes slashing the marginal tax rate for large and small businesses and individuals, and brings the investor class back into play. Not only with a cap-gains tax holiday, but also with a much larger capital loss deduction. Add to this immediate cash expensing for all businesses.

Right now capital is on strike. So are investors. Supply-side incentives will bring them back. This is where the GOP must go."

Republicans In the House Will Squawk But Will It Matter

TW: Good piece putting some of the back and forth relative to the "stimulus" plan in perspective. Viqueira makes the point that there are major differences between the House and Senate in terms of what the minority party can do (either Dem or Repub). Net net, Republicans House members can squawk but little else. The Republican Senators on the other hand will have some leverage that is where the real action will occur.

From Mike Viqueira at NBC:
"There appears to be some surprise at how the members of your U.S. House aren't all joining hands to pass the stimulus, after all the talk and expectation of a post-partisan new day dawning over Washington.

...we offer the following in an effort to provide a contextual prism through which we might view this institution:

"The job of the minority is to make a quorum and to draw its pay." Words spoken by House Speaker Thomas Reed in 1890 that perfectly describe the sweeping hegemony of the majority party -- and emasculation of the minority -- that is as evident today as it was 119 years ago. The majority here controls every step of the process, and when you control the process, you control the substance. To put it in the current vernacular, the prevailing view over the years is that the minority should simply sit down and shut up.

It's not too much of an overstatement to say that the most oppressed minority in America is the minority here in the "lower body." If you're a member of the party out of power, R or D, you typically are not permitted to have your bills considered in committee or on the floor; it's hard to get your amendments debated and voted on (especially the ones that have a chance of passing); you even have to go hat in hand to the majority staff in order to get a room to meet in. In short, you take it in the neck every time.

It's been this way since the time of Henry Clay, and through the years it has more or less held true regardless of which party is running the place.

The Senate, where any one random member can raise his hand to object and gum up everything, is a completely different animal. But the House was designed to be more responsive to public sentiment (though the Founders were against the idea of a two-party system in Congress (Federalist #10, if you really care), and over time the majority has established rules and procedures that make it easy to exercise its will and run roughshod over those out of power. It's what the legislative geeks call a "majoritarian institution."
.... So, as it relates to the current debate, Democrats will be happy express the view, on background, that Republicans lost the last two elections, and, as a result, they should stop whining and get over it.

This attitude is manifest in the fact that Republicans were shut out of the process that resulted in the base bill. Yes, they had a chance to offer amendments during the committee process. But they lost those votes, and the argument can and will be made by Democrats that this is as it should be, that Republicans don't have the votes because the voters saw fit to elect someone else with different policies, and therefore they lost fair and square.

Two years ago, Nancy Pelosi rose to the speaker's dais on a platform of institutional reform. Despite that pledge, the majority, which she controls, has gone the other way, limiting the minority's ability to influence the legislative product in the House, largely in reaction to what Democrats consider to be a pattern of parliamentary abuse by Republicans.

What Pelosi found is that she couldn't both reverse a culture generations in the making and still be an effective speaker of the House. Surely Rahm Emanuel, her former lieutenant and the new White House chief of staff, understands this.

So if there is to be an era of bipartisanship, it is more likely to rise in the Senate. The cold, hard fact is that with their current advantage in the house, Democrats simply don't need Republicans to enact their agenda"
http://firstread.msnbc.msn.com/archive/2009/01/23/1758877.aspx

A Look Back To a 12/30/08 Post: Playing Games With the Stimulus

TW: I thought this post worth a repeat given how the stimulus plan was bandied about over the weekend.

From 12/30/08
TW: Nate Silver looks at a little game theory to assess what the Republicans will likely do relative to the Obama economic plan. Basically from a political standpoint, if the economy is demonstrably stronger by the 2010 mid-terms, then regardless of whether the Republicans support the plan or not, the Dems will be positioned to build on their recent electoral strength. Therefore, the Republicans can strongly oppose the plan knowing that if it fails they will be better positioned to pick up the political benefit.

Things are never quite so simple but the gist of what Silver says appears accurate to me. We will hear a great deal of huffing and puffing about Keynes, stimulus, tax cuts and free markets but at the end a simple cynical political calculus will rule. Btw, this will be one vote where not having 60 Senators will help the Dems. At least one and probably three or four GOP Senators will be needed to achieve cloture in the Senate. Some level of GOP support will be required.

From Silver:
"...let's say that the economy still sucks in 2010 -- which, frankly, is a pretty good bet. That's going to work much, much better for you if you've voted against the stimulus. Not only can you pin the blame on the donkeys, but you can campaign on tax cutting and fiscal responsibility -- the stimulus will "prove", once and for all, the wisdom of conservative economic principles.

And then think about this: the Democrats are going to be trying to spend $800 billion in taxpayer dollars as quickly as they can possibly get away with it. Somewhere along the way, they're going to wind up funding a Woodstock Museum or a Bridge to Nowhere. Somewhere along the way, an enterprising contractor is going to embezzle a bunch of stimulus money, or cook up some kind of pay-to-play scheme. Maybe if you're really lucky, this will happen in your District. Better to keep the whole thing at arm's-length and make sure that Democrats get the blame for that.

So it seems to me that your risks and rewards are pretty asymmetrical. The public loves Obama, whereas that (R) beside your name is still causing you problems, especially when every Newt and Bobby and Sarah out there is perfectly happy to throw you under the bus. Fact is, you're not going to get the benefit of the doubt. If the stimulus package is seen as a success, you aren't going to get an ounce of credit for it. But if it's seen as a failure, you'd better make damned sure that you've distanced yourself from it.Maybe you can go through the motions of soliciting a compromise -- all the better that way to say I-told-you-so later on. But do you actually want a compromise? I think not. Better to let the Democrats be careful what they wish for, and make sure that they get it."
http://www.fivethirtyeight.com/2008/12/you-are-republican-socratic-dialogue-on.html

Things I Like - Humor

I was in an odd mood today - these made me laugh.

P.S. - Happy Birthday Amy!

P.S.S. - Belated Happy Birthday Jan! (I just thought of doing this today, sorry I missed you)

First the Economies Then the Governments

TW: This is the stuff that gets me concerned about exactly where we are headed. Obviously Iceland is very small, tiny in fact (300K people) but political unrest is fermenting in many places in particular throughout Europe. Interestingly it is the more affluent nations that have had the greatest rumblings.

These are the times that test the assumptions which underlay societies economic and political structures. Globalization (a positive force from my perspective) will be under stress. Where the political unrest goes no one knows, but rest assured if the economic malaise continues for much longer it will grow quickly.

From Der Spiegel:
"Icelandic Prime Minister Geir Haarde, rattled by the financial crisis and widespread anti-government protests, called early national elections for May 9 on Friday and announced he was stepping down.

...Iceland, the epicenter of the banking crisis, saw huge debts toppling its banks last autumn. Its fragile economy is expected to contract by 10 percent this year. Faced with rocketing unemployment and rising inflation, Icelanders have increasingly taken to the streets to voice their anger. Tensions in Reykjavik peaked on Thursday night when police used tear gas to control rioters for the first time since 1949...Polls suggest a new election would likely spell a swing to the left with the Left-green party profiting from the tide of anti-capitalist sentiment.

Icelanders haven't been the only ones in Europe taking to the streets to voice their disgust at worsening economic conditions. People in Bulgaria, Latvia, Lithuania, Hungary and Greece have likewise been voicing their frustration.

...Last week, Lithuanian police fired tear gas at demonstrators who threw stones at the parliament in protest at government social spending cuts. Meanwhile in Bulgaria, hundreds protesters smashed windows, fought police and damaged cars when an anti corruption protest escalated into a riot."
http://tinyurl.com/advmjp

TW: You have undoubtedly seen this photo, but it was by far my favorite from last week. Photos frequently resonate with metaphorical impact but this one I thought was off the charts. Obama is an open book for now, will he measure up to the greatest of all-time?

Reading List

1) Malcolm Gladwell (author of Blink etc.) on why talent assessment is so difficult. He compares assessing quarterbacks to teachers to investment advisors
http://www.newyorker.com/reporting/2008/12/15/081215fa_fact_gladwell
2) From Newsweek a brief chronology of attempts to mediate between Israel and Palestine- so close but yet so far and so messed up.
http://www.newsweek.com/id/177713
3) For those wanting a little shot of schadenfreude relative to those Wall Street mucketymucks whose fortunes have declined big-time recently read this Vanity Fair piece on struggling folks in Greenwich and the Hamptons.
http://www.vanityfair.com/magazine/2009/01/wall_street200901
4) You think immigration is a tough issue in the U.S., try Japan. Their population is in a serious spiral downward, there is really only one way to stop the slide- immigration- but they will likely choose to shrink precipitously instead
http://www.economist.com/world/asia/displaystory.cfm?story_id=12867328

It Is the Power Grid, Not Only the Power Generation

TW: Everything I read about alternative energy ends up circling back to the power grid to actually deliver that alternative energy. When we discuss stimulus spending, power grid upgrades are probably some of the most relevant and needed components of national spending. Especially as it is the sort of investment with chicken and the egg and regulatory aspects which need governmental prodding in order to accelerate. Not to mention vested interests probably trying to keep the infrastructure status quo in order to slow down alternatives.

From Newsweek:
"A clean-energy economy will require lots of new hardware—sleeker wind turbines, more efficient solar panels, recharging stations for electric vehicles. It'll also require smarter software, to efficiently guide energy to where it's most needed. Always ambitious, Google hopes to be the architect of this software.

...The electric grid is in many ways the backbone of our economy. Beginning in Thomas Edison's time, we've built a massive system to both generate and move electricity around the country, from nuclear-power plants and coal-fired generating facilities, across a huge infrastructure of wires and into people's homes. However ... in many ways [the grid] isn't up to the task that we're asking it to take on in the next couple of decades … If we're really going to take advantage of renewable energy, we have to build substantially more transmission capacity to move wind-generated electricity from the Dakotas to Chicago or solar-generated power from the Southwest to L.A.

...We've also got to build a more intelligent grid. Electricity generally flows in one direction, from where it's generated to where it's used, but increasingly we want to be able to send electricity in multiple directions. For example, if we have a fleet of millions of plug-in vehicles, we've got to have a grid that not only knows how to fill up the batteries with electricity, but one where the same vehicles can send electricity back to the grid when it needs it. They can serve as a large storage capacity for the grid.

...we need what are called smart meters. These are meters that record real-time information and can send it over the Internet to utilities, and then get it directly to consumers. You wouldn't expect to go into a grocery store and do your shopping and not know what the prices for anything were and only get a bill at the end of the month. We need to get to a point where people have a lot more sense about what we're paying for energy at any given point, and more choice about where it comes from and how green it is."
http://www.newsweek.com/id/169165