Archive for April, 2011

Jeep disassembled, rebuilt in under 4 minutes

April 30, 2011

Human excellence in any form is a joy to behold.

The men in the video are Canadian army engineers.

Click on Product by Process to see more like this.

Hat tip to Jason Kottke.

A John Galt thought experiment

April 29, 2011

In Ayn Rand’s novel Atlas Shrugged, the people on whom the nation depends to keep functioning – mainly entrepreneurs and their best middle managers – went on strike.  Led by the mastermind John Galt, they hid out in a secret place called Galt’s Gulch until the economy and society crumbled and the people were willing to give them their due.

I propose a thought experiment.  Make up your own list of indispensable people and then match it against the Forbes magazine list of the world’s richest people.  Or go down the Forbes 400 list and decide what would be lost if each of the members “went Galt.”

Norman Borlaug

One of my heroes is Norman Borlaug, the architect of the Green Revolution in Asia.  He of course did not produce the genetically improved crops by himself.  He was the head of a team of geneticists and agronomists.  But I think it is safe to say that without him the Green Revolution would not have happened when it did.  The environmental writer Gregg Easterbrook said that Borlaug’s work may have saved the lives of as many people as Hitler and Stalin murdered.

He had many of the qualities of an Ayn Rand hero – competence, determination, original thinking, indifference to public opinion.  His work was strongly opposed by neo-malthusians who thought saving the lives of people in overpopulated Third World countries was an exercise in futility.  But in one important respect, he did not fit the John Galt mold.  He did not get rich, or attempt to get rich, from his work.

Or, if you are not a fan of the Green Revolution, consider Jonas Salk, the creator of the Salk vaccine, or Tim Berners-Lee, the creator of the software that makes possible the World Wide Web.  They made their discoveries freely available to the public, without charging a licensing free and without trying to determine who deserved their help and who didn’t.  This is in contrast to the fictional John Galt, who withheld his perpetual energy source until the world paid him tribute.  By Ayn Rand’s standard, Jonas Salk and Tim Berners-Lee were lacking in self-esteem.


Why I am not an Objectivist

April 28, 2011

Some time back the editors of the Modern Library listed their choices of the 100 greatest novels of the 20th century.  At the same time they polled their readers’ choices.

Ayn Rand

The editors’ top picks were Ulysses by James Joyce and The Great Gatsby by F. Scott Fitzgerald.  But the readers’ top picks were Atlas Shrugged and The Fountainhead by Ayn Rand.

The same was true of the editors’ and readers’ picks of the top non-fiction books.  The editors’ top picks were The Education of Henry Adams and William James’ The Varieties of Religious Experience. The readers’ top pick was The Virtue of Selfishness by Ayn Rand, and their No. 3 pick was Objectivism: the Philosophy of Ayn Rand by Leonard Peikoff.

In my life, I have encountered more people who have read Atlas Shrugged and The Fountainhead than any other serious novel or philosophical work.

What accounts for the enduring appeal of Ayn Rand and her philosophy of Objectivism?  Two things, I think.  The first is that her philosophy incorporates many important truths; the second is the clarity and force with which Ayn Rand expressed her philosophy.

Ayn Rand grew up in the Soviet Union, where the language of altruism and self-sacrifice was used to justify a monstrous tyranny.  As a young woman, she moved to the United States, where she heard the same king of language being used to mask hidden agendas.

She created an alternative philosophy, based on rationality, individual freedom and respect for competence.  She told her followers to determine their own purposes in life, and stick to it, and not to try to live up to others’ expectations.  The name of her philosophy, Objectivism, was a recognition that there is such a thing as objective reality, which will catch up with you, whether you like it or not.  She recognized the contradictory nature of altruism as an ideal; as Peanuts’ Lucy once asked: if we are put on earth to serve others, what are the others here for?

All these ideas are true and important, and expressed in a way that could be understood by any intelligent high school student.  (I mean this as a compliment, not as a back-handed slur.)

The problems I have with her philosophy are:

• The conflation of actual existing capitalism with her ideal of capitalism, the unknown ideal.

• The conflation of actual existing greedy and selfish people with her ideal of the virtue of selfishness.

• Her lack of recognition that not all choices are between good and evil – some are choices between good and good, bad and bad or alternatives about which not all the facts are in.


Is higher education turning into a ripoff?

April 28, 2011

Higher education is increasingly becoming a ripoff, writes Malcolm Harris on the web log of n + 1 literary magazine.  College tuition has increased sevenfold (adjusted for inflation) since 1978, but the average quality of education has gone in the other direction.  The salaries of administrators continually increase; those who do the teaching are being asked to do more for less pay and job security.

Students are continually being told that they have no economic future if they don’t go to college, so they take on crushing loads of debt.  American college graduates owe more than $800 billion in college loans.  American college loan debt now exceeds American credit card debt, while unemployment among recent college graduates is the highest on record.

If tuition has increased astronomically and the portion of money spent on instruction and student services has fallen, if the (at very least comparative) market value of a degree has dipped and most students can no longer afford to enjoy college as a period of intellectual adventure, then at least one more thing is clear: higher education, for-profit or not, has increasingly become a scam.

via n+1.

I’ve written about this previously, but Harris told me things I hadn’t known.  Student loan debt is securitized and repackaged into something called Student Loan Asset-Backed Securities, aka SLABS, just like the subprime mortgage loans.  So you have the potential for the same kind of crash.

Another thing I hadn’t known is that, under the  Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, no education loan, even money borrowed on a credit card, cannot be discharged through bankruptcy.  Before 2005, this only applied to federal government loans.

That means a college graduate with an outstanding college loan is in a form of indentured servitude.  If the graduate defaults, he or she is in the position of a debtor’s prison inmate on a work release program.

Unless something changes, college loans are headed for the same kind of financial crash as mortgage loans.  And colleges and universities seem to be following the failed pattern of U.S. manufacturing industry, and setting themselves up for the same kind of failure.  What happens to the higher education industry when their potential students come to realize they are not getting value for money?  Will they reform, or fall into the same cycle of cutting costs and quality of product?  This is a familiar script.


President Obama’s long-form birth certificate

April 27, 2011

President Obama made public his long-form birth certificate today.

Click on President Obama’s Long Form Birth Certificate for the White House report on President Obama’s press conference and Birth Certificate Long Form PDF for a PDF version of the certificate.

Click on The Long-Form Birth Certificate! or The Long-Form Birth Certificate of Barack Obama to view it in a larger and more readable form.

It is amazing to me that so many people take stuff like this seriously.  The country is bogged down in three overt wars and an unknown number of covert wars, unemployment is stuck between 9 and 10 percent, and local and state governments are unable to maintain basic public services.  If I were an opposition leader or candidate, these would be the things I would focus on, rather than the speculation, which never had any basis whatsoever in fact, that the President was born in another country.


Dagny Taggart and the railroads

April 27, 2011

I read The Fountainhead and Atlas Shrugged many years ago, and last week saw the movie “Atlas Shrugged Part One,” the first of a trilogy based on the novel.  It is ironic that Ayn Rand chose the railroad heiress Dagny Taggart as the heroine.  American railroads are one of the starkest illustrations of the difference between actual existing capitalism and Ayn Rand’s “capitalism, the unknown ideal.”

The American railroad system did not come into existence as a result of autonomous individuals engaging in voluntary exchange in a free and unregulated market.  The railroads were built by government-chartered limited-liability corporations exercising the power of eminent domain and other quasi-governmental powers.  The transcontinental railroads were subsidized by huge grants of public lands, whose value far exceeded the cost of the railroad construction.

Railroad operators in the 19th century expropriated small property owners in the name of the greater good, and obtained monopoly rights in the name of the public interest.  They never hesitated to call in state militias or federal troops to suppress strikes.  But when farmers and small merchants proposed regulation of monopoly freight rates, they called a violation of property rights and the free market.

Give credit where credit is due.  Construction of the American rail network, and especially the transcontinental railroads, was a great achievement – second only to the construction of the Trans-Siberian Railroad in Russia.  It is no small thing to supervise the construction or operation of a railroad. People who can do this well deserve respect and reward.  But few of the fortunes that were made from railroads at the time were made by the people who made the trains run on time.  They were made by financial and political manipulators.

Railroads in the late 19th century were notorious for issuing “watered stock” – stock in such amounts that the stocks’ face value greatly exceeded the value of assets.  At least the stock did represent a tangible asset, however inflated the pretended value.  The market manipulators of today trade in “derivatives,” which do not represent any asset at all.

Railroads carry freight with less expenditure of energy than trucks and much more less than airlines. Yet in the 20th century, the railroads were unable to compete.  It was left to the federal government to reorganize bankrupt railroads into the Conrail and Amtrak systems.


No recession for Washington lobbyists

April 26, 2011

This chart originally appeared in Time magazine.

Hat tip to Barry Ritholtz.

Earthquakes, monopoly and supply-chain risk

April 26, 2011

Barry C. Lynn, a senior fellow at the New America Foundation, says the Japanese tsunami shows the vulnerability of the global corporate economy.  The tsunami and earthquake destroyed factories that make a high proportion of essential components for the world’s industry – 60 percent of a resin used in making semiconductors, 90 percent of copper for lithium batteries, 50 percent of a microprocessor used to control automobile transmission and brakes.  The result is a domino effect that has hit not only Japanese industry, but industry worldwide.

Before globalization, he said, industry wasn’t this vulnerable.  Industrialists such as George Eastman and Henry Ford sought to make their corporations as self-sufficient as possible.  Eastman Kodak Co. processed the wood pulp for its photographic paper; Ford Motor Corp. operated rubber plantations to have raw material for tires.  Supply disruptions might affect one corporation, but not a whole nation, let alone the world.

Now companies are tightly linked to independent suppliers located all over the world.  To avoid the cost of maintaining inventory, they rely on just-in-time delivery.  So they are vulnerable to any interruption in the supply.

Lynn said the problem isn’t really globalization, outsourcing or just-in-time delivery.  The problem is monopoly.  Companies are not vulnerable if they have many suppliers, spread all over the world.  But when they come to depend on one company at one location, they are at risk.

The problem, Lynn said, began under the Reagan administration, which abandoned a commitment to promoting business competition, and adopted the philosophy that monopoly is all right if it promotes economic efficiency.  Lynn said the Reagan administration at least fought for the interests of American business against foreign monopolies.  He said it was the Clinton administration that abandoned economic nationalism and adopted the gospel of efficiency on a worldwide basis.

The problem is that economic efficiency increases risk.  If you squeeze all slack and duplication out of a system, you make it more efficient, you save money and time, but you have nothing to fall back on if the system fails.


The real national debt

April 25, 2011

Double click to enlarge.

I just came across an interesting Wikipedia article, with facts and figures indicating that the federal government’s debt, which we hear so much about, is only a part of U.S. indebtedness.  We call the government’s debt the national debt, but it is small compared to the  total debts of financial institutions and of individual Americans.

The green strip on the chart is the federal government’s debt, the yellow strip is the total debt of American households, and the orange strip is the total debt of American financial institutions.

In 1946, the total US debt-to-GDP ratio was 150%, with two-thirds of that held by the federal government. Since 1946, the federal government’s debt-to-GDP ratio has since fallen by nearly half, to 54.8% of GDP in 2009. The debt-to-GDP ratio of the financial sector, by contrast, has increased from 1.35% in 1946 to 109.5% of GDP in 2009. The ratio for households has risen nearly as much, from 15.84% of GDP to 95.4% of GDP.

via Wikipedia.

According to this article, the bulk of the debt held by U.S. financial institutions – $8 trillion worth – consists of government-guaranteed mortgages, which is nearly equal to the federal government’s own debt.  This means the government’s potential liability is nearly double what is reported.  (I can’t get used to quoting figures in trillions of dollars; for me, billions of dollars are an unimaginably large amount.)

What I get from the chart and the accompanying article is that the best way to improve the debt-to-GDP ratio by putting Americans to work on useful things, which will increase the GDP and gives us the means to pay down our debts.

Click on Financial position of the United States to read the full article in all its complexity.  Click on the discussion thread for argument as to the meaning of the figures.

Hat tip to Obsidian Wings.

One of the varieties of religious experience

April 24, 2011

Peter Owen-Jones is a vicar of the Church of England who traveled the world looking for spiritual enlightenment.  My friend Oidin e-mailed me a link to this video showing his experiences with Coptic Christian monks in Egypt, who carry on the tradition of St. Anthony and the early Christian Desert Fathers.

Click on Extreme pilgrim – ascetic Christianity to view it.

I think this is interesting, but I don’t have anything original to say about it.


Watch the cherry trees blossom

April 23, 2011

Hat tip to Jason Kottke.

A photo album of the Auschwitz death camp

April 22, 2011

A Hungarian Jewish woman who survived Auschwitz found an SS guard’s coat which she took to shield her from the cold. In the pocket of this coat she found a photo album. It contained pictures of what went on in this extermination camp. Imagine her reaction when she saw a picture of herself coming off of the train as well pictures of her family who were already murdered. In 1980, this woman donated the album to the Yad Vashem archive in Jerusalem, where it will forever be displayed.

Click on The Auschwitz album and turn up the sound to view Yad Vashem’s multi-media presentation based on that album.  It is worth five minutes of your time.  I thank Bill Elwell for the link.

Yad Vashem has a great deal of important historical material about the Holocaust on its web site.  Click on Yad Vashem to get to the home page.


How media multi-tasking makes us stupid

April 21, 2011

New research shows that multiple use of social media undermines your ability to think analytically, to remember things long-term, to focus on one thing or even to multi-task.  It vindicates all the college professors I know who complain about their students texting during class instead of paying attention.

Clifford Nass

Clifford Nass, director of Stanford University’s Communication Between Humans and Interactive Media Laboratory, said that what the social media promote is multi-tasking—trying to do more than one thing as the same time. So he organized a team to study multi-tasking.   Here are highlights of an interview on what they discovered.

What did you expect when you started these experiments?

Each of the three researchers on this project thought that … high multi-taskers [would be] great at something, although each of us bet on a different thing.

I thought, those guys are going to be experts at getting rid of irrelevancy.  My second colleague, Eyal Ophir, thought it was going to be the ability to switch from one task to another.  And the third of us looked at a third task that we’re not running today, which has to do with keeping memory neatly organized.  So we each had our own bets, but we all bet high multi-taskers were going to be stars at something.

And what did you find out?

We were absolutely shocked.  We all lost our bets.  It turns out multi-taskers are terrible at every aspect of multi-tasking.  They’re terrible at ignoring irrelevant information; they’re terrible at keeping information in their head nicely and neatly organized; and they’re terrible at switching from one task to another.


Separatism: Chicano and Confederate

April 20, 2011

The state of Arizona has set rules for the public school curriculum to prevent Hispanic children from being taught to think of themselves as part of a nation separate and distinct from their Anglophone neighbors.  The fear is that the Spanish-speaking population of the Southwest might seek a separate national identity, like the French-speaking people of Quebec.

It is interesting that the comparison is made to Quebec, which after all has remained part of Canada, and not to the white people of the American South, who once upon a time did revolt and wage war against the United States.  Southern separatism has a place of honor in American opinion.  According to a recent CNN poll, one in four Americans sympathize more with the Confederacy than with the Union, and 40 percent of white Southerners sympathize more with the Confederacy.

Nor is this a completely dead issue.  A couple of years back, Rick Perry, the governor of Texas, spoke of Texas seceding from the Union.

American patriotism is consistent with loyalty to a heritage, be it Mexican, Confederate or something else.  A new citizen of the United States is called upon to renounce all allegiance to foreign governments, to promise to uphold, protect and defend the Constitution of the United States and to serve in the armed forces or alternative service if called upon by lawful authority.  But the United States is a tapestry of many heritages.  This is a plus not a minus.


For the love of newspapers

April 20, 2011

My friend Anne Tanner sent me a link to an article about the new publisher of the Star-Tribune in Minneapolis.  The Star-Tribune was once one of the nation’s great newspapers, but has fallen on hard times.  In the past 15 years, it has gone through three owners and one bankruptcy.

Michael Klingensmith, the new publisher, spent his entire previous career with Time Inc. and was one of its three top executives before he took early retirement.  He is a native of the Minneapolis area, and he took the job because he cares about Minneapolis and its newspaper.

The article is a good portrait of the kind of businessman strives to make a profit in order to accomplish a goal, as against the kind of businessperson whose aim is to maximize profit for its own sake by any means necessary.  For the past 30 or so years, the newspaper business has been dominated by the second kind, who milked newspaper profit for themselves and their stockholders rather than reinvesting in the business.  I think the continuing viability of the so-called “alternative” press is because it is run by people who love what they’re doing more than they love money.

Many good things are being done in the new Internet media, but I don’t see any of them as a substitute for newspaper journalism, either in depth of coverage or giving a community an identity.

Click on A Second Act for Michael Klingensmith and the Star Tribune to read the New York Times article.

Discredited S&P may downgrade US bonds

April 19, 2011

Standard & Poor’s Corp. announced yesterday that the United States government was on its watch list to lose its AAA rating for government bonds.  AAA is S&P’s highest rating for safety.  The United Kingdom also is on the watch list, and Japan has lost its AAA rating.  This is a big deal because the lower the credit rating, the higher the interest rate a borrower must pay to get credit.

It is amazing to me that S&P ratings are still taken seriously.  S&P, along with Moody’s and Fitch’s, the other two big credit rating agencies, gave AAA ratings to mortgage-backed securities, leading millions of gullible investors to think they were safe investments.  Mortgage defaults led to the crash on these securities, bringing on the financial crisis and the recession we now are in.  Yet little or nothing has been done to improve the rating system, establish regulatory oversight or hold the rating agencies accountable for their results.

The recession made the government lose revenue and increase spending, which is one of the main reasons why the United States is in a debt crisis – if it is.  So S&P, which helped create the problem, is dictating to the United States government what to do to solve the problem.

I wrote  “if it is” because the U.S. ratio of debt to Gross Domestic Product is slightly less than the world average, and countries such as Germany and France, which have a higher debt to GDP ratio, also have a better credit rating.

The U.S. government, unlike the Wall Street banks, does not pay S&P for its credit rating, so maybe its rating of Treasury bonds is unbiased.  On the other hand, maybe S&P is merely pushing the Wall Street political agenda, to ignore unemployment and cut the deficit.  Instead of the government regulating Wall Street, Wall Street is dictating to the government.


Things to read for tax day

April 18, 2011

Nine Things The Rich Don’t Want You to Know About Taxes by David Cay Johnson.

Top Ten Tax Charts by the Center on Budget and Policy Priorities

Five Ways GE Plays the Tax Game by Jeff Gerth of ProPublica and Allan Sloan of Fortune.

Taxes and Spending for Beginners by James Kwak

Want a Flat Tax? I Got a Flat Tax for You by “Asymptosis”

Click on the links to read them.

Get an itemized receipt for your taxes

April 17, 2011

Rep. Jim Cooper, a Tennessee Democrat, has submitted legislation, suppported by members of both parties, to give all taxpayers a receipt showing where their money went.  People filing paper returns would get a paper receipt, and people filing electronically would get an electronic receipt.   It sounds like a good idea to me.

Click on An Itemized Taxpayer Receipt for 2010 to see Cooper’s calculation of what a typical taxpayer earning $50,000 a year got for his or her taxes.

The White House has put up a web site allowing taxpayers to calculate their own personal tax receipts. Click on Your 2010 Federal Taxpayer Receipt for the site.

Click on Cooper to Introduce Bipartisan Tax Receipt Bill for his press release on the bill.

Click on Jim Cooper’s pet issue for background.

My personal 10 commandments

April 17, 2011

One.  The truth is whatever it is.  Do not prefer lies or illusions to fact.

Two.  Do not devote your life to the pursuit of money, popularity or social status.

Three.  Do not use the language of religion, patriotism or idealism to justify superstition, intolerance or cruelty.

Four.  Take time to rededicate yourself to your best aspirations.

Five.  Honor those who nurtured and taught you.

Six.  Do not treat the lives of other people as less valuable than your own.

Seven.  Do not break promises or betray trusts.

Eight.  Do not cheat or exploit people, nor deny them what is due to them.

Nine.  Do not speak of other people falsely or maliciously.

Ten.  Do not envy someone else’s possessions, reputation, achievements or happiness, nor make yourself unhappy by comparing yourself to others.


How to throw a baseball

April 16, 2011

Click on Throwing Like a Girl for James Fallows’ 1996 article on the “kinetic chain” theory of how to throw a ball, by which the momentum of the weight of the body as a whole is transferred to the arm and then to the ball itself.

Click on Throwing Like a Tim Lincecum for his current update.


The pro-torture generation

April 15, 2011

A new study by the American Red Cross obtained exclusively by The Daily Beast found that a surprising majority—almost 60 percent—of American teenagers thought things like water-boarding or sleep deprivation are sometimes acceptable. More than half also approved of killing captured enemies in cases where the enemy had killed Americans. When asked about the reverse, 41 percent thought it was permissible for American troops to be tortured overseas. In all cases, young people showed themselves to be significantly more in favor of torture than older adults.

via The Daily Beast.

When I was a teenager, I saw a lot of war movies with Nazi and Japanese villains – the Gestapo chief boasting that “ve haf vays to make you talk,” the prison camp commandant sneering at the Geneva convention.  Their willingness to torture and abuse captives defined them as evil.  Later I was horrified by reports of Soviet and Chinese Communist brainwashing – the systematic attempt to break a human being mentally and morally, and turn the person into a puppet.  This, I thought, was the bright line between freedom and totalitarianism.  Whatever the faults of British and American democracy, I thought, there were things that our side would never so, and this was one.

It is true that in that time of my life, I was blind, perhaps willfully blind, to what went on in American prisons, and to the complicity of secret U.S. military and intelligence agencies with foreign dictatorships that practiced torture.  But there are worse things than hypocrisy.  A hypocrite at least acknowledges there are norms of human behavior, even if you don’t practice it yourself.

Fast forward to today’s generation.  A Red Cross survey says that nearly 60 percent of American teenagers think of torture as normal.  This is not necessarily racism, nor chauvinism, nor a double standard.  More than two-thirds of those who accept torture as normal think it is permissible when applied to Americans.  If we have a right to do it to them, they have a right to do it to us.  Fair is fair.

Why should this be surprising?  President George W. Bush boasts of having authorized torture.  President Barack Obama says torture was not illegal, and refuses to allow the Red Cross access to certain detention facilities abroad.  TV shows such as “24” and thriller writers such as Vince Flynn depict torture as a heroic act, and moral scruples as a form of cowardice.

But if you don’t think torture is absolutely wrong – is there anything you would think of as wrong?


What I would do about the deficit

April 14, 2011

I would put taxes back to where they were 10 years ago.

I would put military spending back to where it was 10 years ago.

If that didn’t do the trick, I would resurrect the idea of a single-payer federal health insurance plan.

Rep. Paul Ryan

I most certainly would not have the gall to proposed further reductions of the tax burden on the upper 1 percent of the population, as Rep. Paul Ryan and other Republicans do, and call this a deficit reduction plan.

Click on Tax myths and tall tales for an excellent article on taxes by David Cay Johnson in Rochester’s City newspaper.

Click on The Do-Nothing Plan for Annie Lowrey’s article on Slate explaining why doing nothing at all is more fiscally sound than adopting the Republican budget plan.  The do-nothing plan would allow the Bush tax cuts to expire and the Medicare savings under the Affordable Care Act to take effect.  These two things, she wrote, would bring the budget into balance within 10 years.

Click on Medicare Isn’t the Problem, It’s the Solution for Robert Reich’s ideas on how to cut health insurance costs.

Click on Ryan’s Five-Point Plan for a summary by Nobel economist Paul Krugman in the New York Times.

Click on The Budget Speech for Krugman’s views on President Obama’s budget plan.  My reaction is the same as Krugman’s.  I liked President Obama’s rhetoric, as I usually do.  My question is whether he will fight for his plan, which is a flawed compromise to begin with, or treat the points in his plan as bargaining chips to be negotiated away.

Click on Obama, Ryan and the Shape of the Planet for Paul Krugman’s comment on how the Obama and Ryan plans compare.


What the leaked State Dept. cables revealed

April 14, 2011

My friend Hal Bauer e-mailed me this link to an article in Britain’s The Guardian newspaper about a State Department cable revealed by Wikileaks.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

The Guardian’s Wikileaks archive of leaked U.S. State Department cables reveals a great many astute observations.  I wonder how many of these observations made their way up to Secretaries of State Condoleeza Rica and Hillary Clinton and how much of what Rice and Clinton were told was passed on to Presidents George W. Bush and Barack Obama.

My impression is that Presidents nowadays bypass the Foreign Service and conduct foreign policy through the Central Intelligence Agency, the Department of Defense and the National Security Council.  If so, and judging by results, maybe they should listen more to career diplomats.

Click on Wikileaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices for the full Guardian article.

Click on US embassy cables: browse the database for selections from The Guardian’s Wikileaks archive.

The decline of respect for work

April 13, 2011

My friend Anne Tanner e-mailed me a link to a fine article by Lewis Lapham, the former editor of Harper’s magazine, in his new magazine, Lapham’s Quarterly, about the devaluation of work and the worship of wealth and consumption.  Here are some highlights of the article.

Lewis Lapham

… The stock markets may have weathered the storm of the recession, as have the country’s corporate profit margins, but unless jobs can be found, we wave goodbye to America the Beautiful.

Not being an economist and never having been at ease in the company of flow charts, I don’t question the expert testimony, but I notice that it doesn’t have much to do with human beings, much less with the understanding of a man’s work as the meaning of his life or the freedom of his mind. Purse-lipped and solemn, the commentators for the Financial Times and MSNBC mention the harm done to the country’s credit rating, deplore the trade and budget deficits, discuss the cutting back of pensions and public services. From the tone of the conversation, I can imagine myself at a lawn party somewhere in Fairfield County, Connecticut, listening to the lady in the flowered hat talk about the difficulty of finding decent help. … …


The new global elite and the rest of us

April 12, 2011

My friend Marie Sidoti e-mailed me a link to an article in the Atlantic Monthly which drew a disturbing group picture of the new global elite of wealth.  They are not an elite of hereditary wealth, Chrystia Freeland wrote; most of them rose from the middle class through their enterprise and intelligence.  They are not content do sit back and enjoy lives of luxury; they use philanthropy as a means to reshape the world as they think it should be.

They meet at places like the World Economic Forum in Davos, Switzerland, where they hear presentations by people such as Desmond Tutu or Bill Clinton as medieval kings once heard theological disputes of medieval philosophers.

They have wealth beyond the dreams of most people.

[Novelist Holly Peterson] described a conversation with a couple at a Manhattan dinner party: “They started saying, ‘If you’re going to buy all this stuff, life starts getting really expensive. If you’re going to do the NetJet thing’”—this is a service offering “fractional aircraft ownership” for those who do not wish to buy outright—“‘and if you’re going to have four houses, and you’re going to run the four houses, it’s like you start spending some money.’”

The clincher, Peterson says, came from the wife: “She turns to me and she goes, ‘You know, the thing about 20’”—by this, she meant $20 million a year—“‘is 20 is only 10 after taxes.’ And everyone at the table is nodding.”

They have more in common with each other than with ordinary people in their own countries.  In other worlds, they are class conscious.

As Glenn Hutchins, co-founder of the private-equity firm Silver Lake, puts it, “A person in Africa who runs a big African bank and went to Harvard might have more in common with me than he does with his neighbors, and I could well share more overlapping concerns and experiences with him than with my neighbors.” The circles we move in, Hutchins explains, are defined by “interests” and “activities” rather than “geography”: “Beijing has a lot in common with New York, London, or Mumbai. You see the same people, you eat in the same restaurants, you stay in the same hotels. But most important, we are engaged as global citizens in crosscutting commercial, political, and social matters of common concern. We are much less place-based than we used to be.”

They have little sympathy for the American middle class.

The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”