What does a teacher make? Quite a lot!

Hat tip to Taylor Mali and ZEN PENCILS.

War and peace: Links & notes 11/29/13

‘Aleppo is nothing but hunger and Islam’ by Francesa Borri in The Guardian.

I’m glad that President Obama decided against overt U.S. intervention in the Syrian conflict, but I admit I don’t know what to do to help the poor people of Syria.  It seems as if the only alternatives are continued rule by a ruthless and brutal hereditary dictator, and rule by local militias and warlords.

The United States government, for all our high-tech flying killer drones and all our highly-trained special operations forces, does not have the capability to keep the peace in a country torn by civil war.  Arming one or more of the fighting factions makes things worse.  Bombarding the country makes things worse.  Helping victims is good to do, but it doesn’t solve the problem.  Maybe somebody who knows more about Syria than I do sees an answer.  I don’t see any.

Hollywood ‘Fight Club’ producer was Israeli spy with nuclear script by RT News.   Hat tip to O.

Arnon Milchan, producer of Hollywood movies such as Pretty Woman, Fight Club and LA Confidential, gave an interview about his earlier life as an Israeli secret agent in the 1970s who obtained materials and equipment for Israel’s secret nuclear weapons program.  This helps me understand the Israeli government’s fear of Iran’s nuclear program.  If Israel could develop nuclear weapons without the world’s knowledge, why couldn’t Iran?

‘Why can’t we all get along?’

Maybe we can.

Click on KKK Member Walks Up to a Black Musician in a Bar – But It’s Not a Joke and What Happened Next Will Astound You for a remarkable report by Rebecca Sevastio for the Las Vegas Guardian-Express.

Black Friday is crowding out Thanksgiving holiday

Black Friday is an economic arms race that benefits nobody—neither retailers nor shoppers.  Now, as the chart above shows, it is crowding out the traditional American Thanksgiving holiday.

Historically the big retail chain stores have opened earlier and earlier the day after Thanksgiving so as to gain a competitive advantage over their rivals.   Christmas shoppers stand in line before the store opening to gain a competitive advantage in finding bargains.  I don’t in the least criticize people with tight budgets for doing this.

Retailers, shoppers and store employees would all be better off if there was a law, or a legal means of reaching a mutual agreement, for retail chains to close early on Thanksgiving and open no earlier than 8 a.m. the day after.   Meanwhile those of us Americans who can afford to do so can vote with our dollars for companies such as Costco, Nordstrom, TJ Maxx and BJ’s Wholesale Club that allow their employees to enjoy a Thanksgiving holiday, even if they give up some sales dollars to do so.

Things to be thankful for…

… all of which apply to me, through no merit of my own.

Hat tip to quickmeme.

Where was President Obama’s due diligence?

Not long after I voted for Barack Obama in 2008, I came to realize that his priorities were different from what I thought they were.  And I soon saw that his health reform plan was deeply flawed and hard to implement.  But I nevert, until now, thought that he was incompetent.

The Affordable Care Act is President Obama’s signature domestic achievement.  Compared to Medicare for all (single payer) or his own proposal for a public option, it is hugely complicated.  Moreover there are political enemies in state governments that want to make it fail, and special interests in the pharmaceutical and health insurance industries that want to milk it for their own benefit.

Under these circumstances, wouldn’t you think that he look for the smartest and most capable information technology manager he could find and give that person complete authority?  With his connections in Silicon Valley industry, he wouldn’t have had trouble finding such a person.  But evidently not.

President Obama’s right-wing opponents accuse him of creating “czars” to oversee government programs, but this was a case where a “czar” was necessary and sadly lacking.

And wouldn’t you think that he would check on the progress of the program early and often? The President, after issuing a non-apology apology, said, “I was not informed directly that the web site would not be working the way it was supposed to.”  This is a statement worthy of George W. Bush.  Why was he not informed.

During the George W. Bush administration, I blamed President Bush, Vice President Dick Cheney and Karl Rove for mistaking campaigning for governing, and public opinion polls for reality.  But when individuals so different in background and personality as George W. Bush and Barack Obama exhibit the same flaws, I have to think there is something deeply wrong with the U.S. political culture that goes beyond the character traits of individuals.

Wal-mart as a Third World nation

In its size and structure, Wal-mart is like certain Third World nations—a tiny group of privileged people on top, supported by a pyramid of hard-working low-paid workers below.

Hat tip to Mike Connelly for the chart below.  It’s from two years ago, but still basically true.

American exceptionalism: Loyalty to a Constitution

An American patriot is one who will uphold, protect and defend the Constitution of the United States against all enemies, foreign and domestic.

This is in the oath sworn by members of the armed forces when they are inducted, the oath sworn by federal officers, including the President of the United States, when they take office, and the oath sworn by immigrants when they are naturalized as citizens.

Our form of patriotism does not consist of loyalty to a king, or a dictator, or a ruling political party, nor to a race, religion or cultural tradition.  It is rather loyalty to a set of rules for living together, governing ourselves and respecting each others’ rights.

This is why the name of the Department of Homeland Security seems vaguely wrong to many of us.   The word “homeland” expresses the European concept of nationality—that a nation consists of people speaking the same language, living in the same place that their ancestors have lived for centuries.   North America is the homeland of the American Indians.  All the rest of us have come from a homeland somewhere else.

American constitutional patriotism is better than European blood-and-soil nationalism.  Making race, language and ethnicity the basis of national identity is very natural, but it has led to bloody wars, ethnic cleansings and second-class citizenship.

You can be born anywhere in the world and think of becoming an American.  I don’t think anyone thinks this way of becoming German or Japanese or any of the other nationalities defined by ethnicity.

We Americans have had and still have a lot of problems with immigration, but I think we do better than most nations because we make loyalty to the Constitution the basis of patriotism.   I have a good friend born in Uzbekistan who is a naturalized American citizen.   She is as good an American as I am, and as good an American as my immigrant ancestor, Johann Ebersole, who served in the Continental Army under George Washington.

Filibusters and our undemocratic Senate

The one provision of the U.S. Constitution that cannot be amended is equal representation for the states in the Senate (see Article V).

This guarantee was the price of having all 13 original states agree to a Constitution in the first place.  So we’re stuck with the theoretical possibility that Senators representing 51 states with 18 percent of the population could cast a majority vote.

This doesn’t matter much with enactment of laws.  For a bill to become a law, it must also be approved by the House of Representatives, which is chosen on a population basis, then signed into law by the President or passed over his veto by a super-majority.   But to appoint judges, ambassadors and other federal officers, the President only needs the advice and consent of the Senate.

Most democratic nations have parliamentary forms of government, in which the parliamentary majority chooses the Prime Minister and routinely approves the PM’s proposed laws and appointments.  If the executive and the legislature disagree on any important measure, the people get to vote on who is right.

These systems work well most of the time.  When they don’t work, it isn’t because of the tyranny of a majority, but because there are multiple parties than can’t work together.  I don’t think the people of any democratic country would want to create the equivalent of the U.S. Senate.

We Americans don’t have a choice because the principle of state sovereignty is baked into our Constitution.   I think there is a case to be made for our exceptional system of checks and balances, but I don’t think we need to carry it beyond what our Constitution requires.

The passing scene: Notes & links 11/26/13

Silicon Chasm: the class divide on America’s cutting edge by Charlotte Allen for The Weekly Standard.

Pundits such as Richard Florida say that if a community caters to the “creative class,” there will be business innovations that expand the economy and benefit the whole community.   Charlotte Allen’s tour of Silicon Valley indicates that things don’t necessarily work out that way.

When Product Features Disappear: Apple, Amazon and Tesla and the Troubled Future of 21st Century Consumers by Steve Blank.

One of the great innovations of the 21st century is software-based products which you don’t need to maintain yourself, and which suppliers automatically upgrade without you having to go to the store.  But Steve Bank points out that the downside is that (1) the product you bought today may not be the product you have later, (2) manufacturers can, and do, downgrade your product as well as upgrade it, and (3) you have no legal protection.

“Blood Avocados”: the Dark Side of Your Guacamole by Jan-Albert Hootsen for the Vocativ news site.

Alcohol prohibition in the United States in the 1920s fueled a big increase in organized crime.  But when Prohibition ended, the crime syndicates didn’t go away.  The gangsters found new forms of enterprise.  Drug prohibition in the United States has fueled a big increase in organized crime in Mexico, Colombia and other countries.  But drug legalization won’t make those crime syndicates go away.  Jan-Albert Hootsen wrote about how one Mexican drug syndicate is taking over the avocado industry.

Coal Politics: Big Win in a Small Town by Lou Dubose for the Washington Spectator.

American exceptionalism: Capitalism as freedom

One of the things that is exceptional about the United States is that, unlike people in all other countries I know about, we Americans associate capitalism with freedom.

That is not to say Americans are the only people who think that way—Margaret Thatcher in 1980s Britain and Ludwig Erhard in postwar West Germany were as strong believers in capitalism as any American ever was.  But the United States is the only country in which such beliefs go unchallenged.

John Lauritz Larson’s THE MARKET REVOLUTION IN AMERICA: Liberty, Ambition and the Eclipse of the Common Good, which I read on the recommendation of my friend Craig Hanyan, attempts to explain why.

Most of the peoples of the world define capitalism as Karl Marx did—a system ruled by the holders of financial assets, in contrast to older systems ruled by landowning aristocrats and Oriental despots and a hoped-for future system ruled by workers.

Americans think of capitalism as Adam Smith’s “system of natural liberty,” in which each person is free to pursue their own interests in their own way, subject only to “the law of justice.”  I was brought up to believe in this and I still do, although my idea of the “law of justice” is broader than Adam Smith’s probably was.

Larson’s argument is that the United States between the Revolution and the Civil War was the world’s greatest example of Adam Smith’s ideas in practice.   The system of natural liberty didn’t apply to black people or to native Americans,  but white American citizens, especially those in the North, experienced a degree of freedom and rising prosperity that was a wonder of the world.

The passing scene: Links 11/25/13

Switzerland votes against a cap on executive pay by The Guardian.

Voters in Switzerland voted, by a 2 to 1 ratio, to reject a proposed law that would have limited executive pay in a corporation to 12 times that of the lowest-paid employee.

Foxconn invests $40M in Pennsylvania to tap research, talent by Michael Kan for Computerworld.

China-based Foxconn, the world’s largest manufacturing employer, plans operations in the United States.   Presumably, there won’t be nets around the buildings to catch suicidal employees.

Toxic Lakes From Tar-Sands Projects Planned for Alberta by Jeremy Van Loon for Bloomberg News.

Some day the bitumen in Alberta will be exhausted, but the toxic wastes in artificial lakes will be there indefinitely.

 

Pigs, antibiotics and the risk of deadly infections

A century ago childbirth, surgery and even minor scratches were deadly risks because of the possibility of infection.  We Americans have no living memory of this because of the miracle of antibiotics.  But our margin of safety is disappearing because of the rise of antibiotics-resistant bacteria.

Drug company research on antibiotics is diminishing for this very reason.  As the drugs become less effective, they become less profitable.  This is a good reason to step up research by the National Institutes of Health on antibiotics and on alternatives to antibiotics (such as phages, viruses that attack bacteria).

Pigs in a factory farm. Credit: Farm Sanctuary

An estimated 80 percent of antibiotics administered in the United States are to animals rather than human beings, most of them to healthy animals to promote growth and as a precaution.  It would be possible to slow down evolution of drug-resistant bacteria by using alternative methods of protecting meat animals from disease, such as raising them in less crowded conditions and weaning them at a later date when they’ve built up natural immunities.

The National Pork Producers Council estimated in 2002 that such practices applied to pigs would increase the cost of pork production by $4.50 a pig.  This is trivial in terms of what I pay for a pork barbecue sandwich, but it might be decisive in terms of a farmer’s profit margins, because processors would not offer a farmer who shunned antibiotics a better price than one who used them.

It is interesting to me that Denmark has addressed this problem more decisively and effectively than we Americans have.  What gives Denmark such a good political culture when compared to the United States?

Putin and Obama on the world stage

President Vladimir Putin’s diplomacy has increased Russia’s influence in the Middle East and beyond.  He made Russia the go-to broker for peace in Syria and maybe also in Iran, while increasing Russia’s influence in Eygpt and Turkey and (outside the region) binding Ukraine to Russia instead of the European Union.

In contrast to the hypocritical idealism of George W. Bush and Barack Obama, Putin pursues a frankly Machiavellian policy of self-interest.  He does not seek to promote regime change.  He accepts any existing government as legitimate, no matter what its internal policies.  This is less threatening than the policy of  the United States, which in the past decade became the Soviet-style revolutionary power, invading and subverting other countries in quest of world domination.

President Barack Obama is the heir to this foreign policy, which has proven itself bankrupt and left the United States isolated in the world.   The elder George H.W. Bush was able to marshal the United States and virtually the whole world in the first Gulf War, driving Iraqi troops out of Kuwait.  The younger George W.Bush got substantial international support for the invasions of Afghanistan and Iraq.  But the world’s willingness to get behind the  United States has been exhausted, as has the willingness of the American people to support military action.

President Obama deserves credit for recognizing reality and for attempting to make peace with Iran.  His success is not a foregone conclusion.  He faces strong opposition from war hawks of both parties in the U.S. Congress, and from Israel and Saudi Arabia.  The Iranian government may not agree to his terms.  This would leave the United States with the worst possible outcome—alienated from its old allies, Israel, Saudi Arabia and the Gulf emirates, and unable to make Iran a new ally.

Then again, what benefit is there for the American people in American dominance of the Middle East?  It doesn’t lower the price of gasoline at the pump.  It doesn’t guarantee U.S. access to oil.  Our whole policy for the past 20 years has been to try to prevent countries such as Iraq (from 1991 to 2003) and Iran (from 1979 to the present) from selling their oil.

The Russian people might ask the same question about their government’s policy.  Vladimir Putin has made Russia strong militarily and diplomatically, and crushed his domestic opposition with an iron fist, but his policies do not help to restore Russia to the ranks of great industrial nations.

Russia is not an exporter of computers or automobiles; it is not an exporter of textiles or electronics components; it is an exporter of energy derived from fossil fuels.  Its future prosperity depends on developing the oil and gas of a melting Arctic and dominating the former Soviet republics in Central Asia.  Unless something changes, Russia’s destiny is to become a resource colony of China.

Aristotle on virtue and happiness

Aristotle

It is our choice of good and evil that determines our character, not our opinions about good and evil.
 
We are what we repeatedly do.  Excellence therefore is not an act but a habit.

Every decision we make, and every action we do, has an effect on the kind of people that we are.  The wise are mindful of what they do.  Otherwise they wind up being the kind of people they don’t like.

Aristotle pointed out that all other things being equal, people of strong moral character are happier than people of bad moral character.  As I look around, this seems obviously true.  Good character is not a guarantee of happiness.  But if you do have an inner moral compass, you will not be swept away by good fortune and will be less likely to be crushed by bad fortune.  You won’t have to make excuses to yourself for what you do.  Your self-esteem won’t be based on anything that somebody has the power to take away from you.  You can look back on your life in old age with justified satisfaction.

This isn’t the only reason for trying to lead an upright life, but I think it is a good one.

A 50th anniversary docu-drama on Doctor Who

Once upon a time I was a regular watcher of the Doctor Who TV program.  I was never a hard-core fan and I lost interest after the Tom Baker era.  But I was interested in this trailer for a BBC docu-drama about the show’s 1963 origins.

Click on BBC Two – An Adventure in Space and Time – Clips for more.

Hat tip to Avedon’s Sideshow.

A California red-sided garter snake

This snake is so beautiful it looks artificial.

I like snakes.  They eat pests and are mostly harmless if you don’t bother them.

Hat tip to naked capitalism, which publishes pictures like this as its “antidote du jour” at the end of its daily Links post.

Why would somebody do this to themselves?

I find these images disturbing but fascinating.

Who benefits from ultra-low interest rates?

Governments, large corporations and American banks have been the main beneficiaries of lower interest rates, according to a study by McKinsey Global Research.  The results are shown in this chart,

To understand the chart, you have to keep in mind the meaning of the word “net”.  The U.S. government had a “net” improvement in interest income in 2012 over 2007, but what that meant was that it was paying out $900 billion less in interest at the end of the period.   Large corporations and governments in other countries also lowered their borrowing costs, and this constituted a “net” gain for them over the five-year period.

Banks in the U.K. and continental Europe were hurt, but U.S. banks gained because they increased the spread between their borrowing costs and the interest rates they charged.

Families with savings were hurt.  Interest on my own bank account is virtually zero.  Pension funds took a hit.  So did insurance companies; a lot of their income comes from investing the money paid in premiums until it has to be paid out in claims.

The McKinsey analysts, unlike me, don’t think that ultra-low interest rates are driving people into the stock market.  But they didn’t see any signs of increased business investment or economic activity as a result of low rates.  The economy is stuck in low gear, and artificially low interest rates haven’t shifted this.

Border Patrol exception to the 4th Amendment

The Fourth Amendment to the U.S. Constitution reads as follows:

The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be searched.

U.S. courts have held that this does not forbid the U.S. Border Patrol to inspect belongings of people entering and exiting the United States, even though they don’t have probable cause to think such persons have committed a crime.

However, the Border Patrol’s jurisdiction over “border areas” was expanded some years back to cover everything within 100 air miles of a U.S. border.  The border areas are shown in the map below.

As the map shows, Border Patrol jurisdiction covers the entire populations of Michigan, Florida, New Jersey, Delaware, all of New England except a tiny sliver of Vermont, and most of New York, Pennsylvania and Virginia.

What makes this worse is the common attitude in the Border Patrol is that “contempt of cop” is a crime, and insistence on Constitutional rights is obstruction of justice.  The video above of a young engineer’s experience with the Border Patrol shows this, and it is not the worst example I have ever heard.

Winners and losers in the Bernanke era

One way to see who’s winning and losing in the current economy is to track the stock prices of Macy’s, Kohl’s and J.C. Penney, retailers who serve the middle class, with Tiffany, Coach and LVMH, retailers who deal in luxury goods.

Click on Sober Look: 5 Years of QE and the distributional effects for an argument that the Federal Reserve’s policy of quantitative easing (buying up bad investments of the big banks), together with the absence of a U.S. jobs program, helps the elite at the expense of the public.

What’s the problem? Food for thought 11/22/13

The Skunk Party Manifesto by Yves Smith.

Software Engineering in Crisis: Healthcare.gov Is Just the Dead Canary by Bob Goodwin for naked capitalism.

Does Your Job Create Real Value? by Noah Smith for The Week.

Don Jon: how porn is rewiring our brains by Nisha Lilia Diu for The Telegraph.

The Internet Ideology: Why We Are Allowed to Hate Silicon Valley by Evgeny Morozov for the Frankfurter Allgemeine Zeitung.

All Can Be Lost: The Risk of Putting Our Knowledge in the Hands of Machines by Nicholas Carr for The Atlantic.

Democracy won’t save us, free enterprise won’t save us, and technological progress won’t save us without a strong moral foundation for society.

The passing scene: Headlines & links 11/22/13

China Tests First Combat Stealth Drone by Agence France Presse.

PROC Says No Longer in China’s Interest to Increase Reserves by Bloomberg News.

The Chinese government is developing its military technology and increasing military spending.  At the same time the Peoples Bank of China announced it will no longer increase its dollar reserves, which was done to hold down the exchange rate for the Chinese yuan.  This means U.S. imports from China will cost more in dollars.  This may mean that China intends to reduce its holdings in U.S. Treasury Bonds, since their value would be less in terms of Chinese money.  China is the largest foreign holder of U.S. debt.

Turkey pushes crossroads politics by Pepe Escobar for Asia Times.

Prime Minister Recep Tayyip Erdogan wants to make Turkey the crossroads between Europe and Asia for oil and gas pipelines.  This means keeping in the good graces of the governments of Iran and Iraq.

Ukraine Won’t Sign EU Agreement by Michael Kelley for Business Insider.

By rejecting an invitation to join the European Union and instead joining a customs union with Russia, Belarus and Kazakhstan, the government of Ukraine has decided to align itself with Russia rather than the West.

Japan’s Losing Battle Against ‘Goldman Sachs With Guns’ by Willliam Pesek for Bloomberg News.  Hat tip to naked capitalism.

The Yakuza, Japan’s crime syndicate, operates opening and controls a large and growing part of the Japanese economy.

UN surveillance resolution goes ahead despite attempts to dilute language by Ewen MacAskill and James Ball for The Guardian.

The United Nations General Assembly is ready to go ahead with a strong resolution condemning unlawful and arbitrary surveillance and asserting a basic right of privacy, despite efforts by the U.S., British and Australian delegations to water it down.  Those three nations, plus Canada and New Zealand, are part of the “five eyes” to share surveillance data.

Hamid Karzai urges Afghans to let US forces stay another decade by Emma Graham-Harrison for The Guardian.

United States gives Afghanistan year-end deadline for crucial security deal by Hamid Shalizi and Jessica Donati for Reuters.  Hat tip to naked capitalism.

As the old proverb goes, there’s many a slip twixt the cup and the lip.

The Pilgrim Thanksgiving story…with a twist

Click on Tom the Dancing Bug for more Ruben Bolling cartoons.

Hat tip to Bill Elwell.

Too big to bail? the new financial bubble

When the French Bourbon monarchs were restored to power after the defeat of Napoleon, it was said that they had learned nothing and forgotten nothing.  The same is true of the half dozen biggest U.S. banks after the financial crisis.  They are busy doing the same things that led to the crisis in the first place.

Blogger Michael Snyder quoted the following figures from the most recent report of the Office of the Comptroller of the Currency.  The figures show the big banks’ investments in derivatives, which are investments not backed by any asset—in short, they are not investments at all, but gamblers’ bets on the future direction of the economy.  If the banks bet wrong, they crash, and if they crash, they bring down a large part of the U.S. economy with them.

JPMorgan Chase

Total Assets: $1,948,150,000,000 (just over 1.9 trillion dollars)

Total Exposure To Derivatives: $70,287,894,000,000 (more than 70 trillion dollars)

Citibank

Total Assets: $1,306,258,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $58,471,038,000,000 (more than 58 trillion dollars)

Bank Of America

Total Assets: $1,458,091,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $44,543,003,000,000 (more than 44 trillion dollars)

Goldman Sachs

Total Assets: $113,743,000,000 (a bit more than 113 billion dollars – yes, you read that correctly)

Total Exposure To Derivatives: $42,251,600,000,000 (more than 42 trillion dollars)

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 371 times greater than their total assets.

via Michael Snyder.

The six largest banks control two-thirds of U.S. financial assets.  The five largest originate 42 percent of loans in the United States.  The four largest employ a combined 1 million people.  If these banks fail, it is not just their executives who will suffer (actually, the executives won’t suffer at all).

The Federal Reserve Board is trying to keep the economy afloat by keeping the big banks afloat, through its policy of Quantitative Easing.  It issues money to buy up the big banks’ bad investments prior to the previous crash, but without doing anything to stop them from setting up the same conditions again.

How much better it would have been to finance the rebuilding of crumbling bridges and dams, water and sewerage systems and other public works!