September 12, 2008

With Enough Shovels

One theoretical approach to surviving a thermonuclear war, at least outside of the immediate blast zone (the "overpressure area"), is to construct a primitive bomb shelter as follows:  Dig a deep hole, as deep as your age and physical condition will allow you.  It needs to be large enough for you and for whomever else you wish to protect, but not so great in area that it cannot be completely covered by a pair of stout wooden doors.  You're going to be down there for a while so you might want to consider lining the floor and walls with planks so it will be homey.  The important part of the construction is the roof.  On top of the doors you need to pile three feet of earth; this is the key protection against radiation in the immediate aftermath of the explosion of hydrogen bombs.  You need to work out ventilation, because let's face it, this shelter is a little like burying yourself alive.  On the bright side, however, if you die in the shelter from radiation poisoning, you will have saved the trouble of your interment by others who will probably be in no shape to dispose of you.

These joyous thoughts occur to me in the aftermath of Sarah Palin's interview with Charlie Gibson, in which she joins with Senator McCain in seeing all us here Americans as "Georgians now."  How can I say this?  These people are freaking crazy.  I don't suppose that Sarah Palin, in the course of bouncing around among various third-rate colleges for six years more than 20 years ago, read much history of the First World War.  But the way all of those European countries got themselves sucked into a stupid and ruinous war was through the existence of a bunch of "mutual defense pacts," which have their modern cognate in NATO. Substitute President's Saakashvili's stupid provocation of Russia for the assassination of Archduke Ferdinand, and you get a sense of how these modern entanglements could spell doom.  George W. Bush wants every country he can find to be in NATO now; Poland, Georgia, maybe Russia itself. Maybe the new plan is to force Russia to attack Russia if one of our NATO allies goes to war with Russia.  That would make as much sense as stationing a battery of defense missiles in Poland as a first line of defense against Iranian missiles topped with nuclear warheads that don't exist.

This is getting extremely weird.  I'm beginning to wax nostalgic for George W. Bush.  Bush, in his naive, aw shucks way, at least wanted to get along with Vladimir Putin and to view Russia as a strategic ally.  I don't doubt that Putin was playing Bush a little, and if you have ever read any of the analyses of Russia written by the chess player Garry Kasparov, you would have little doubt about the kind of quasi-police state Putin is running over there with his United Russia party.  That, however, is not the point.  The point is simpler: why does the United States, and more particularly John McCain and his sidekick, Ma Barker Palin, want a new Cold War?

These are such dangerous games we're beginning to play.  McCain dispenses even with the pretense of coexisting peacefully with Russia.  He wants to kick Russia out of the G-8.  He wants to fast track Georgia into NATO so we'll be obligated by treaty to defend this little jerkwater hovel, Josef Stalin's home state, if Georgia decides to provoke another confrontation with Russia, as Georgia did in August.  Georgia cooperated with Bill Clinton, after all, in agreeing to construction of an oil pipeline between the Caspian and Black Seas, one that provides an alternative to the pipeline passing through Russia to the north.  This was Clinton's gambit in the neverending Great Game of access to oil in the Caucusus, which has prompted international conflict from Hitler to the present.  This lies at the root of everything going on over there.

South Ossetia, Abkhazia.  These are regions so vital to the U.S. that we should risk the destruction of human civilization to make sure they stay part of Georgia?  They're part of Georgia because Stalin, a Georgian, wanted them included in his home Soviet Republic.  So our defiant stand against Putin is to ensure that Stalin's legacy is honored and respected.  South Ossetia, not surprisingly, sees itself as naturally allied with North Ossetia, which is within Russia. Abkhazia is simply bitter because it knows its name is so stupid.

George W. Bush and Condoleezza Rice actually said, with a straight face in admonishing Russia, that "nations do not invade other countries to resolve differences in the 21st century."  As Mark Twain once said, some things are simply beyond satire.  Bush and Rice are "satire incarnate." Bush, sensing that something was amiss, later amended the Bush Doctrine 2.0 to state that countries don't invade "neighboring countries to resolve differences," and one could hear the collective sigh of relief in Canada and Mexico when he did so.  Probably the White House should post on its website the minimum distance from a nation's capital the invaded country must be to make invasion okay.  That could clear up a lot of confusion in Putin's mind, because he's hung up on our ongoing invasions of Afghanistan and Iraq.

McCain simply does not appear to understand the concept of a zero sum game.  We cannot actually go to war with Russia for any reason whatsoever, with the exception of a nuclear attack by Russia on the United States.  Bush showed good judgment in ranting and raving about Russia's retaliation against Georgia and doing nothing else, because nothing else can be done.  In agitating for war against Russia, Sarah Palin has already done an immense amount of damage to the foreign policy and relations of the United States.  There's been no general election, she's not in national office, and already she's messing us up.  You just don't make statements like that; no sane leader in American history has ever talked enthusiastically about a war with Russia in the post-World War II era.  Crazed militarists, like General Curtis LeMay (satirized unforgettably by George C. Scott in "Dr. Strangelove"), have talked about a nuclear war with Russia as if it's a legitimate subject for discussion, but anyone who wants to survive never talks that way.  Dick Cheney, even, doesn't talk about war with Russia.

Yet here we go again, we've got a half-insane militarist running for President for the Republicans, an elderly man of no intellectual distinction whatsoever, with recurring bouts of invasive melanoma, high blood pressure, high cholesterol, a doddering, confused manner suggestive of onrushing dementia, who is saber rattling about Russia; and he chooses as a running mate a nonentity with no background at all in foreign affairs, who's never been to Europe, Asia, South America or Africa, but who thinks she knows Russia because she can see it across the Bering Strait.  

Carl Sagan and others did some very valuable work concerning nuclear winter about twenty years ago when some of Reagan's advisers were suggesting we could survive a nuclear war with enough shovels to dig the rudimentary shelters described above.  Sagan's research indicated that a full-scale exchange of thermonuclear weapons between the superpowers would destroy the Earth's climate and most humans with it; there is no way to "confine" the damage done by H-bombs to the blast zone or the downwind victims of radioactive fall-out.  It's much, much worse than that.  More recent studies at the University of Colorado at Boulder led by Michael Mills have demonstrated that even a regional conflict between two countries such as Pakistan and India, which possess atom bombs, could spell the end of human civilization.  All that is necessary is for these countries to exchange 40 or 50 Hiroshima-sized A-bombs (10-15 kiloton range, cherry bombs by H-bomb standards) with cities as their targets.  The resulting soot plumes carried up into the troposphere would result in a 50% decrease in ozone levels in the Northern Latitudes (70% at higher latitudes).

So, knowing the answer before I ask the question: do these shitty students, McCain & Palin, know this?  Do they realize what they're playing with when they indulge themselves in all this uninformed macho posturing about Russia?  Does Bush realize how insane it is to station missile batteries in Poland, which reduce Russia's deterrent-reaction time from a few minutes to effectively zero if a missile is launched from Poland?  The Russians know.  They have told Poland that if they allow the placement of American missiles in Poland, the Russians will destroy them militarily.  And when you think about it, what choice would Russia have, regardless of your fond memories of the Cold War, when they were always bad and we were always good?  Would we allow the placement of "defensive" Russian missiles in Tijuana to protect their Venezuelan friend Chavez from North Korean missiles?

This is getting very, very serious.  

This is the way the world ends, 
this is the way the world ends, 
not with a bang but with an F in nuclear physics.

September 10, 2008

The Anti-Government Government and Its Fundie Enablers

There can be economies of scale even in blogging; for example, suppose I post a comment to Paul Krugman's column in the New York Times and then quote myself:

"Mr. Krugman's column strikes me as a very limited view of what Paulson's bailout is really all about. The reason the stockholders of Fannie & Freddie have been sacrificed is to conserve as much of the available assets of the two GSEs as possible in order to make timely payments to the foreign holders of the MBS bonds issued by these two companies under the implied assurance that the bonds were, in effect, backed by the full faith and credit of the USA, just as T-bills and bonds are. The Chinese in particular have voiced ominous warnings about the consequences of default. It was thus a no-brainer for the no-brain crowd of the Bush Administration. They've got to keep the house of cards intact at least through January 2009."

This post was recommended by 157 readers of the intelligent readership of the New York Times, more than anyone else on the first page of comments.  I didn't look farther than the first page to avoid finding a comment with a bigger readership.

Am I mad as hell and disinclined to take it anymore?  That's silly; we're all going to take a great deal more.  I console myself with the canard that the Bush Administration is the "no-brain" crowd; actually, they're smart as hell and they're going to take as much as they can on their way out the door.  What I hate to see is the house Liberal, Paul Krugman, running cover for the Bushies.  How can he write an entire column about the Paulson bailout of Fannie & Freddie and never once mention its true purpose?  Krugman is the kind of overrated analyst writing in mainstream publications who assuages the mostly unconscious and yet highly accurate suspicion among ordinary Americans that they're being taken for a royal ride by their own government.  The Treasury Department did not engineer a socialization of America's two biggest mortgage companies, which together hold about $5 trillion in mortgage and mortgage-related paper, so that Americans could once again "afford housing."  This idea is, you know, a sick joke.  In a sense, housing in America is becoming more affordable all the time.  The price declines in the real estate market are the largest since the Great Depresssion, and they're far from over.  Adjustable mortgage resets, declining wages and rising unemployment ensure that more and more foreclosed houses will continue to swamp the market at least through all of 2009.  Propping up Fannie & Freddie is not going to do anything for that problem.

Paul Krugman often has the right idea; he sees the Bush Administration, in line with every Republican Administration since Reagan, as the anti-government government.  It is government by sabotage, a species of "vandalism," as Thomas Frank writes in his brilliant new book on Conservative rule called "The Wrecking Crew." It's just that Krugman, as a writer for a mainstream publication, just can't hold that (accurate) view steady.  He wants to believe that even this crew in power occasionally does something which you might call "altruistic," that is, designed to help the majority of the great masses of people they govern.  But:  they never, ever do. That is never, ever the function of an oligarchic government.  Every move they make is designed to benefit the Big Business Class, period, end of story.  The purpose of the Medicare Prescription Bill?  To prevent mass purchases of pharmaceuticals by Medicare itself, thus driving the price of drugs down (it's in the law, folks; is that for you?)  The Bankruptcy Reform Bill?  To make it more difficult for ordinary Americans to discharge credit card debt in bankruptcy.  The bill was written by banking industry lobbyists, with the assistance of Joe Biden (thanks, Joe!  Well, corruption is also bipartisan).  FISA reform?  To exonerate Big Telecom from felonious spying at the behest of the government.  Bush's tax cuts?  Okay, he couldn't help it if it also reduced average income taxes a little, but it was a huge break for the plutocrat class because it capped the high marginal rate at 35% (down 4% from Clinton) and brought capital gains to 15%, allowing hedge fund managers like John Paulson, who earned $4 billion last year to pay at a lower "marginal" rate (he pays capital gains rates) than his secretary.

The mania for deregulation, privatization and the unleashing of greed on the broadest possible basis has led us to this pretty pass, where the entire economic structure of the United States is teetering on the brink of implosion.  While the Fundamentalist/Evangelical voting bloc is brought into the Republican tent with promises of a few baubles like outlawing abortion, stigmatizing gays in every way possible, making automatic weapons possession legal (if not mandatory) and installing Christianity as the State Religion (just as the Pilgrims wanted), that's not really what the Republicans are all about.  That's simply the bait-and-switch technique which Thomas Frank described in another brilliant book, "What's the Matter with Kansas?"  Their agenda is simpler: free markets completely untethered from any government regulation.

The Republicans share one habit of thinking in common with their Fundie enablers; a tendency toward what "secularists" call a priori reasoning.  It works like this: my theory is correct.  Now here is a real world problem.  It will be solved by means of my theory.  What is my theory?  My theory is that the all-seeing, all-knowing "invisible hand of the market" routs out all inefficiencies, makes everything transparent and results in a completely fair and level playing field.  That this is complete and utter nonsense does not matter.  Grover Norquist, Tom DeLay, Howard Phillips, Jack Abramoff, John McCain, George W. Bush, they all believe it to the depth of their beings.  And the Fundies have kept them in power for 20 or the last 28 years, long enough to change everything about our government and regulatory agencies.  The Bush Administration did not even believe that disaster response should be "regulated:" it should be left to the open market to decide whether saving New Orleans was or was not a sound business decision.  I guess it wasn't.

Now John McCain adds a secessionist, inexperienced, and vindictive person to his ticket, someone who believes that polar bears are not endangered in her state but that dinosaurs walked around in Alaska as recently as 5,000 years ago, and what happens?  McCain gets a 15 point bounce in the "Southern tier," those states that have always been part of Nixon's "Southern Strategy."  What used to work down South was anti-black rabble rousing.  Now the appeal is softer and gentler: a return to a Golden Era before the "humanist" predations of abortion and gay rights turned our country into Sodom.

John McCain's solution to the Fannie & Freddie crisis is to pump them up with taxpayer money and then re-privatize them.  (Palin thought they were public entities all along; oh man, we are in such trouble; between a Republican who thinks Iraq and Afghanistan are contiguous countries and one who believes Fannie & Freddie are public agencies, we're never going to make it.) Privatized gain, socialized loss.  See how it works?  

Is there a unifying theme to today's screed?  Maybe this: it's worse than you think.

September 09, 2008

This Year's Election in Flohiovaynia

One of the funnier things Dmitry Orlov wrote in "Reinventing Collapse" was his take on the new American electoral innovation; the two Center-Right Parties nominate candidates who finish in a virtual dead heat and the winner is selected out of "statistical noise."  It does seem, after you factor in all the usual Republican election cheating, that about the same number of people vote for the Republican as for the Democrat.  And if the vote is especially close in one of three "battleground" states, then selection of a President can wind up the result of a rounding error.

Those three states, of course, are Florida, Ohio and Pennsylvania.  Florida decided 2000 (maybe), Ohio decided 2004 (maybe).  While both campaigns this year are excitedly talking about all the new states "in play," I doubt this is really the case.  This year will be another Flohiovaynia election.  Pennhiofla?  Hiopennorida?  Call this three-headed monster what you want, Flohiovaynia holds the key to our next President.  Barack isn't going to win Virginia or South Dakota; where does he think he is, Germany?  He isn't going to win West Virginia or Kentucky or South Carolina.  I do note with a mordant amusement that in the worldwide polls, among all other industrialized countries, Obama is the overwhelming favorite to win, by a factor of 4 to 1.  Just one of those things (racism) which makes this country so "exceptional," I guess.

If I don't vote in November, it will make no difference.  My state will be carried by Barack by 10+ points.  The job of us here progressives in this state is to give money to Barry and to do "campaign work."  Our votes are superfluous beyond a certain bare majority.  And our votes are quite dilute compared to, say, Wyoming or Alaska.  My vote counts about 33% as much as one of Governor Sarah Palin's subjects, all because we "decided" to freeze the number of elected Representatives from all states at 435, and those barren stretches of real estate in Montana, Wyoming, South Dakota and Alaska are entitled to a statutory minimum of 3 electoral votes each.  Simple math.  Alaska, 600,000 citizens, 3 votes = 200,000 people per vote.  California, 33 million people, 55 votes, = 600,000 people per vote.  Are people in Alaska really three times smarter than I am and ought to be given a weighted vote?  So it would seem.  Maybe what would make more sense is simply to disenfranchise enough Californians so that we are represented at the 200,000 to 1 level.  So let's get those Republican caging lists to work here and get 22,000,000 Californians off the voting rolls.  You know they want to, anyway.  Or, to be more "democratic," let's select a representative 11,000,000 Californians to do our voting each time around who conform to the state's voting profile.  That way I'd only have to vote for President once every twelve years.  And maybe I could "pair" my vote with some Republican somewhere, cancelling each other out (every other time, say), and I could vote once every 24 years.  If we think this system through, we could set it up so each American citizen of a populous state with a dilute vote could vote once in a lifetime.

Those Founding Fathers - geniuses.  Nah, it's not their fault.  They had 13 states, remember?  They were trying to balance the few powerful states against the relatively weaker majority.  They could not have foreseen that in 200 years, Flohiovaynia would be choosing the President every four years.  Only Pennsylvania was even a state at the beginning.  And guess what?  It would take a Constitutional amendment to change the Electoral College system.  Requiring three-fourths approval of all 50 states.  What do you suppose the odds are that all those over-represented states are going to willingly give up their advantages in the ratification process? What do you suppose the odds are such a bill would ever get out of committee?

No, we're stuck with the Flohiovaynia system.  There are options, however, if you want your vote to mean something.  You could move to one of those three states.  The other possibility for reform is if that political party that Todd Palin belonged to (and to which his heart no doubt still is pledged), the Alaskan Independence Party, succeeds in freeing itself from the Union.  I noted that the AIP (which has even elected a governor, and that governor served as Sarah Palin's campaign manager - think about that - a secessionist Vice President) has affiliations with other secessionist parties in other states.  I had no idea, until John McCain selected a secessionist as his running mate, that secessionist parties were even legal in the United States.  Goes to show - some people are always ahead of the curve.  But you know  -- is that something that we 22 million Californians who get to take this year off could work on ourselves?

September 07, 2008

Determining that Government is Too Big to Fail, Government Takes Over Government

The struggling mortgage-purchasing giants, Fannie Mae and Freddie Mac, have been placed in a financial "conservatorship," the maximally-stressed out Secretary of the Treasury Henry Paulson announced on Sunday. A conservatorship is the sort of legal vehicle you might consider for your failing Aunt Tilly when she acquires the distressing habit of dispensing thousand dollar checks to complete strangers. The gummed-up lending market in the United States is in desperate need of some fiscal WD-40, and so the Treasury Department, as in the case of Bear Stearns, is riding to the rescue with its usual implement of resuscitation, more money. Where does all the money come from? From the usual source: the printing press at the Treasury Department.

The problem, in a way, gets simpler and simpler as we go. The United States does not actually have any "money," as we used to understand the term. I am not talking about going off the gold standard, as Nixon decided to do a long time ago when we moved to the present system of "fiat currency." What we have is an international agreement among the nations of the world that the dollar, for now, is the agreed marker for how much money is available in the world. Most commodities, most notably oil, are denominated in dollars. This is one of the major reasons, in fact, that the price of oil moves inversely to the value of the dollar. The lower price of gasoline at present reflects a relative "strengthening" of the dollar against foreign currencies, but in part this is because the economic woes of the United States are dragging the rest of the world down with it, and all of this is particularly attributable to the flagging fortunes of that mightiest of all econ-drivers, the American Consumer.

To keep the consumer economy going in the first eight years of this millenium, the U.S. came up with a brilliant scheme for breathing new life into its profligate consumption. The hard assets, primarily the housing stock of America, were used as collateral for recycled dollars collected from around the world and the money thus raised was used to keep the consumer economy going despite the declining wages of the American worker. The collateral instruments, the mortgages, were sold in the secondary market to numerous purchasers, but especially to Fannie & Freddie who together are involved in about 70% of the secondary mortgage market in the United States. F&F bundled the mortgages into mortgage backed securities (MBS) and sold them domestically and around the world.

While Fannie & Freddie are only "quasi" public entities, the quasi-CEOs of these outfits were not reticent about assuring foreign purchasers that MBS bonds purchased, inter alia, by the Chinese, Japanese, Cayman Islanders and others were really, when you think about it, a whole lot like Treasury bonds issued by the Unites States government, except, you know, they're not. In reliance on this fraud, our most important creditors went all in for this toxic crud. And so, when it came to pass that a great number of the MBS bonds were collateralized by houses whose former owners now live in tent cities in Ontario, California and other scenic locales, the international merde hit the ventilateur.

Henry Paulson's anal pucker factor, which had been hovering around 9.7 (10 is slammed completely shut) suddenly leapt to an untenable 9.9. We have relied for a very long time on the kindness of strangers, and if those foreign creditors, who hold about $1.3 trillion worth of the MBS (Mortgaged Bullshit), were to suddenly cast a gimlet eye on the Treasury securities they also hold, and were to logically decide that a country which runs half-trillion dollar yearly deficits, and which owes itself and others $10 trillion, and borrows money in order to buy oil and fund wars of aggression to ensure access to oil, might not be actually good for all that U.S. paper they were holding; well, it could start to sound something like this:

"Our new Chinese creditors have demanded their first payment. Several times in the last week, Chinese officials have stated in no unceertain terms that they would be VERY UNHAPPY if their Fannie and Freddie bonds weren't honored in full. Forget the Fed: US economic conditions are now dictated by the People's Bank of China." From Economic Populist.

What form might this unhappiness take? It might take the form of economic catastrophe for the United States if it dispelled the group hallucination on which American prosperity now depends; to wit, the consensus delusion that running our printing press entitles us to determine how wealthy we are. So Paulson really had no choice. It was obvious the "drunk" (Bush's term) execs at Fannie & Fred had managed the companies off a cliff, but their demise spelled huge trouble for the government's own viability. So, yet another no-brainer for Paulson. The Feds are calling the shots from here on out, with the "taxpayers" left to inject whatever operating capital the GSEs will need to service their foreign and other debts.

Of course, the idea of the "taxpayers" actually paying for this latest emergency relief is yet another fantasy. The Feds may as well pile on as much debt as they can get away with at this point, because the truth is we're not good for any of it. The taxpayers don't have that kind of money. The idea of enforcing some sort of financial discipline through the principle of "moral hazard" disappeared about the time that Clinton's Treasury Secretary, Robert Rubin, engineered the bailout of Long-Term Capital Management. It's now standard operating procedure for the federal government to take over one huge financial company after another, as we gradually socialize the financial structure of the United States. It is the natural, inescapable action-reaction sequence after all the years of mindless, Ayn Rand-inspired, deregulated greed. But really, Paulson is just kicking the problem down the road. If you don't have the money, you don't have the money. He's staving off the inevitable until, let's see, about November 5, 2008.

Which might be the biggest, ironical joke of all. Paulson might help McCain get elected, and then this addled, goofy, querulous, forgetful shmegege can inherit the job of straightening out - what would you call it? - the financial meltdown of the United States economy. It would almost be worth it just to see that.