October 29, 2008

The Nouri Chronicles: Let's Take the Sofa & Go Home

An international diplomat once described concluding a deal with the Russians as "first signing the agreement, then beginning negotiations."  There are always, of course, cultural differences about the art of the deal.  We tend to borrow British ideas, whether we always realize it or not.  That stiff upper lip, honorable forthrightness, blah blah.  We assume that's how everyone either does it or should do it.  Not really so.  

 So the U.S. is deadlocked in its back-and-forth with the Iraqi government over the Status of Forces Agreement, a continuing drama which I find peculiarly fascinating, probably because I've spent most of my professional life cutting deals of one kind or another.  I've thought from the beginning that the American team was in over its head.  Only recently have they begun to play hardball with the Iraqis -- sign or we pull out and leave you to your fate.  

 Of course, that's the last thing the Bush Administration really wants to do.  They've been forced into it because they've been outmaneuvered by the Iraqis.  The Iraqi negotiating team kept a close eye on the leverage points.  They knew that Bush would see a pullout from Iraq as an ignominious defeat, especially because of the relevance of the UN Mandate.  When the Mandate expires on December 31, an extension would have to be approved by Vladimir Putin, and Bush is not going to go hat-in-hand to Pooty-Poot and ask for a favor.  They also know Bush has virtually no credibility at home - even with this anemic Congress, his ranting and raving is not going to get him anywhere with an unpopular war, the way it used to do.  The clock favors the Iraqis in myriad ways: the UN Mandate runs out, Bush's tenure in office runs out.  Where's the rush?  


"We obviously want to be helpful and constructive without undermining basic principles," Bush said in the Oval Office during a meeting with Massoud Barzani, president of the semiautonomous Kurdish region in northern Iraq. "I remain very open and confident that the SOFA will get passed," he added, using the acronym for Status of Forces Agreement...Dabbagh said other amendments sought by the Iraqis include a clear definition of "off-duty" when cases arise involving crimes committed away from U.S. bases. The Iraqis also want to inspect all U.S. military shipments entering or leaving Iraq.

That's the kind of word usage I'm going to miss so much when Bush is gone.  He remains "very open and confident" about the SOFA.  What does it mean to be "open and confident?"  "Open" in that sentence doesn't really mean anything, does it?  And yet there the word is, a completely meaningless word uttered by the President of the United States of America about his signature project while in office.  Did he hear "hopeful" in his head and it came out "open?"  Did Bush realize that saying one is "hopeful and confident" sounds a little internally inconsistent and thus switched to a meaningless word at the last second to avoid saying something that would have sounded even sillier?  Like so much Bush has said over the years, it really doesn't matter at this point. He just uses words very strangely.

Meanwhile, there are those crafty Iraqis again, drilling in on this "off duty" idea.  When is a U.S. GI really "off duty" so the mullahs can try him for a "serious crime?"  Look, Condi: will you get serious for a minute?  Let's not sign a deal with the Iraqis which exposes American soldiers to the whims of Shariya law, okay?  This whole dumb idea has gone on long enough.  We have asked enough of these men and women stranded in the desert so far from home.  They are not going to be tried in an Iraqi court for anything, and if that means we start packing up now so we're out by December 31, so be it.  Use that as an exit line.  We invaded, according to you, Ms. Rice, so Saddam's imminent threat to America would not "come in the form of a mushroom cloud."  Remember that one?  Okay, we've accomplished all that.  No Saddam and no mushroom clouds.  Now don't compound this original, enormous, virtually unbelievable error in judgment by insisting that we stay in Iraq under a SOFA which involves the certainty that American soldiers will be subjected to Medieval notions of trial and retribution by a government where the major party is named the "Supreme Islamic Council of Iraq," and where it is most likely that all of their legal procedures and punishments will be modeled on Iranian concepts.

The bad joke's over.  Get all of those soldiers home.


Land O' Goshen

So here we are in another election year with the country as riven as always into its Blue/Red dichotomy, with both candidates forced to pitch their "platforms" to some nonexistent middle supposedly representing the political consensus.  Every four years it gets weirder.  The modern process can be dated to Nixon's Southern Strategy, that regressive pandering to the Dixiecrats of the Old South, those former segregationists who used to vote Democratic but found themselves abandoned in their prejudices by the liberal likes of John F. Kennedy and Lyndon Baines Johnson.

We wind up with a system where the compromises become more and more loathsome to both ends of the political spectrum.  We hear more often about how the progressives are "held back" by the theocratically inclined, but I have little doubt that it's just as troubling for the Evangelicals and social conservatives to find themselves immersed in a Godless, secular America over which they feel they have no control.  Despite the largely ineffectual sops thrown by the Republicans to the religious, the country keeps getting more and more socially liberal.  As a trivial example, on an episode of "Two And A Half Men" the other Monday night, a lap dance performed by a former kindergarten teacher figured prominently in the plot line. The dance was pretty explicit, too.  In prime time, on network TV.  Moving the other way, Barack Obama promises to continue the dubious practice, at least under one reading of the First Amendment's Establishment Clause, of faith-based initiatives using federal tax money.

Sarah Palin's meteoric rise to celebrity is symptomatic of the fundamental divide in the United States.  She doesn't believe in mankind's contribution to global warming (which, as a corollary, means she doesn't believe that the lowered pH of ocean water, which is a scientific fact, is actually a scientific fact).  She thinks that intelligent design or Creationism should be taught in public schools.  She believes that abortion should be illegal, under all circumstances, as a species of murder.  Sarah Palin attends the Assembly of God and believes in the inerrancy of the Bible.  I think it's fair to say that she is far more popular among the Evangelical base of the Republican Party than the interloper John McCain.  McCain's big problem, indeed, is that he has nothing much going for him other than the Republican brand.  He's an old boring guy with watered-down views and little passion for religious fervor.

When you look at a Red/Blue map of the U.S. , it's pretty obvious where the Republican base is located: the Deep South, other than South Florida which because of its large Jewish population tends to be liberal (as if the Israelites have once again effected a parting of the Red Sea); the Mountain States, with their large Mormon populations (Utah, Idaho, Wyoming, Montana, etc.). And the Grain Belt middle of the country, Nebraska, Kansas, the Dakotas.

I sometimes wonder (to say the least) whether the United States wouldn't do better as some sort of federation rather than this increasingly unsatisfactory arrangement as one nation all subject to the same laws handed down through Constitutional interpretations.  Maybe it would be better, for example, if Kansas could teach Creationism in their schools, and hold prayer sessions in public class rooms, and outlaw all stem cell research.  Maybe Georgia should be allowed to make abortion illegal once and for all.  Maybe same sex marriage should be banned in Utah in exchange for the Mormon promise that they'll leave California alone (as I think they might: the Mormon funding of the Yes On Prop 8 drive no doubt is based on their fear that freedom might spread across the whole country if it takes root in California).

It would not be as difficult to accomplish these things as you might think.  Here's the Tenth Amendment to the U.S. Constitution: 

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

And what did Thomas Jefferson have to say about that?  "The States should be left to do whatever they can do as well as the federal government."  The mischief really began with the Ninth Amendment's liberal interpretation by a liberal Supreme Court.  And what does the Ninth Amendment say?  

"The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."
That's it.  The entire edifice of "privacy rights," such as the freedom of married couples to do whatever they want in the privacy of their bedrooms (Griswold vs. Connecticut), is built on this amorphous "reservation."  Roe vs. Wade was premised on this amendment.  Was abortion a right retained by the people in 1789?  Who knows?  If Justice Harry Blackmun says so, then I guess it was.  

Now, I concede freely that the abortion debate is really a theological question dressed up as a secular/legal argument.  It is that investiture of a soul at the moment of conception that lies behind the controversy.  Same with stem cell research: George W. Bush bravely stood up for all those frozen cell clumps in embryo banks around the country, all those "snowflakes," because they are souls-in-waiting who must not be murdered.  The homophobia of the religious is based on their concept that homosexuality is a "choice," a decision made with free will to live in sin. The fact that a gay person might otherwise be an exemplar of moral behavior, perhaps in many cases far morally superior to a heterosexual detractor, does not explain away this failing. 

Do I think these ideas are nuts?  Sure, of course I do.  The problem for me is that so much of our national politics and legal process have become hostages to these theological questions.  For a Supreme Court nominee, one question and one question only: would you overturn Roe vs. Wade?  It distorts everything else.  How does a judge stand on issues such as the President's right to declare war without the consent of Congress?  In our country, unfortunately, the theocratically inclined judges who would overturn Roe vs. Wade will probably also believe in an authoritarian political system and the "Unitary Executive," thus abrogating the role of the people in deciding to go to war.

Maybe what will happen over time is that a distinct "Land O' Goshen" will be carved out of the middle of the United States where the Tenth Amendment is restored to its former glory and the states individually are allowed to decide all these questions for themselves.  A theocracy not so different from Iran or the developing Iraq where the entire litany of religious ideas are allowed full sway.  A pregnant teenager in Utah, raped by her father or brother, say, could still get a visa to drive to California to take care of things.  A search for cures for Parkinson's Disease using stem cells could still go on in Massachusetts.  In Kansas, however, everyone could hunker down and learn about the beginning of the Universe six thousand years ago, in a land where everyone is straight, mostly white, and definitely religious.  To say the least, Land O' Goshen would elect its own President, or whatever they would call their leader.  Whatever Sarah Palin wants to be called, I guess.  We'll need one more Constitutional Amendment, of course; eveyone who doesn't want to live in a theocracy will be given three years to get the hell out of the Land O' Goshen.

October 28, 2008

Hillary's Predictions Revisited

If you haven't checked out Nate Silver's polling analysis site at FiveThirtyEight.com, I would highly recommend that you do so.  Silver, who has achieved a minor celebrity because of the thoroughness and originality of his work, essentially does a meta-analysis of every major poll done in the United States on the presidential and senatorial races, corrects sampling and interpretation errors, and runs simulated elections based on the results.  Under his FAQ section, he explains how the simulations are done to produce the "win" percentages:

What is Win % or Win Probability? Simply, the number of times that a candidate wins a given state, or wins the general election, based on 10,000 daily simulation runs.

“How is Win Probability determined? By simulating the election 10,000 times each day by means of a Monte Carlo analysis, based on the current Projection in each state. The simulation accounts for the following properties:

(i) That the true margin of error of a poll is much higher than the sampling error, especially when the poll is taken long before the election.

(ii) That polling movement between different states tends to be correlated based on the demographics in those states.”

Using this approach, Silver estimates that Obama has about a 97% chance of winning the general election next week.  A prediction for every state individually is also given; for example, Obama has a 100% chance of winning New York and Massachusetts; he has a zero percent chance of winning Utah or Texas.  West Virginia was thought to be “in play” at one time, but not really, it turns out.  Obama has a 2% chance there.

So, to a certain extent, Hillary Clinton was right when she said that “hard working Americans, white Americans” preferred her.  They do indeed.  I imagine that West Virginia would poll very differently if Hillary had been the Democratic candidate.  On the other hand, FiveThirtyEight (named for the total number of electors in the American system) estimates that Obama’s current chances of carrying Ohio are about 84%; that was another state which Hillary won handily.  States such as Pennsylvania, another state carried by Clinton, will probably vote for Obama.  Silver estimates his chances at 99% currently.  538 also gives Barack the nod in Florida, to a 79% certainty.  The True Blue Bastions, such as New York, New Jersey, Massachusetts and California, of course, were always going to vote for the Democrat, so Hillary’s protests about being the more electable candidate did not make much sense with reference to these mortal locks.

 The most interesting states will be North Carolina and Virginia, come election night.  Because North Carolina has a Democratic governor (Mike Easley), and an ardent Obama supporter at that, it will be harder for the Republicans to cheat in the Tar Heel state, and cheating is the only practical way for the Republicans to steal this election.  They must cheat often, early and massively in order to compete at all, when you get right down to it.  Of the preferred sites for Republican cheating, Ohio and Florida, it has become more difficult in the Buckeye State because of a change in regimes at the Secretary of State level.  So the GOP effort will be aimed primarily at Florida, where voter ID laws of highly questionable constitutionality (picture ID with signature required, reminiscent of old poll taxes and “literacy” tests used to disenfranchise African-Americans in the Old South) are the latest Republican gambit for defeating the will of the majority.

 So 5,000 lawyers are flying into Florida just to keep an eye on things, among them your faithful correspondent.  It won’t stop all the cheating but it may help to keep things vaguely within the lines, a reasonable goal in the World’s Greatest Democracy, after all.

October 26, 2008

The Need to Believe in Barack

"Black Swan" theories posit the occurrence of outlandish, seemingly impossible events in the financial world which, despite all risk-hedging mechanisms, show up and knock all prior assumptions concerning safety asunder.  The failure of Long-Term Capital Management in 1998 was one such Black Swan. The mathematical algorithms which guided LTCM's investment strategies, as amazingly complex and sophisticated as they were, failed to take into account all the permutations in international finance which could set into motion a series of cascading failures.

The possibility of the bankruptcy of the United States, and its default on its Treasury-security obligations, is not, unfortunately, classifiable as a Black Swan.  Maybe a little off-white, or with distinctive markings on its bill, but not wholly anomalous.  The truth of the matter is that the U.S. government's fate, and the fate of the American economy, is not really completely, or even mostly, within our control any longer.  It is indeed fairly easy to picture scenarios in which the American economy is simply rolled up.

The bailout programs unleashed on the private sector by Henry Paulson and Ben Bernanke depend on the manufacture of money which the United States does not actually have.  It's all very well and good to promise $700 billion to rescue distressed assets from banks and investment houses, or to pledge $550 billion to relieve money market funds from the stresses of redemptions, or to buy huge insurance companies like AIG, or to keep throwing colossal amounts of money in every direction in an effort to restore the U.S. economy to exactly its perceived condition in about July, 2007.  But a moment's reflection tells you that the U.S. cannot possibly have all this money available.  The federal government, every year that Bush has been in office, has run deficits of about 1/2 trillion dollars.  Part of these deficits are the result of borrowing the "excess" from the Social Security and other trust funds, which simply delays the moment of truth to the date that such funds become insolvent. When that happens (and it will happen within a decade), the United States is simply going to declare the Social Security and Medicare entitlement programs bankrupt and that will be that. But about half represents real debt owed to real, and mostly foreign, creditors who buy U.S. Treasury bonds.

The entire sustainability of the dollar as the world's reserve currency depends on the willingness of foreign creditors to keep funding our (1) federal budget deficit and (2) our current account deficit (trade deficit), which runs about $55 billion per month.  The problem is that foreigners are losing interest in doing so.  While large foreign banks (and sovereign wealth funds) are propping up the dollar by buying large amounts of Federal Treasuries (to protect their own large holdings of dollars), foreign private investors are barely buying any Treasury securities at all.  The influx of money into the Treasury recently simply reflects the redistribution of investment from terrified investors who are bailing out of the stock market.  That won't last.

So where's the money going to come from to fund all this "restructuring" and social engineering? Asked another way, if the U.S. consumer is tapped out, which s/he is, and cannot afford to buy all those imports from China or all that oil from Saudi Arabia, what is the motivation for these countries, and many others, to continue to buy U.S. Treasury bonds which, after inflation, actually return less than zero?  And a related question: if the United States continues its bellicose posturing, threatening this country and that, including many of our creditor countries (Russia, e.g.) and energy suppliers (Venezuela, e.g.), why would the targets of U.S. aggression continue to finance their own insecurity?

We're not used to asking such questions, but that is all going to change.  We continue to regard our standard of living as "nonnegotiable" (D. Cheney), and it is certainly higher than that found in Russia or China.  The problem for us is:  there is nothing fundamentally different that we are doing here in the U.S. which assures that will continue to be the case.  We began with a huge head start, but we've been coasting without the necessary investment in education, infrastructure or energy innovation necessary to sustain our standard of living without massive borrowing on highly favorable, impossible-to-maintain terms.

That's the fundamental reason I don't want John McCain to be president.  I think he's completely locked into a business-as-usual approach to this enormous challenge.  He simply cannot see America in any terms other than as a world-dominant superpower which can impose its will on the rest of the world simply by dint of historical momentum.  But that's actually gone. That's what the current financial crisis is really all about.  These are the first, very ominous signs that the American system is fracturing apart.  We are completely dependent on massive borrowing to "fund" our way out of it.  

Some people see this clearly, and that is the reason you have seen an unprecedented number of defections from Republican ranks toward Obama.  Much is being loaded on the slender shoulders of this young man.  In truth, I think his qualities are being exaggerated by the desperate hopefulness of those who see him as some sort of savior.  The editorial boards of all the major newspapers, "traitors" like Colin Powell, Scott McClellan, Christopher Buckley (and the closet traitors like David Brooks and George Will), all of them fear John McCain and his robust nationalism because they know it will lead to perdition.  I think this dread, this unease has an inchoate quality in which the underlying reasons for the fear are not always completely understood by those drawn to Obama.  They're too blinded by their own jingoism to admit it even to themselves.  But this election could very well be it.  This is the All In moment.  This might be the last chance.