November 14, 2008

George W. Bush's Coup de Grace

The latest figures available for fiscal year 2009 (that ending September 30, 2009) indicate that the federal deficit for the year so far is about $232 billion.  This represents the deficit for the month of October just past.  Annualized, the deficit for the year at this rate, in other words, would reach $2,784,000,000,000, or nearly 3 trillion dollars. We have, ladies and gentlemen, entered the Realm of Weimar, that crucial threshold where all semblance of rationality, manageability, and sanity is gone.  Our situation is now analogous to the coked-out movie star who has become indifferent to the repo men who have scaled the security gate and are systematically hotwiring and driving off his Rolls-Royces, and hijacking his Gulfstream Jets in midflight and and holding auctions of his Beverly Hills mansions - but not only indifferent, but manically screaming that he needs more coke and whores and tells his henchman, as he waves his gun around, that he demands a new Mercedes and a villa on Como.

You know, that point at which it's a joke to imagine any realistic way out of it. Congress is frantically "authorizing" "money" to buy all the investment banks, recapitalize all the commercial banks, buy AIG, salvage the Big 3 auto makers, and omigod! what just happened over there! There are so many "programs" to save so many vital aspects of the American economy that we haven't had time to sit down and calmly appreciate that this is madness.  The federal government was broke before it started doing all this.  Its Triple A credit rating was already in doubt.  If we push the national debt to $20 trillion, and if $15 trillion of that is "true" debt owed to outside creditors (and not to the bankrupt Social Security & Medicare funds); and if we have to pay 10% interest to attract all the money we need to borrow, isn't it obvious the major part of the federal budget will be used increasingly to pay interest on what we just borrowed? Nobel Prize winning columnist Paul Krugman is urging Obama to "go big" to get the U.S. economy moving again; in other words, ignore the deficits and move full-speed ahead. I guess so - if the collective worldwide hallucination of American solvency is not disturbed, that's what Obama will have to do.

George W. Bush is going out in a blaze of destruction, that we can clearly see.  With just over two months left, Bush could not quite get the pneumatic jacks to work well enough to hold up the White House roof long enough for him to get to Dallas.  Like Maxwell Smart, he missed it by that much. I saw him yesterday giving a brief talk to the Manhattan Club, extolling the wonders of the free market, gloating over the failed economy of Cuba, smirking, winking, wrinkling that narrow brow. The whole shtick.  I noticed that the jaw twitch was back in force; it's a spasmodic sideways jerking of his lower jaw while his mouth is held slightly open.  I don't know what it means.  Some have suggested it's a tic symptomatic of central nervous system damage brought about by substance abuse.  At this point, it's not even really interesting to speculate anymore.  Of course there are serious things wrong with him, but the true thing is that he's been President for the last eight years.  Of that we can be sure.

The graphs in the upper left were put together by a talented scientist in the Southwestern United States.  They depict slopes based on 3rd order polynomial calculations and offer graphic evidence of what happened to the United States once we abandoned the principle of intelligent management in favor of amiable idiots appealing to "values voters."  America had experimented with idiots before.  Warren G. Harding, Herbert Hoover, for example.  However, the drastic consequences of entrusting a system as complex as the American economy to dumb guys included the Great Depresssion, so that the electorate was chastened into voting once again for competence. For a long time, then, we placed the stewardship of the United States only in the hands of intelligent, competent leadership: FDR, Truman, Eisenhower, Kennedy, Johnson, Nixon and Carter.  

But as Santayana warned us, those who cannot remember the past are doomed to repeat it.  So we elected the first of the amiable dunces, Ronald Reagan, who made all kinds of stupid pronouncements about the "irrelevance" of federal deficits, or the principle of fiscal prudence in general, and who went on a spree of massive military spending while simultaneously drastically reducing the government's primary source of revenue.  Reagan saw the government as the enemy, although the government, really, is just us. So we declared war on ourselves, and we won.  And lost.  We followed Reagan up with the first of the Bushes, then took a shot at another smart guy, and look what happened?  Even working against a Republican Congress for six of his eight years, a Congress which wanted to attack and hamstring him with endless moralistic crusades throughout his tenure, Clinton began to bring the financial house back to some semblance of order, even to produce a budget surplus in his last couple of years.  And then Bush II:  the Coup de Grace, finishing the dark work of Reagan and his father.

With the sort of prudent guidance which Al Gore would naturally have carried forward, that hypothetical extension in graph #2 could have been our reality.  We would have innovated, dealt with global warming, adapted to changing circumstances, revitalized the economy. Gone $20 trillion in the black, enough to do whatever we needed to do to change energy paradigms. Alas, it was not to be.  For 20 of the last 28 years, we have squandered our resources, bankrupted our country, fought needless, ruinous wars, and destroyed the legacy of America for our children.  At a point very soon, the world is going to finally, regretfully conclude that the USA does not have all the money it is "spending" to bail itself out of every exploding catastrophe.  We are in the position of a man standing on a ladder, a few feet short of the roof, trying vainly to lift the ladder with his own hands.  It is entirely possible the world will not allow us to forget this particular lesson of history and make the same mistake all over again.

November 12, 2008

Captain Barack of the S.S. Carpathia

So Bush has 68 days left; does the United States?  This is pretty excruciating to watch, the clock ticking down on an utterly failed presidency while the stock market continues to tank, the auto industry verges on collapse and the same clown troupe presides over the bankrutpcy of the federal government.  "President" Bush seems as oblivious as ever.  I guess he honestly doesn't notice that anything whatsoever is wrong anywhere.  Everything is fine; c'mon in, Barack, let's sit in the Oval Office and talk shop.  There is so much you need to learn from me.

The sales of General Motors are down 45% this year compared to last.  Its stock capitalization is now 4% of the value of Toyota.  During the Eisenhower era, the saying was that "as General Motors goes, so goes the nation."  This is about exactly right; the Dow Jones is at 8,400 currently, versus a high of 14,000.  Let's go to the chalk board and figure that one out. Wow, wouldn't you know it?  That's a 40% drop.  Ike was right!  

And here's a video of some wise guy with a foreign accent uttering the unthinkable:

"The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

"In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off," Hennecke told CNBC."

You'll notice that the disputatious guy with a different foreign accent takes issue with the doomsayer by trotting out the usual bromides; the US prints the world's reserve currency, it has an infinitely elastic capacity to raise money through taxation, etc.  Then, sensing that's not enough, he throws in everything else: the USA is "innovative," and resilient, and, and.....IT'S GOING TO BE OKAY, DAMMIT!  

Things are not getting better fast.  Of course, as Mr. Hennecke points out, we have a lot of company around the world.  Maybe the World Trade Organization could be rechristened the DTO, the Deadbeat Trade Outfit.  Instead of Triple A ratings, we could simplify to three new ratings: A: We'll probably have something for you later in the week. B: Things are a little tight right now.  C: The check's in the mail.

68 days to go.  Bush can do a lot of damage in 68 days.  He has no peer in the modern world when it comes to wreaking havoc.  Sure, it looks easy to take the national debt from $5 trillion to $10 trillion in only eight years, but that's just because you've never tried it.  And the stock market? Where should the Dow actually be at this point?  Let's say, to be generous, that Bush began at about 10,000.  Let's compute a rate of return of 7% on that level for 8 years and see what we get, shall we?   FV = PV ( 1+i )^n\,

There's your basic formula.  This innocent looking equation is not very kind to Mr. Bush; you see, 7% is actually a pretty reasonable estimate of bull market returns back in the good old days.  Future value = present value times the sum of 1 plus .07 multiplied by itself 8 times.  Which equals 17,181. We've come this far; let's check the current value as a fraction against this fantasy result had we been governed by a real president: 8,400/17,181 = 49%.  That again seems about right; about 49% of the electorate voted for George W. Bush in 2000.  How's that working for you?

I suppose the rest of the ghoulish games that might be played between now and January 20, 2009 include over/under guesses on the unemployment rate (official version).  We're at 6.5%  I'm confident George can get it to 7.5%.  If GM goes, the ripple effect would get us to 10% all by itself. How about a guess as to the federal deficit for the fiscal year ending September 30, 2009?  Anyone doubt that George W. Bush will smash all records, maybe by a factor of 3?  If you doubt it, you just don't have the kind of faith in our boy that I do.

Perhaps this is a little like the situation in 1912.  Barack Obama is the captain of the Carpathia. He hears the distress calls of the Titanic.  He's steaming in the direction of the doomed ship, but it's breaking in half and going down.  The survivors in the life boats are looking frantically for their loved ones in the icy waters.  By the time the rescue ship can reach the scene, a deathly silence prevails over the black sea.

November 11, 2008

The Prop Eights of the Future

From the irrepressible, indispensable Nate Silver of, the new and future genius of all things statistical: 

At the end of the day, Prop 8's passage was more a generational matter than a racial one. If nobody over the age of 65 had voted, Prop 8 would have failed by a point or two. It appears that the generational splits may be larger within minority communities than among whites, although the data on this is sketchy.

The good news for supporters of marriage equity is that -- and there's no polite way to put this -- the older voters aren't going to be around for all that much longer, and they'll gradually be cycled out and replaced by younger voters who grew up in a more tolerant era. Everyone knew going in that Prop 8 was going to be a photo finish -- California might be 
just progressive enough and 2008 might be just soon enough for the voters to affirm marriage equity. Or, it might fall just short, which is what happened. But two or four or six or eight years from now, it will get across the finish line.
Just as an aside, I noted on election night that Chuck Todd, MSNBC's former electoral genius, appeared to be hearing footsteps.  He seemed to strain to find some way to discover a miscalculation in all the pro-Obama forecasts, particularly those of Nate Silver.  Nate's serene, eerily calm and consistent prognostications of an Obama landslide were, of course, vindicated in force.  You had your run, Chuck; problem is, you've been supplanted by a genuine number-cruncher, a guy who's not so telegenic but can do something you can't: understand statistics.  If you want a further example of just how deep Nate goes, read his current comments on the Franken - Coleman runoff in Minnesota.

So take heart, marriage rights advocates.  The old homophobes aren't going to be around forever and your day will come.  Coccooned within their religious dogmatism, the Evangelicals, Catholics and Mormons who are so certain that marriage is only "between one man and one woman" (although the Mormons, at least, have not always thought so), cannot see that the future will be very different.  Procreation occurs between one man and one woman, one must grant that.  But it is just like the religious, who are so confused about so many biological things (like evolution), not to see the distinction between this fact of life and emotional commitment, which is available to a broader class of humans.  To everybody, in fact.  I know enough about the generation to come, the kids who are now in their twenties or so, to know that they simply don't care at all, by an overwhelming majority, who gets married.  If heterosexuals want to get married, fine; if gays want to get married, fine; if nobody wants to get married, that works too.  

The religious, after all, are weighted down by ancient myths devised in the pre-scientific era (thousands of years ago).  Thus, naturally they are prey to ideas of "sin" in connection with sexual preference -- one chooses to be gay out of an errant appetite.  Silly beliefs like this cloud the perception that homosexuality is hard-wired, which is why religious zealots find themselves in the ridiculous position of arguing against studies, for example, which demonstrate homosexuality among penguins, specifically, Silo & Roy at the Manhattan Zoo.  Personally, what Silo & Roy do on the privacy of their own ice floe is without consequence to me.  Mormons, I guess, are somewhat freaked but can handle it as long as S&R don't try to sanctify their relationship with marriage.  Which is a shame, because they're both already wearing tuxedoes.

One way that the Prop 8 dreariness doesn't have to be repeated is if an Obama-liberalized U.S. Supreme Court considers the issue under an Equal Protection analysis.  Think about it.  In Brown vs. Board of Education, the issue was whether providing "separate but equal" schools for black children comported with Equal Protection.  No, it didn't, said the Warren Court.  The stigma of separate facilities makes such a practice inherently unequal.  Because of the fervent and irrational quality of homophobia, it is difficult for the intolerant to see that the issue of gay marriage is more or less exactly the same.  Providing civil unions while denying marriage stigmatizes a minority of citizens who possess a trait (sexual preference) over which they have no control, as assuredly as race.  

Most of us are now completely at ease with the holding of the Court in Brown.  Naturally, there are lingering Jim Crow advocates who will disagree now and disagree forever, as George Wallace said about segregation.  And there will be religious zealots who justify their bigotry and intolerance now and forever against gays, but history will also push them aside in the long run. They see their lingering battle as heroic; I think it's simply one more obstacle to overcome on the road to Equal Rights.

November 10, 2008

You Go, O

It's distressing, only in the sense of unfamiliarity, that Barack Obama is doing so many things right already.  I have read that the most profoundly unsettling thing about international travel, for example, is that nothing is where it usually is in your life and you have to adapt every waking minute.  That's probably why you can remember the details of trips so well: you had to focus, whereas one's usual somnambulant routine requires no such concentration.

I watched the interview of Barack's campaign team last night on "60 Minutes."  They were calm and matter-of-fact.  No Drama Obama apparently ran his campaign exactly as it looked: no frenzy, no extreme highs and lows, just relentless organization and hard work.  In two years, a guy with very little name recognition (and with such a strange name for American politics) went from a kitchen table meeting with David Axelrod, David Plouffe and Robert Briggs to a landslide victory last Tuesday.  Their success was a classic example of the application of high intelligence to a complicated process.  Axelrod, whom many regard as a kind of electoral genius, nevertheless said that Obama was the single brightest man he had ever been around.

So the President-elect is this highly gifted and intelligent man who happens to have come from definitely tough family circumstances, who therefore knows what it's like to try to struggle to make a living and survive in American society, and who furthermore has devoted his vocational life to the amelioration of poverty and social injustice. He demands competence from himself and from those around him.  Can you imagine in your wildest dreams, for example, the image of Barack Obama playing air guitar in Southern California while black families sat in terror atop their houses in the rising waters of New Oreleans? It turns out, furthermore, that he has had about 50 lawyers working for months examining the more outrageous and insupportable Executive Orders and signing statements of the current incumbent, and he's going to spend the first day or so working up a powerful cramp in his left (3-point) hand reversing every last one of them.  He's also going to close down America's concentration camps and bring the United States back into compliance with the Geneva Conventions, the Federal Anti-Torture Statutes and the War Crimes Act.

That's more than just a good start - that's phenomenal.  It was more than I'd dared to hope.  I mean, what next?  Actual competent staffing of the Justice Department?  A director of the Environmental Protection Agency who is not drawn from a K Street coal and oil lobby?  Global warming reports written by scientists and not censored by an oil company attorney-hack with no scientific training?  Unfettered stem cell research so our best genetic researcher (from UCSF) can return from England and do the world's best work again? Yep.  An ability of Nongovernmental Agencies working with foreign countries on birth control to discuss the full range of family planning alternatives, including abortion, which are legal under such countries' laws?  Yes again.  Shutting down the Legal Black Hole of Guantanamo and outlawing the use of hearsay testimony extracted through torture?  Uh-huh.  Tax incentives, instead of tax obstacles, to the development of mass solar arrays, wind power and geothermal?  Ditto.  Hope? You got it.

I've just got one problem - what the hell am I going to write about?