Austerity, Then & Now

At a very personal, selfish level, I don't really care how "austere" the government decides to become. I don't have any real skin in the game, other than the increasingly perilous adventure of trying to drive on California's potholed roads. America doesn't really have any public amenities which are threatened by greater austerity; for example, we don't have a real passenger rail system, or much of anything in the way of public transportation. The conditions of accommodations and facilities (bathrooms, etc.) in national and state parks are usually a complete disgrace, and so forth. The graffiti-strewn walls, the urban blight, the shitty, cheap, tawdry look of so much of what's been built in this country in the last 60 years, are all reflections of the people who live here, their aesthetic criteria, their social mores. It's how we live and we've all gotten used to it. The public realm in general in the United States is a vast wasteland, in fact, and is the emblem of our governing ethos; to wit, beauty and grace in life are "private virtues" which must be earned and purchased. You must amass enough money to buy your own sylvan enclave, or your house on the beach, in order to escape the crapscape (h/t: James Kunstler) of American life in general. Amazingly, the financial elites who own such an overwhelmingly large proportion of the wealth in this country, and can afford to insulate themselves from the trash heap, have enlisted the help of the some of the most disadvantaged (the Tea Party types and Southern Rednecks, not always the same people) to assist them in enforcing this way of doing things. Thus, the Tea Party has as one of its main platform planks the perpetuation of the "Bush tax cuts," as if such a top-margin benefit could possibly help them at all.

When the public realm is in such a catastrophic state, the key strategic move is to insulate yourself as much as possible from its effects. Although I'm eligible for Social Security now, I don't draw on it; I continue working. I'm too young for Medicare, and I'm self-employed, so I will never receive a penny in unemployment, welfare, public pension, or (currently) government-furnished health care. Thus, I read the weekly reports of new UE (unemployment claims) and even the unemployment numbers themselves (since I will never be counted one way or the other) with a great measure of personal detachment. In a way, none of this has anything to do with me.

I have a lot of company in this state of societal anomie, of course. Millions and millions of people, just like me. Working stiffs with no safety net all. As I said a few posts back, the sense of national "cohesion" in this country is in an advanced state of deterioration. We're kind of a mixture of a Hong Kong-style economy, with a manic desire for deregulation and anything-goes entrepreneurship, and a Greek-style approach to complete fiscal irresponsibility and mass tax avoidance. The same financial elites who own the government and manipulate the Right Wing booboisie (h/t: H.L. Mencken) with empty slogans and rhetoric favor complete deregulation, except when they blow themselves up and need hallucinated "money" to restore them to "balance," and otherwise advocate absolute minimization of any financial support for the country of which they are nominally a part.

Thus, what does "austerity" have to do with anything anymore? The financial elites are just as happy to borrow money on the "credit" of the Treasury as the so-called "liberals." The budget cutting antics of the Republicans are simply Kabuki theater. They know, and we know, and they know that we know, that the paltry reductions they are suggesting will do absolutely nothing to avert American bankruptcy. Their frivolous posturing, however, does impress some of the rubes in the cheap seats, who are too lazy, ignorant and ill-informed to perform the very simple math involved in assessing national income (about $2.2 trillion, the subtrahend), comparing it to national spending (about $3.8 trillion, the minuend), producing a difference of $1.6 trillion. Now let's do some more math: $100 billion/$1.6 trillion = 1/16 = 6.25% of the budget deficit. This is the House Tea Party contingent's big proposal, this is their extreme position, the one that may shut the government down.

Goldman Sachs, that company famous for doing God's work here in His Earthly Kingdom (God, I mean, not Lloyd Blankfein), recently prognosticated that a $50 billion reduction in federal spending would produce a 1% reduction in national GDP. Now, G-Sax is not exactly bearish on American prospects, since part of their scam is to encourage the endless funneling of money from the Federal Reserve into Wall Street, the better to "stimulate" the economy into "recovery." In a linear extrapolation, this would imply that $100 billion (the aforesaid 6.25% "slashing") would cause a 2% loss in GDP, or the current estimate of the entire growth for 2011 (revised downward recently, since the government has begun to notice that despite their rosy UE stats, no one is actually working). Let us continue this morning's math session. Assuming this same linear extrapolation holds for greater amounts of budget "cutting," what would be the effect on the economy of doing the only rational thing, living within our actual means? Well, let's figure it out. If $50 billion = 1%, then since $1.6 trillion is 32 times larger than $50 billion, G-Sax is implying that a balanced budget would result in a 32% fall in GDP. How much did the GDP of the United States fall during the depth of the Great Depression? Answer: 30%.

Such ruminations may suggest to you just how utterly phony this so-called American economic "recovery" actually is, and why despite all of the fake number crunching at the Bureau of Labor Statistics, the country has not actually produced any new full-time jobs for the populace in over ten years. We are sustaining the economy with the same false source of prosperity (massive debt) which fueled the run-up to the crash in 2007-08, only now it is the public sector which is pulling the laboring oar on the slave-galley ship of penury.

Thus, there won't be any austerity. There can't be, because the political class cannot face the ruinous consequences implied in their own austerity rhetoric. They'll run this scam in Washington as long as humanly possible, they'll use every trick in the book, they'll print money, ship it to England, and pretend that the "UK" is buying American Treasury bonds, along with the Federal Reserve, which is already printing money to "buy" bonds from Primary Dealers, who in turn often had just closed the purchase themselves a few moments before, pretending that this indicates bond-buying "interest."

Austerity, like prosperity in this country, will eventually become a "private virtue." It will be what we have left. Thus, 'tis best to cultivate an attitude of mind which anticipates such a state of affairs. The Zen of detachment, an austerity of expectation.

Raise High the Tax Level, Carpenters

Faithful reader JM weighs in with the question about raising taxes. There are, after all, two approaches to balancing the budget. My own sense is that there is enough money sloshing around in the American economy to achieve a federal balance without significantly damaging the Lifestyles of the Rich & Famous. It would take two significant moves: One, an increase in the top marginal rate paid by the pluto-oligarchs; and Two, a more rational approach to defense spending which would reduce the outlay to, say, the $500 billion level (and that's everything, tips, gratuities, even the gift bags). To solve Social Security, the cap on the maximum income subject to FICA tax needs to be raised and perhaps titrated, year-by-year, to achieve a balance between outgo and income. And the health care system needs to be nationalized.

The Pluto-Oligarchs will, naturally, point to the following chart, which demonstrates that about 70% of all income taxes are already paid by the top 10%. This fact, of course, tends to demonstrate that income inequality in the United States has reached obscene, Gilded Age levels. Caricatures of the very rich come easily to mind. Do they really need 5 vacation homes when 4 should get the job done? Is it necessary to travel by helicopter to the Hamptons when a chauffeured limo is cheaper? If John McCain isn't even certain how many houses his heiress/USC cheerleader wife owns, isn't that an indication of excess and not just of mental vacuity?

Percentiles Ranked by AGI	AGI Threshold on Percentiles	Percentage of Federal Personal Income Tax Paid
Top 1%	$380,354	38.02
Top 5%	$159,619	58.72
Top 10%	$113,799	69.94
Top 25%	$67,280	86.34
Top 50%	$33,048	97.30
Bottom 50%	<$33,048	2.7

I would answer that just because the wealthy are paying a lot (relative to the total paid) does not mean they are paying enough. It all comes down to a question of what kind of country we actually want, which is an oblique way of saying: what happened to the concept of patriotism in this country? Why do the rich, through their army of lobbyists, want to hamstring the federal government through relentlessly lowering the top marginal rates (and why does the Crypto-Republican, Barack Obama, play along)?

One idea I have is that modern American politicians, such as the aforementioned Mr. Obama, wear the American flag lapel pins popularized by the Bush-era Gauleiters to remind themselves that they are, in fact, Americans. It's not always obvious. The move to globalization, the tax breaks for offshoring companies, the preference for spending money in places like Iraq and Afghanistan instead of Detroit and Baltimore, confuse the issue of just whose interests they're really serving. Increasingly, I get the idea that patriotism in this country is not only the last refuge of scoundrels, but is an entirely outmoded concept. Saying such a thing in the wrong redneck bar in Columbus, GA, could be a huge mistake, of course, because all those soldiers transiting from Fort Benning to the killing fields of Baghdad and Kandahar, and who come home with one leg, or no eyes, or a damaged brain, don't want to hear about this "death of patriotism" stuff, so keep it to yourself, you Berkeley fag-radical.

A conversation to be avoided, at least in that context. Still, the people responsible for sending these soldiers overseas, by an overwhelming majority, do not themselves place their asses on the line, nor those of their close relatives (Bush, Cheney, Obama, Wolfowitz, Rice, Feith, Limbaugh, Beck, O'Reilly, Coulter et alia ad nauseum). Nor do they actually foment and sustain these wars out of patriotic motives; they're entirely mercenary, the acts of war profiteers or of political opportunists. Sadly, this is the emotional trap, the cover story of an inapt patriotism, which ensnares the military grunts, the ones actually in harm's way. I feel for them. You could say it's my patriotic duty.

All of this is a roundabout way of saying that I think The Powers That Be in this country essentially use the United States, for want of a less techno-hip word, as a platform for commercial purposes. America is a headquarters country, and the richest use the USA as a base of operations without sinking deep roots into our native soil. They build their factories overseas and they seek to starve their own country of nationality of the tax benefits of their largess (billions in corporate profits are kept permanently overseas so that they can avoid the problem of "repatriating" the money and exposing it to taxation). A compliant Congress builds a tax and regulatory regime which enables all of this unpatriotic activity.

Which is why I don't think a massive restructuring of the tax paradigm is worth the effort anymore. For entirely different reasons from the right wing "small government" freaks, who are primarily interested in dismantling the welfare state so that government's functions can be limited to maintaining the military-industrial complex and bailing out their banks once they screw up again in the course of trying to screw everyone else.

I've become more of a "regional guy," someone who believes the central government apparatus has become too big, too complex and completely unmanageable and unresponsive. These are the reasons I believe that so many Americans feel detached from the nation they grew up in. No matter what the polls show (leave Iraq now, end this decade-long fiasco in Afghanistan, shrink the military, place some rational limit on possession of private Kalashnikovs, give the people some form of socialized medicine we can actually afford, try to keep the ambient air temperature in the sub-100 degree range), the political system remains unswayed. It serves its own interests, not those of the general public.

Most of the things we really need that government provides happen at the local level: schools, fire departments, police, fixing potholes. The federal government has become a very irritating and insanely expensive distraction. So yeah, Grover Norquist: starve The Beast. I'm just picturing something a little bigger and more comprehensive.

Note to GOP: Please, Please Shut the Government Down

It's just that we could all use a break.

The major objection to making them all just shut the hell up and go away for a while is that the Social Security checks which would otherwise be sent out or directly deposited in recipients' accounts on March 10 (the first distribution date after the March 4 expiration of the "continuing resolution" under which these clowns continue their act) will be interrupted. I concede that is a cause for concern, but c'mon, even these brain-dead politicos can surely find a solution to that. The FICA payments will keep coming in; can't someone, just one clerk, stay behind and make sure the mail goes out?

That wasn't so hard, was it? Okay, so the one real problem with disbanding the federal government has been handled.

The beautiful part, the hopeful angle, to the government shut-down is that it will happen unless Congress does something to prevent it. We know how good they are at that kind of thing. These are the same people running a $3.8 trillion operation on a $2.2 trillion budget. As noted, the "continuing resolution" which permits the government to spend money will expire on March 4, which is only 11 (eleven!) days from now. They have to use a "continuing resolution" to begin with because there is no real budget in place, and hasn't been for a very long time (Obama did not propose one for the previous fiscal year) which is to say, the continuing resolution is itself a sign of the extreme dysfunction in Washington's governance. Emblematic of its lack of realism, of its tendency to procrastinate and to act like little children. The GOP wants Obama to enact its meaningless series of token, mean-spirited, Luddite budget cuts, which are all aimed at favorite conservative voodoo dolls, like the Environmental Protection Agency, and the Department of Education, and scientific research, and solar energy, and the rest of their list of Liberal targets. The Democrats resist all of these token gestures in favor of token gestures of their own.

"That's the wrong $30 billion to cut out of the $1.6 trillion deficit!" is the moving battle cry of the Democrats, our liberal heroes. "If we're going to eviscerate government spending by cutting nearly 2% of the budget, excuse me, deficit, then we need to target carefully the budget cuts we choose, because the American people are counting on us to do our jobs!"

They all agree on only one thing: the Department of Defense must have its money.

See what I mean? Are you coming around? Can't they just all take a hike, like the Democrats in Wisconsin did? The Donkeys in Wisconsin went to Illinois; the asses in Washington, D.C. have all fifty states to choose from. Anywhere other than the District of Columbia, which is where they screw everything up.

Do Tom Coburn and John Boehner realize just how much of an Uncle Remus situation this is? Please oh please, Congress, don't throw us into the brier patch of a government shutdown! What would we do without you?

Obama will veto your spending cuts, because he's a man of principle. He believes that if we're going to save money, we should do so by cutting LIHEAP, the assistance to low income families that allows them to avoid hypothermia during the arctic months of winter in the Northeast and Midwest, particularly in those areas which are not reliably Democratic. The O-Man has argued strenuously for slashing this unconscionable waste of money from its present $5 billion to $2.5 billion. Saving this money will allow us to continue nation building in Kandahar, which is where our interests really lie, not in those row houses in Philadelphia where the gas was turned off a month ago and the interior temperature has that same invigorating, chilly zing! as the air outside. Well, who voted for Hillary in the 2008 primary?

So many heroes, so little time to choose. The question is: which side to support? Where should we be spending all that money that Congress needs to borrow in order to spend almost anything? Should we borrow money and spend it on education, or borrow money and spend it on suppressing the Taliban a while longer, since the first decade of suppression hasn't quite done the trick? These people obviously know what they're doing, and I want to be sure they have the tools to do their jobs. But just to give them time to reflect on their priorities, to make sure they "get this right," as they all like to say - maybe they should take off for a couple of years and think it all through. You know?

Whistling past the bankruptcy court

My thinking has been in a state of backwardation lately because I just can't get past this game of charades that Congress and the President are playing concerning the budget. Nomi Prins wrote something kind of funny about it the other day; to wit, two firemen are standing on the sidewalk across the street from a burning house, and they're arguing about whether it would be better to use a teaspoon or a teacup to put the fire out. Think of one as the Democrats, the other as the Republicans, and that captures the essential absurdity. President Obama has talked about eliminating "$1 trillion" from the budget; however, he's talking over the next ten years. The Republicans want to cut $100 billion this year, if they can find some place to start. I'm not seeing the real difference between these two futile gestures.

The impotent paralysis of the federal government in its attempts to grapple with a budget deficit of $1.6 trillion is something to behold. Holograma has put out forecasts of tremendous growth in tax revenues over the next 4 or 5 years, increasing from its current anemic $2.2 trillion to $3.5 trillion in just a few years. This will apparently be accomplished without any real increases in taxation levels; indeed, Obama would be an odd person to lead such a change since he just got through capitulating on large tax decreases in yet a further attempt to ingratiate himself with his Stockholm Syndrome Keepers.

Here's what I think lies at the root of this collective psychosis. The Very Serious People in Washington have themselves convinced that the Depression which engulfed this country in 2007 is simply and only a function of a discrete event, to with, the securitized-mortgage (and related derivatives) meltdown which arrived in its most florid form in the fall of 2008. The financial precariousness of the banks, their inability to lend - these are the things which caused the system to "freeze up" and interrupt the Great American Wealth Creation Machine.

Your faithful diarist, however, has never seen it that way. Here among the quiet, virtual snow banks beside my virtual Pond, it seems rather to me that 2008 (the stock market meltdown really began in the summer of 2007) simply marked the endpoint of America's desperate effort to prop up a false standard of living through the relentless accumulation of unpayable debt. Real wages in this country, for the vast majority of people, have never kept pace with the liabilities assumed or with the standard of living which such debts implied. Things have been moving this way since at least 1973, and all graphs and other empirical evidence point in exactly this direction.

The housing bubble was the last gasp effort of American society to fend off the moment of recognition. The "wealth effect" of house-as-ATM, as store of value, as a substitute for making any freaking money with a job -- this kept the decade of the Aughts going for a while, sustaining the illusion. However, the inability of the populace to service the debts taken on, often in the form of loans which did not represent their real long-term carrying costs, meant that default would become epidemic, and as that happened, the market value of houses suffered a nationwide collapse. All of this has happened against the backdrop of a relentless hollowing out of the manufacturing base which once sustained the middle class, as opposed to the crap jobs of the service economy. In this view, the fall of Wall Street flowed naturally from the default of American society as a whole. None of this is to exonerate the crooks and swindlers who arranged things so that the inevitable meltdown would accelerate, perhaps even overshoot the downside implied in the collapse, and all as part of their orgy of greed. But in a larger sense, the fact that this is the sort of thing we do now to make money, participate in non-productive rackets, is symptomatic of the overall malady.

Obama, Congress, the D.C. Establishment much prefer the Meltdown-as-Interruption thesis to explain away our problems. The $2.2 trillion in national income, in this way of looking at things, is an aberration, a momentary setback, until the juggernaut of the American economy gets underway again. There is no need to scale back federal spending, the $1.6 trillion deficit is workable, the practice of the Federal Reserve in conjuring money out of thin air to buy our own debt -- all these things are just stopgaps until hiring picks up and the economy returns to those halcyon days of 2005. In the meantime, let's just keep spending as we always have, we'll borrow from ourselves if we have to, but in a few years when federal revenues have increased by 75%, this will just be an unpleasant memory.

That, I think, must be the plan. All these Very Serious People are standing around in a circle and telling themselves these things over and over. This is a great country, don't bet against America, we're innovative, entrepreneurial, it's just a matter of time.

Well, what else can they say? The alternative is pretty unthinkable. How do you cut a budget of nearly $4 trillion roughly in half? The really, really weird part is that's actually the point we're at. That's the part that isn't made up. The forecasts, the projections, the political posturing, the speeches, the blame-games, the conjured money, the pretend Treasury auctions-- those are all make-believe. That we're broke - that's the reality.

The breathtaking elegance of national debt financing

It took me a while to catch on, but I think I've figured it out. In his new budget proposals, President Holograma has forecast really awesome numbers for federal revenue over the next few years which will gradually eliminate the deficit and restore America to prosperity. Since I can't really see how this can be accomplished with the materials at hand, you know, just looking around at the jobless situation and rather ungraciously noticing that the actual number of full-time jobs in the US of A is about the same now as in the year 2000 (about 130 million), I'm tempted to ask a question with the same initials as Win The Future, only different. I mean, how can the O-Admin project revenues for the feds of over $3.0 trillion for the fiscal year two years from now, and then rising sharply to $3.5 trillion right after that, when income currently is scraping along the bottom at under $2.2 trillion? That's a 50% increase in revenue in two years, and 75% a few years out!

Then it occurred to me: aside from the fact that Congress, in order to avoid a People's Temple scenario, absolutely needs to believe that such a thing is possible, the Treasury may have an ace up its sleeve. All that debt we're drowning in? Why not put it to work for us?

This is so beautiful it's difficult to write it down cogently, because my mind wants to race ahead to the thrilling conclusion and skip any intermediate steps. It's just that good. But one or two preliminary points: We all know by now that the Federal Reserve Bank has been indulging itself in something called Quantitative Easing for quite some time. They have bought all kinds of stuff, including well over a trillion dollars in mortgage-backed securities (MBS), but lately their focus has been exclusively on buying Treasuries in the "secondary market," primarily, naturally enough, from the Primary Dealers who in many cases did not actually "own" these "assets" which the Federal Reserve "purchased" for much more than a week or so. Using this "asset purchase program," the Fed has become the world's largest holder of Treasury "securities." (I just love all these sophisticated, reasonable, business-like terms in the context of what's obviously a huge Ponzi scheme.)

The Fed now owns well north of $1 trillion of such Treasuries, and under what's euphemistically called Quantitative Easing II, the plan is to keep "purchasing" Treasuries in the "secondary" market at least through June, at which point it will be extended again through QE 3, to QE 4, to QE n, to QE to the Moon. You may think to yourself that this is a somewhat ridiculous situation, for the "money" the Fed uses to "buy" such "assets" is simply a figment of Ben Bernanke's imagination. The "quantities" he's "easing" into existence are hallucinatory. Yet, and here's the beauty shot -- once the Fed "owns" these "securities," they earn "interest" just like everything else. Maybe the Fed "bought" the Treasuries with hallucinated money, but that doesn't mean the Fed isn't entitled to a return on its "investment." And where does the Treasury get the money to pay the Federal Reserve interest, or coupon payments, on the Fed's Treasuries? Glad you asked: from the Fed's program of Quantitative Easing. And to whom or to what is the money remitted to the Fed by the Treasury ultimately paid? Well, to the Treasury, because it's the Fed that holds the Treasury's checking account.

Are you impressed yet? I sure am. Under this program, the deeper the United States Treasury goes into debt, the more money it makes on the investments it makes by buying the debt it just created. Joseph Heller's jaw must be dropping at seeing the imagination of his creation, Milo Minderbinder, one-upped in real life. This is a can't-miss, fool-proof system for national solvency. So of course the federal government's revenues are going to go through the ceiling over the next few years. The federal government will be receiving all that money it owes itself regardless of what the unemployed taxpayers chip in, and the Treasury will be receiving all that income, just to skip a couple of confusing, irrelevant steps, from the money it creates out of thin air.

I don't see any reason the rest of the world's economies should be uneasy about the way we're dealing with Earth's reserve currency, do you? So completely straightforward, fiscally sound, and ingenious. It's one of the many ways we continue to be Exceptional.

The Greenhouse Effect & Fat Tail Distributions

http://www.youtube.com/watch?v=_j1KGHOvSkM

Somewhat unAmericanly, when I am interested in scientific data beyond my own cognizance or competence, I find myself consulting sources of information where the people writing about the subject know something, you know, about what the hell they're talking about. This is not actually a bad approach to the arcane and complicated, I find. When in doubt, read something by someone who has studied the subject thoroughly and has come to some honest conclusions about what he or she has looked into. Following such a practice, of course, can place one at odds with the predominant style of opinion-formation in this great land of ours, which might be called blowing it out your barracks bag.

For example, on this global warming issue, which has been relegated to the back burner, so to speak, I read the comments by trolls on various websites and come away with an impression, which is certainly not based on an unskewed sample (because AGW denialists, by their very nature, patrol the vast Internet looking for opportunities to wreak destruction on future generations with a triumphant display of their conventional ignorance and borrowed "gotcha" points, a current favorite being the "solar maximum" argument), and I wonder: does anyone have a simple way to explain the extremes in either direction which seem to be plaguing the world weatherwise? (Today's Secret Word, and I'm sorry Groucho Marx's bird can't drop down to reward you.)

It's been cold and snowy back East this year, although probably not a lot different from the weather which prevailed in the Northeast at the end of "a Little Ice Age" around 1970 (this period of abnormal cold also was present in New England during Thoreau's life there, as reflected in Walden's descriptions of intense cold and deep Pond freezing), so people look at all those snow-blowers and conclude that global warming is a hoax. My own surmise, which is confirmed to a degree by what I read (see above) is that the introduction of all that "forcing energy" in the form of trapped solar infrared radiation would naturally power more violent winds, more copious uptake of ocean evaporation, more of everything, and in cold weather months you would get exactly what we're seeing, blizzards and howling winds, although not necessarily record cold temperatures. All of this happens against a backdrop of an inexorably warming Earth, because there is also no doubt that year after year, the planet is setting records for "warmest year on record, warmest decade on record," et cetera.

The graph above is an elegant depiction of how this works. The bell curve of temperature has been shifted to the right by global warming, reflected as the red curve on the x-axis. The y-axis represents the distribution of weather events, with most of them clustered around the normal range, as is the case (by definition) with bell curves. Along the x-axis, under the fat tails, we can see the effect of skewing the average temperature to the right (warmer). The probabilities of events associated with abnormally warm temperatures (Australia's floods, Russia's epic heat wave destroying 30% of the wheat crop, China's wells going dry), increase in likelihood because the region of distribution (the "fat tails) has been enlarged. Meanwhile, because the average temperature of the Earth has increased on a constant basis, the ongoing problems continue at an accelerating rate (the cascading meltdown of Greenland, Himalayan and South American glaciers, the softening of the tundra, chunks the size of Massachusetts breaking off Antarctica).

It's a kind of dismal consolation, but at least this graphic depiction enables one to grasp why we're seeing the patterns we're seeing. The destruction already caused by AGW seems pretty far advanced, but one can cling to the hope that educated countries outside the theocratically-inclined United States might still organize to do something about it.

How long can bin Laden stay on dialysis?

"Archaeologists originally set the date of the scrolls at 4,000 B.C., or just after the massacre of the Israelites by their benefactors. The writing is a mixture of Sumerian, Aramaic, and Babylonian and seems to have been done by either one man over a long period of time, or several men who shared the same suit. The authenticity of the scrolls is currently in great doubt, particularly since the word “Oldsmobile” appears several times in the text..."

Woody Allen, "The Red Sea Scrolls," from Without Feathers.

No day is completely lost when you can quote Woody Allen. For reasons best known not even to me, I became curious about the current state of the hunt for bin Laden. I know that years and years ago, George W. Bush said something to the effect that "I don't really think about it that much," when asked where bin Laden was; but W never really evinced thinking about much at all, so I don't know how definitive that is. I thought there must be more to the story. After all, when you think about it, bin Laden was the occasion for Bush to use the phrase "casus belli" in a press conference. I remember the sly grin on his face when he said those words. You could tell he was pretty sure the half-wits in the press corps probably didn't know what he meant - a chance for George to throw some Latin around at their expense! I was proud of him, I really was. He overdid it when he started using the phrase again in relation to Iraq, but that's another story.

Well anyway, the casus belli for Afghanistan was a meticulously constructed argument built upon the following premises:

1. Osama bin Laden was the mastermind behind 9/11.

2. OBL lived in Afghanistan, Kandahar to be exact, and the Taliban "harbored" him, thus enabling OBL to plan "further attacks," using the Fiendish Jungle Gym Complex at his camp.

3. Anyone harboring terrorists is with the terrorists under the Bush doctrine that you are either with Bush or against him (echoing things he heard every Sunday at United Baptist: "I would that ye were either hot or cold, for if ye be lukewarm, I will spew thee out of my mouth.").

4. We must therefore invade Afghanistan, depose the Taliban, and install someone like Hamid Karzai, former PR man for Union Oil and current heroin dealer.

There may be some causal links in there confounding the "belli" part, but I think that's pretty close. Just about an airtight case, any way you look at it. Some caveats were noted:

A. Bin Laden himself denied any involvement in 9/11.

B. The Taliban, who had previously met with Cheney & others in Texas for a barbecue to discuss the construction of a Union Oil pipeline across Afghanistan (prior to W's ascension to the Bush Throne), asked for, but apparently did not receive, some sort of definitive proof that OBL was actually involved.

C. No one involved in 9/11 was actually from Afghanistan. They were all from Arab countries, principally Saudi Arabia, Egypt and the UAE, and the mastermind was probably Khalid Sheikh Mohammed, the Gurgling Confessor of waterboarding fame, who was only too glad, between swallows, to finger OBL as much as the CIA wanted. Indeed, there seems to be a substantial pesonnel overlap between 9/11 and the Bojinka Plot and the first bombing of the World Trade Center in 1993.

But what the hell do I know? I do sometimes think, however, that one problem with a certain vintage of the Baby Boom set (among whose number you can count me and W) is that we were overexposed to the Dick&Jane primers in grammar school, and as a result a kind of infantilization of logical processes took root in the cerebral cortex and has controlled our thinking ever since. This theory, again, will make people forget neither Godel nor Boltzmann but it's maybe something to think about. That list of 1 through 4, supra, is suggestive of this weakening of the analytical faculties, because, really, that list just doesn't make any frigging sense whatsoever. And when you think that we have waged a war that has lasted almost ten years on the basis of that list, then perhaps you know all you need to know about the state of the nation, circa turn of the Millenium.

Nevertheless, I got to thinking again about the Arch-Nemesis, the Mastermind, the Lex Luthor of the Neocons' perfervid nightmares: Osama bin Laden. And it occurred to me: ten years is a long time to be on dialysis in a cave in the mountains of Tora Bora. So I Googled the Dude. The consensus of opinion turns out to be that he died on December 13, 2001, in Tora Bora, of complications from acute kidney failure. Among the people holding this view are Robert Baer, the highly-quotable ex-CIA agent who is a persistent critic of America's anti-terrorist wars; former Pakistan "President" Pervez Musharraf; the aforemention Hamid Karzai; Donald Rumsfeld, when you get right down to it; Dale Watson, head of the FBI's Counter-Terrorism division; the Israeli Mossad; and lots and lots of other people. Were you aware of this general trend in thinking?

But haven't there been videos of bin Laden after December 13, 2001? Highly debatable. There is strong evidence that a "double" appears in those videos, including the famous one where bin Laden sits and discusses the fine points of the 9/11 attacks. Cynics have noted that bin Laden referred to melting "iron" in the Twin Towers, while a person trained in engineering (as bin Laden was) would have known the towers were built of steel, not iron. Plus, he appears to write something with his right hand in the video, and bin Laden was left-handed, not to mention that the person appearing in these videos is darker than OBL, with a black (not salt-and-pepper) beard, and with a broader and flatter nose.

All "9-11 conspiracy" stuff? What's harder to believe is that an abnormally tall Arab could actually make his way around in mountainous terrain for a decade tethered to a dialysis machine, with a $50 million price on his head, and not attract some attention, somewhere, somehow. Yet what is most astounding to me is why the press has never really zoomed in on this story and figured it out. Leaving aside the invasion of Iraq, which was a foreign policy aberration of George W. Bush and had nothing to do with the "war on terror," the invasion and occupation of Afghanistan is built wholly and solely on the association of bin Laden with that country. So if the guy died within a couple of months of our invasion, isn't that, you know, newsworthy? Just how lame are the Mainstream Media?

I suppose if Elvis is still alive, then bin Laden might be too. Driving around somewhere in Waziristan in his vintage Oldsmobile.

High Speed Rail & Schizo-Politicosis

http://www.youtube.com/watch?v=CMLgEnDGkG4

As I fumble my way toward my magnum opus, trying to define my topic, trying to describe the underlying connections between certain modern, media-related phenomena that have made our lives seem so alien to us...

One idea that keeps coming to mind, and I don't know how it relates to the overarching Theory of Everything, is that political discourse in America has taken leave of any lingering connection to reality in favor of an ideologically-driven style of "thinking" about all problems. As one example: as I played chess online, I listened with one ear to President Holograma's State of the Union Address. I believe at one point he voiced his support for high speed rail and talked about demonstration projects in different locations around the country. And the thought occurred to me: why don't you just build an intercontinental system? We have lots of unemployed people in the construction and manufacturing trades. We have tons of unused factory capacity, such as in Detroit (Michael Moore had the canny idea a couple of years ago that Obama ought to convert a lot of the auto manufacturing business to building locomotives and rolling stock for a national rail system, instead of propping up General Motors). Hire all those people and let's get to work. We need transportation. We need jobs. Air travel is a killer when it comes to carbon dioxide pollution. We need a way to get away from the single-auto mode of moving around.

Just build the damn thing. We must have the money, because we always find it when we need to invade the Middle East. Why can't we invade our own Midwest, say, with a high speed rail project?

It's right at this point that the insanity sets in. Immediately. First, everyone must consult their internal ideological gyroscope: is this Socialist, or is this Free Enterprise? That's the first cut. Obama must be very cautious (second nature to him) because he knows that Jim DeMint does not want anything whatsoever done that even sounds like government involvement in doing something other than building bombs. It might be better to "seed" private enterprise and just kind of hope that the private sector does it. The Obama Administration is sinking a whole $27 million into "promising" solar projects, for example. Imagine that. $27 million. And, over a very long period, $18 billion into high speed rail, if Congress will let him have the money after he's already out of office.

In China, Japan, Germany, France, Spain and the rest of the civilized world, they do not really detain themselves with ideological debates before they build high speed rail networks. It's assumed that such public facilities will require government support. They don't have to "pay for themselves." A Harvard economist named Edward Glaeser recently wrote a series of posts at the always-helpful New York Times in which he knocked HSR around because of its costs and other problems he foresaw. He used a hypothetical HSR line from Dallas to Houston for his model, which raised an immediate question in my mind: why would anyone in Dallas want to go to Houston? His hit pieces can be found here: http://economix.blogs.nytimes.com/tag/high-speed-rail/ Thanks a lot for that, Mr. Glaeser, you buzzkill. The one thing I noted, in skimming through his analysis, is that all of his estimates are complete guesswork: cost per mile of construction, maintenance cost, everything. It's a complete GIGO situation that doesn't explain anything. After reading his blog posts, I had to ask myself whether it was simply a hallucination that I rode the AVE Spanish high speed train from Madrid to Seville, or the TGV from Lyon to Paris. Did those rides really happen, or can Prof. Glaeser correct my faulty memory? How were these other countries able to build these trains and continue to operate them?

I wonder if the free market extremists, in demanding that any good new idea always pay for itself, ever consider that the federal government currently taxes gasoline sold in this country to the tune of 18 cents/gallon, and that the money in this fund is used, among other things, to maintain the interstate highway system. Why don't the conservatives demand that the highway system pay for itself and refuse to drive on the nation's roads until they become self-sustaining? Why do we have a Federal Aviation Administration? Shouldn't the planes be allowed to collide in midair rather than risk doing something so obviously Communist?

Anyway, building a high speed rail system connecting all the major metropolitan areas in this country would really be something, which is why I suppose it has zero chance of getting anywhere over the next twenty years or so. We always begin every debate over doing anything with a very long, protracted discussion about which kind of "thing" it is, socialist, capitalist, anarcho-syndicalist, and expend all of our energy in this pointless drivel confirming everyone in their ideological purity. Then we move on to the next thing we don't do.

As I say, somehow this tendency, this increasingly ingrained habit of mind, has something to do with my Overall Theory of Everything. I don't think it will make anyone forget Godel's Incompleteness Theory, but perhaps 'tis enough, 'twill serve.

A note on the unemployment rate

Various wags around the blogosphere are having a lot of fun at the expense of Hilda Solis, Secretary of Labor, and her Bureau of Labor Statistics, which some have taken to calling the Ministry of Truth with reference to the dystopian misinformation bureau in Orwell's Nineteen Eighty-Four. The latest fuel on the fire came in the form of Friday's NFP (Non-Farm Payroll Report) which claimed that 36,000 Americans found jobs in the prior month, and that as a result the U-3 unemployment rate (which is the only one the media/political class ever pays attention to) had fallen from 9.4% to 9.0%.

Since as everyone knows (because the fact is repeated endlessly everywhere you look) the United States hatches about 125,000 to 150,000 new workers each month just through the maturation of the population, many looked askance at the effect of a number approximately 1/4th the size of the average of these two numbers in lowering the overall UE rate. Some cynics then suggested that if 36,000 new workers could lower the UE rate by .4%, then a bonanza month of hiring, say on the order of 360,000, well within historical precedent for previous recoveries, should take us all the way down to about 5%, which in Darwinian capitalism (the kind we practice) represents full employment. In other words, we're almost there.

Yet that seems a little crazy. How could such a huge problem of unemployment be solved with one fairly average good month, and with such a paltry number compared to the problem? Thus, rather than being like the other guys & gals writing about this, I decided to hike on over to the Bureau of Labor Stats website and see what was going on. Is Hilda, the lovely child of Mexican and Nicaraguan immigrants, a loyal cadre of BarackObama's 2008 campaign who was rewarded for helping the O-Man with the Latino vote with a plum job in his administration despite virtually no visible qualifications for the position - is she cooking the books?

Of course not. For one thing, Hilda began as a supporter for Hillary Clinton and only started delivering La Raza for Barack when that fell through (though I was thinking, she must be quite an operator to turn on a dime like that and convince the wily Obama she was worth bringing onto his team). Hilda's a good California kid from the San Gabriel Mountains area, educated at Cal State Poly-Pomona, who worked her way up through the ranks of California state politics. It's just a guess, but I doubt that she knows anything more about statistical manipulation than she does about labor policy, whatever that might be. In general, with the notable exception of Steven Chu at Energy, there isn't much correlation between career expertise and cabinet position. It's more what the cabinet-appointees "have been interested in" at some point, such as a rancher being "interested" in the Interior or Eric "Place" Holder being "interested in" law.

But one thing I learned at Albion H. Horrall Elementary School in San Mateo, California, in the halcyon 1950's of this great country of ours was that a percentage is essentially a conversion of a fraction. 3 is 60% of 5 because 5 divided into 3 = .6. It's just that simple. So these cynics and carpers can go on all they want about the ridiculousness of 36,000 hires lowering the UE rate by .4% but it still all comes down to a matter of a numerator and a denominator. And the denominator is the Obama Administration's friend, see, because the FAQ for the BLS tells you exactly who is in that pool:

Who is counted as unemployed?

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.

Workers expecting to be recalled from layoff are counted as unemployed, whether or not they have engaged in a specific jobseeking activity. In all other cases, the individual must have been engaged in at least one active job search activity in the 4 weeks preceding the interview and be available for work...

So there you go. Now if I can do that, why can't the other wiseguys? It's right there in front of us. Hilda has delivered once again for Obama, because I can assure you that the number he's going to use is that 9.0%, not some exotic indicator like the U-6, which sounds a lot worse, and he's not going to go into a lot of detail about how the denominator for U-3 is calculated. That's how politics works in a mass-media society, a subject which admittedly fascinates me. The public, the media, everything and everyone, are simply worn down by the repetition of the residual number, in this case 9%. There just isn't the patience or the mental space in our frenetic, crowded culture, every damn time out, to go into a whole routine about how the U-3 actually got better because the economy is so uber-shitty that no one even bothers to look for a job anymore, which is the actual, literal truth, but to point that out takes time and understanding, and those things don't exist anymore. The key to effective Presidentialness, and Obama understands this, I think, better than he understands anything else (it is the whole secret of his success) is to seize the headline numbers and make them work for you because no one, ever, is going to look at anything else, and your opponents are going to battle you on that turf.

Which is to say: modern mass-media politics is not actually about reality. It is essentially, only, exclusively, about the management of perceptions. It cannot do anything about real problems because it does not engage real problems; it only engages their simulacra, their indicia, their Platonic Shadows on the Cave Walls of Reality.

Laughing at the Apocalypse

Dmitry Orlov has a new video up which is worth watching in its 1/2 hour entirety. I was intrigued to hear him echo something I wrote about a while back in these very pages, the idea that what the United States is involved in now, toying and tinkering while it verges on collapse, is not in any sense necessary or inevitable (a million electric cars by 2015! Now I see what Obama meant by Change! That's nearly 1/2 of one percent of all cars on the American road!). As a uniquely positioned nation, in terms of latitude, resources and relative remoteness, the USA has always had it within its potential to order its economy and political arrangements so that all basic human needs are met. Orlov, in fact, sounds a great deal like Thoreau when he talks in these terms, especially when he describes the "ambitious" human activities that not only are not necessary but actually detract from a worthwhile and enjoyable life. It is all these "ambitious" and grandiose pursuits, such as a world empire and the globalization of the economy, which have led to the precarious position the USA now finds itself in. The video is on Orlov's cluborlov.blogspot.com website, or here in YouTube format:

http://www.youtube.com/watch?feature=player_embedded&v=zrz5ucQACo8

I'm always amused by Dmitry's deadpan, phlegmatic delivery, which makes Noam Chomsky seem like an ADD sufferer by comparison. The contrast of style with Orlov's subject matter could not be more stark. Who else could calmly discuss a die-off of 5/6ths of the world's population and a reversion of human civilization to hunter-gatherer status without ever betraying any angst? Only Dmitry, I think.

He has obviously thought very deeply about the subjects of global warming and peak oil, and the basic problems he outlines are impossible to rationally dismiss. The calm denial of the human race in the face of what's coming is not so surprising, of course, since it is that attitude which has allowed the problems to go past the point of no return. I agree with Orlov that we're now in the adaptive rather than ameliorative mode. When you get right down to it, that's just how mankind rolls.

Welcome to the Midway

Something in a comment on a Zerohedge post rocked my thinking: the United States government is now in a position where it needs to borrow one-half trillion dollars every three months just to stay in business. One arrives at this conclusion by considering that the official deficit is $1.5 trillion, which is the difference between tax revenues and federal outlays, and then noting that the national debt grows by $2 trillion per year, reflecting that the Treasury must also borrow money in order to pay maturing (rollover) obligations coming due, with Niagara-like relentlessness, on an ongoing basis.

When you think about things like that, you begin asking yourself: Does America even have an economy? We may, in fact, have entered a period which one could call the Postmodern Economy, one in which almost all income-producing activity is accomplished by illusion and sleight-of-hand. The fiscal position of the U.S. government, in this sense, is simply illustrative of the underlying reality, or lack thereof. America has become completely dependent on its status as the printer of the world's reserve currency. That is not only our ace in the hole, it is our entire hand at this point.

Consider that the Federal Reserve Bank is now the single largest holder of Treasury debt in the world, bigger than China, bigger than Japan. This fact alone must cause a thoughtful person to wonder just what the hell is going on. How can the Federal Reserve Bank, which is the bank where the Treasury Department maintains the U.S. checking account, and is in some ways the alter ego of the Treasury Department, also be a creditor of the U.S. government, especially when the Federal Reserve Bank is also the entity responsible for creating U.S. money in the first place? How can an entity which creates money at will for the debtor become a creditor of the entity which it creates the money for?

Add to this observation that the "debt" which the Federal Reserve Bank holds is "purchased" by the Bank with money which it creates out of thin air. The Permanent Open Market Operations (POMO) of the Federal Reserve are illustrative of the shell game methods by which this is accomplished. The Treasury auctions off bonds of a certain duration. Among the participants in such auctions are the Primary Dealers (PDs), a group of 18 banks and broker-dealers which are required, in order to avail themselves of the many benefits of being in the In Crowd, to participate in such auctions. Let us say that the PDs take down about 50% of the total auction, and let's say the total auction equals $15 billion. Thus, Goldman Sachs, JPMorgan, Bank of America, et al, pay in $7.5 billion. A short time later, often the next week, the Fed conducts a POMO in which it goes into the "open market" and offers to buy back the same Treasuries which were just auctioned off. The PDs then regurgitate a significant fraction of the bonds which they just bought back at the Fed, often selling at a premium, functioning, I guess, as some sort of reward for their cooperation in keeping the shell game going.

Where does the Fed get the "money" to "buy" these Treasuries from the (very) recent purchasers? It creates the money out of thin air. Now ask yourself a simple question: is there a material difference between what just happened and the Treasury simply buying its own debt? One might point out that the Fed has only purchased a "fraction" of the just-sold bonds. True, but that's for each POMO operation, and the Fed just keeps buying, with at least $600 billion planned for the latest go-round of Quantitative Easing. Another question is equally obvious: would the PDs, the Kool Kids on Wall Street, even bother with these ultra low yield instruments if they did not know the Fed was planning to buy them all back, plus a kicker, in the next week or so?

The Treasury's ability to raise money through bond auctions, in other words, is heavily subsidized by the actions of its own bank in creating an immediate secondary market for the stuff it sells, and that bank, the Fed, creates the money for the secondary market by hallucinating it into existence.

We do not need to be detained by shell games, since we are innocent bystanders not directly involved in this conspiracy. We can collapse the process and simplify terms, using Occam's Razor to avoid the multiplicity of entities involved. If we simply equate the Fed to the Treasury and call it the TRED, for example, then we can see that what is really happening is that the TRED, or the Treasury itself, is creating the money to buy its own "debt" to a significant fraction of the total debt issued, probably at least on the order of 50%, and this fraction is increasing. Thus, while Ben Bernanke has sworn under oath that the Federal Reserve would not monetize debt, this, in fact, is exactly what the Fed is doing: it is monetizing America's huge, gaping deficits by printing money and running it through a complicated shell game to conceal just how close we are to the abyss, and to hide the very scary truth that no natural, realistic market for American debt exists at any interest rate which the country could afford to pay for the amounts of trash we need to issue to keep the game going.

An organic, actual economy, of the kind the United States once had, where Americans had real jobs and made real money, and sold actual stuff to foreign markets, and where large percentages of the American populace were engaged in productive activities such as agriculture and building cars and fabricating steel, produces a tax base which allows the federal government to function more or less in balance with the underlying activity. That American economy is gone, hollowed out by globalization and the impoverishment of the populace. About 47% of the American working age population actually has a real, full-time job. All kinds of games can be played with metrics such as U-3 and U-6, with its many categories of part-time, marginally attached, discouraged, etc., but those figures are strictly for the election cycle and for the economics departments of universities with close government connections. They do not reflect the underlying reality in the country. Close to 50 million Americans receive food stamps so they can eat. That is about 16% of the entire population.

Anyway, I think I answered my own question.

Strike Two for Obamacare

Judge Roger Vinson's opinion in the Florida case striking down the Obama health care law is a far more serious problem for the Democrats than the previous district court ruling in Virginia reaching the same result. No doubt the case of McCollum vs. Dept. of Health & Human Services was helped along by the forum shopping available to state actions. The Florida Attorney General chose Pensacola, in the Redneck Riviera, as the venue and probably hoped that Judge Vinson, a Reagan appointee, would wind up with the case. All of this went according to plan.

McCollum (wasn't he one of the lawyers who appeared on TV regularly during the Gore-Bush Florida thing?) was joined by 25 other states in challenging the constitutionality of the law. Most of those states are among the group you would expect to join Florida, but there were a few surprises, such as Maine and Washington. The challenges to the law were fairly sophisticated; in addition to the Zen-like question framed in the Virginia case, is the not doing of something an "activity?", a second argument, which I think is actually more compelling, was involved in the plaintiffs' complaint. Namely, if you force the states to expand Medicaid (as the act does) by expanding the boundaries of poverty to include those not currently eligible for Medicaid, but do not provide the funding for the expansion, is Congress engaging in unconstitutional coercion of the states in violation of the Tenth Amendment (the "states' rights" Amendment). I wondered about that myself. Bush's No Child Left Behind program suffered from the same problem - a massive mandate from Congress impinging on local budgetary decisions about schools with no earthly way to pay for it all.

Judge Vinson essentially passed on the "coercion" argument and stated that at the present time it's not possible to tell whether the states will ultimately benefit from Obamacare or go broke trying to comply. Since he was ruling on a Motion for Summary Judgment (a proceeding without a formal evidentiary trial), he gave that one to the DHS on a TKO.

As to the Zen koan, however, Judge Vinson was much more thorough and scholarly than the earlier Virginia judge, and cited numerous Commerce Clause cases which dealt with the "activity-nonactivity" dichotomy involved in Congressional authority to regulate. Essentially, as I read his long, 78-page opinion, Vinson essentially forced the DHS and the U.S. Government to admit (and remember, the U.S. team is ultimately headed up by Eric "Place" Holder, perhaps the most passive Attorney General in the history of the Republic) that there are no cases where Congress regulated what is so clearly a "non-activity" or a "non-decision," and he did a very good job (bordering on masterful) of making ridiculous the DHS's strained efforts to demonstrate that not buying health insurance is an "activity," or that the "activity" can be supplied by Congress fining or penalizing someone who chooses not to buy health insurance. Vinson pointed out that if the second criterion worked under the Commerce Clause, then Congress could regulate anything so long as they attached a penalty to not doing it. Touche, with or without the accent.

Since Judge Vinson found that the plan can't work at all without the individual mandate to buy insurance, he declared the entire law unconstitutional (nonseverable, in law-speak). This again is an extension of the previous ruling against the DHS.

I would say that in some ways the ruling opened my eyes. I did not realize on what shaky Constitutional grounds those hacks in the Democratic Party were operating on in coming up with this massive gift to the insurance industry, the individual mandate requiring the purchase of a private commercial product from a private corporation on pain of a federal penalty. It turns out they were venturing into the unknown in their craven desperation to avoid confronting the real and obvious solution: a single-payer system where you just get rid of this whole merciless, stupid idea of profiting from the illnesses of American citizens.

As I said before, who knows what the Supreme Court will do with this thing? Scalia is a "strict Constructionist" so he might favor a narrow reading of the Commerce Clause. Chief Justice Roberts and Justice Alito are corporate stooges who probably like the idea of an expanded market for their friends in the insurance industry. Thomas will do what Scalia does. The rest will probably be pro-government, except not necessarily Justice Anthony Kennedy, who will decide the fate of Obamacare, as he decides the fate of every big decision divided along partisan lines. It all depends on what he has for breakfast the day the case is decided.

9 on a scale of 10 sphinxter response

http://www.youtube.com/watch?v=kHngF_b3NuE&feature=related

First, an updating of the Riddle of the Sphinx: what walks on four legs in the morning, two legs at noon and struggles on three wheels as it fights for lift-off in the afternoon? Answer: Hosni Mubarak, as a child, as an adult and then as a deposed dictator trying to flee in his Lear with most of the country's gold reserves.

With that out of the way, about this situation in Egypt: first, it's damned inconsiderate of the Egyptian masses to carry on this way because it forces the U.S. government to come up with some way to make glad noises about freedom, self-determination, et cetera, while hoping against hope that in some way or other we can keep our corporate-friendly thug in power so the real business of America, business (Calvin Coolidge said that, I think, or maybe it was Hoover) can proceed as planned. I watched the outgoing Press Secretary, Robert Gibbs, writhe and squirm for about a half hour yesterday trying to find different ways to say "we're monitoring the situation," including "monitoring closely," "following the situation closely," "in regular contact with the situation," and other similar filler. Nevertheless, no one seems to think Hosni is going to survive this uprising, so Egypt's version of Dr. No, Mohammed El-Baradei, is being warmed up in the bullpen so we have someone we can control when the dust settles. You'll recall Ahmed Chalabi, Iraq's embezzler/carpetbagger/Friend of Cheney, who was going to be installed by the Neocons after the fall of Saddam. The best laid plans of mice & men aft gang aglay...

This thing with Mubarak is pretty dicey. You can probably recall President Barack Holograma's speech in Cairo a couple of years ago when he limned the sorry tendency of America to be on the wrong side of history in the Third World, usually siding with the resident Thugocracy instead of the uncontrollable masses. Thus, going with the Shah in Iran instead of their constitutionally elected president, pulling the same trick in Iraq before Saddam, and like that. I remember Charles Krauthammer, he of the train-tunnel-sized nostrils and haughty manner, questioning in the Washington Post whether Mr. Obama was actually fit to be President when he harbored such anti-U.S. sentiments. Now the Egyptians themselves, the very people the O-Man was talking to, are presenting a test of the sincerity of the statements therein expressed.

Iraq was easy compared to this. George W. Bush could sincerely celebrate "freedom on the march" there because Saddam was seriously contemplating getting into oil deals where the euro would replace the greenback as the reserve currency for settling Iraqi petroleum sales. This little move threatened the very lifeblood of American hegemony. Almost any puppet regime, and most certainly Dr. No, a sympathetic crook, was preferable to letting that trend gain traction. Plus, W reasoned he could go the prissy GHW Bush one better by finally toppling Saddam once and for all, and with that cakewalk under his belt (sorry, that's a mixed metaphor worthy of Thomas L. Friedman - well, it is Sunday, and there's no Tom to read because of his book leave) W's reelection would be assured. Imagine W's consternation when it almost cost him the whole deal, but fortunately, George was running for reelection in the United States of America, where scarcely 40% of the populace believes in science. So how hard was it to convince about 79% of them that Saddam had personally planned 9/11 on his Compaq Presario? More cake under W's Lone Star belt buckle. (If Friedman doesn't come back, I think I'm ready to take over.)

Back to the Land of the Pharoahs. Egypt presents a different kind of Pyramid Scheme from the one the Wall Street gangsters (and the U.S. Treasury) have perfected here at home. As the Egyptian riot police fire American-made rubber bullets and American-made tear gas cannisters at the rebels (all this ordnance helpfully stamped with its place of origin, the better to display on Al Jazeera), Obama and his team of corporate insiders feverishly look for just the right way to remain publicly noncommittal while quietly hoping that Egypt, home to half the world's Arabs, settles back into a nice, quiet, dependable tyranny, where a friendly guy who manages to win 99.9% of the vote every few years, and has been doing so for 30 years despite the overwhelming opposition of the electorate, can find a way to hang in there until this whole thing blows over, the way it did in Iran. Because now things are beginning to heat up in Jeddah, and while losing Egypt to democracy could probably be folded into our globalist scheme, the idea of the Ghawar reserves, the longest-tusked of all the Elephant Oil Fields, falling into hands other than the bony grasp of the gerontocrats who rule Saudi Arabia (described by one Berkeley prof as "less a country than a family-owned filling station")...is just too much to bear. The world is at oil equilibrium about now, no doubt we're at peak, and any sizable disruption (and the Saudi contribution would certainly be that) would expose the terrible miscalculation of the federal government in not switching to a non-oil-import paradigm for American transportation a long, long time ago...about when Jimmy Carter gave his famous speech about energy independence.

Things could get very interesting indeed if that happens, and it probably will. Do we then invade Saudi Arabia to save a dictatorship? If we don't, are we all going to wind up walking...like an Egyptian?