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.

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.

Famous Mea Culpas of Western History

(Washington-) Facing a firing line of questions from Washington lawmakers, Alan Greenspan, the former Federal Reserve chairman once considered the infallible maestro of the financial system, admitted on Thursday that he “made a mistake” in trusting that free markets could regulate themselves without government oversight.  A fervent proponent of deregulation during his 18-year tenure at the Fed’s helm, Mr. Greenspan has faced mounting criticism this year for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses partly led to the current financial crisis. (New York Times, Oct. 23).

 (Sodom-Gomorrah News Dispatch, 4000 B.C.) – Lot’s wife admitted today in an interview that she made a “huge mistake” in turning for one last look at the Twin Cities.  “It’s not like I wasn’t warned,” she said, speaking with difficulty given her current condition (a crystalline column of sodium chloride).  “God said not to look, but I did.  It’s all there in Genesis 19. It's tough to go from being a pillar of the community to a pillar of salt because of one screw-up.”

(Rome Clarion, 64 A.D.) – Nero, reached today at his villa on the Palatine, candidly admitted that he should have picked a better time to practice the violin than during the Great Fire.  “What was I thinking?” said the Emperor.  “Romans have a right to expect more from their leader than a guy who works on some fiddle tune while the Imperial City goes up in smoke.”

 (Le Monde, Paris – Oct. 16, 1793) – Marie Antoinette, interviewed while riding a wagon on the way to the guillotine, told reporters that “public relations are a lot more important than people sometimes think.  The ‘cake’ thing was a serious gaffe, I can sure see that now.”

 (Big Horn Bugle, June 26, 1876) – General George Custer, head of the U.S. Cavalry’s 7^th army, admitted today that he probably “grossly underestimated” opposing forces in the battle against a Cheyenne – Northern Lakota alliance near the Little Big Horn River in southeastern Montana.  “Wow,” said the blond Indian fighter.  “Sitting Bull’s got, what?  Two thousand braves?  I’ve got maybe 300 guys.  You can’t like my chances. I blew this one, big time.”

(Berlin Zeitgeist, April, 1945) – Adolf Hitler, reached by telephone in the besieged capital city of Germany, spoke above the roar of incoming Soviet artillery, plainly discernible even in his deep bunker.  “I screwed up,” Der Fuhrer said.  “I really shouldn’t have started this whole Third Reich thing, or the Second World War, or the genocide. I made some big mistakes, there's no getting around it.”

Oscillating Around the Flatline of 9,100: The Dow Considered

The Dow appears to be oscillating around a number close to 9,100, and since I'm not Nostradamus (although I've seen his birth house in St. Remy, South of France), I wonder why this number should be so close to my prediction quite a few months back. First, the Buddhist Question: what is the Dow? (Ugh, lousy pun, as Stan Freberg has Tonto say in his classic send-up, "The Lone Psychiatrist.")

"To calculate the DJIA, the sum of the prices of all 30 stocks is divided by a divisor, the DJIA divisor. The divisor is adjusted in case of splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. The initial divisor was the number of component companies, so that the DJIA was at first a simple arithmetic average; the present divisor, after many adjustments, is less than one (meaning the index is actually larger than the sum of the prices of the components). That is:

."

Deeply satisfying, isn't it, to understand something down to fine-grain detail? Especially when there's a sigma sign and everything. The stocks in the Dow are the powerhouses of the American economy such as Microsoft (which, paradoxically, is traded on the NASDAQ), McDonald's, Bank of America, JP Morgan, United Technologies, Home Depot, Fed Ex, etc. Just think of the advertisers for the Super Bowl and you'll come close. So while there isn't quite the congruence of an index such as the Wilshire 5000, which includes practically all stocks for which a public market exists in the USA, the Dow tends to reflect the fortunes of the overall business world to a fairly accurate degree. It's not really an aggregation of "industrial" companies anymore, since the U.S. isn't an industrial country. But nice for old times sake to include the adjective in the name.

The Dow is famous for "pricing in" future trends; thus, the stock market is way ahead of the general "real" economy. The street-smart guys who know all the angles (viz., Woody Allen: "Manhattan") can see a recession coming from a mile away. So the shills on CNBC, for example, who sit patiently waiting for the big turnaround, wondering if this is the day the Dow will soar back up to 14,000, are just the sidewalk barkers for the girly show inside. They're trying to get you to put your money back in so the street-smart guys can play some more games with your capital. The distasteful alternative is to put their own money in, and they know that's a fool's errand.

So what I think is that the convergence between my guess and what's actually happening is that the Masters of the Universe (viz., Tom Wolfe: "The Bonfire of the Vanities") run much more complicated algorithms and models of the economy, but that the values and variables they use tend to aggregate in the same general direction as my more simplistic approach of saying that an economy which relies on consumer spending for 70% of its action will fall 35% if half the money available for spending is taken out of the market. That is to say, if Americans have to rely on their actual wages and earnings, as opposed to borrowing against appreciating capital (the housing stock), we're in deep trouble.

For that reason, it occurred to me that the so-called "subprime crisis," as an explanatory thesis, was a case of putting the cart before the horse. The economy did not tank because a lot of people were defaulting on subprime mortgages which backed mortgage-bundled securities. The economy tanked because we had reached the point in our colossally over-leveraged lives where the ability to own a shelter or to maintain the lifestyle propping up the frenzied consumer economy could not be sustained. This is a subtle difference, but it shifts the locus of responsibility dramatically. The "subprime crisis" was simply the last gasp of Consumerism, the final gimmick to keep the whole thing going for a while longer.

The chart in the upper left tracks the profligate ways of America over the last 50 years. The Greatest Generation did things somewhat differently; they saved money, bought modest houses, lived within their means. In 1957 (in constant dollars) the per-person load of total U.S. debt was about $30,000. That included the national debt, state and local government debt, business debt, total household debt. This last figure (mortgages, accounts payable, auto loans, credit cards) was a manageable 40% of total national income or GDP. There was excess cash, in other words, providing a pool of capital. Look at that trend line for 2007 for the same metric (blue line): total household debt now soars above 120% of total gross domestic product. We're in hock up to our eyeballs.

There you have the gist of the story. I think what happened over the last thirty years or so is that American political leadership simply got bought off by lobbyists, many hired by industry groups in that same Dow club. They were making good money keeping things as they were. No one proposed any sort of "radical" new paradigm for energy usage, habitation, agriculture, environmental policy, or any alteration in the basic premise of the economy: America as a patchwork of suburban developments situated between strip malls, big box stores and fast food joints, with everything accessed by outlandishly huge private autos. One president, Jimmy Carter, made noises about a serious change in energy usage and got thrown out of office. There were plenty of voices as long ago as three decades who were sounding consistent warnings about where all this would end up. Barry Commoner, for one, and Wendell Berry and David Brower. Yet the levers of power were owned by Big Business reps and oil men, like George W. Bush and Dick Cheney, and even the "populist" president, Clinton, received his economic input from Wall Street mavens like Robert Rubin of Goldman Sachs. Their fortunes were invested in the status quo ante. Gasoline, oil, natural gas, coal, defense spending and gargantuan waste, a nation where 5% of the world's population used 25% of all energy. All of it was a demonstration of the normative tendency of the factual: whatever has come to be seen as the dominant paradigm achieves an inertia that is almost impossible to budge without a crisis that demands adaptation.

And so now we have it. Characterizing our problems as a blip, a brief "discontinuity" caused by the "subprime meltdown" is, to my way of thinking, a ridiculously off-tune diddy we whistle as we pass the graveyard. Naturally, Chairman Bush, as he nervously stands at the podium for another in an endless series of hortatory sermons about the crisis, tells his little morality tale about how there were loans once that got put into bonds and the bonds went bad and the economy went splat. In his uncomprehending eyes and scared little boy face you can see he doesn't know whether he should believe it or not. He shouldn't and neither should you. Remember there was a long spell between the Crash of 1929 and the bank runs of 1932, which really brought on the depths of the Depression. The Dow, then as now, priced in the future. The future, as Chairman Bush would remind us in one of his fortune cookie moments, is still ahead of us.

The Ungrateful Nouri: Rope-A-Dope

I was startled last Wednesday night when John McCain stated confidently, at one moment in the debate, that the United States was “close to” a Status of Forces Agreement with Iraq.  Further, Barack Obama said nothing to the contrary.  Now don’t get me wrong, of course.  Pride in my “reading” of Nouri’s game-playing must take a back seat to the diplomatic advantage of…keeping our military in Iraq for another three years?  Okay, it’s not clear whether we should be rooting for the “sovereign” government of Iraq or for our own feckless ambassadors, who appear to be in over their heads.  I was virtually certain that John McCain’s opinion meant nothing, whatever else might be said.  He’s still wondering whether that Prague Spring thing has worked in Czechoslovakia.

Then this news last weekend:

BAGHDAD — Hopes that a security agreement between Iraq and the United States could be concluded swiftly receded Sunday as several of the leading Iraqi political parties, including some that had negotiated the agreement, appeared to back away from quick approval.

In a public statement posted on semiofficial government Web sites, the United Iraqi Alliance, which represents several powerful Shiite parties that back the government, said it could not endorse the pact as written and wanted amendments. It formed a committee on Saturday to survey alliance member opinions.

More details emerged on Tuesday, October 21:

BAGHDAD (Reuters) - Iraq demanded changes to a draft security pact with the United States Tuesday after it failed to win the support of its political leaders despite months of painstaking negotiations with Washington.

The announcement effectively reopens negotiations which had led last week to the unveiling of a draft that would require U.S. forces to leave Iraq by the end of 2011. The objections appear to be about details rather than the broad thrust of the pact.

Those details?  Well, it’s that jurisdictional thing: can the Iraqis try American soldiers for “serious crimes” committed in off-duty hours?  I’m sorry that I didn’t add the word “brave” as an adjective in the last sentence, as is always done in the House of Memes & Tropes, so let me amend that: can the Iraqis try our Brave American Soldiers® in Iraqi courts?

How significant a provision is this?  Very, as it turns out.  While American news outlets go light on the coverage, we’ve been having a helluva time in Okinawa over the last decade or so.  Take this story from February, 2008, concerning another SOFA agreement covering that Japanese island which does provide for local jurisdiction:

“Condoleezza Rice, the US secretary of state, apologised yesterday for a string of crimes involving American troops based in Japan, amid warnings that failure to improve discipline risked damaging relations between Washington and one of its closest allies.

"Resentment towards the US military presence erupted this month following the arrest of a marine for the alleged rape of a 14-year-old girl on the island of Okinawa, home to more than half of the 50,000 US troops in Japan.

"Since then, US soldiers on the island have been arrested for trespassing and drink driving, and another is being questioned about the alleged rape of a Filipino woman in a hotel room.

"The rape allegation has echoes of the 1995 gang rape of a 12-year-old girl by three US servicemen, which brought 85,000 people on to the streets in protest and international attention to the US base…The Japanese prime minister, Yasuo Fukuda, called the alleged rape "unforgivable" and Shigeru Ishiba, the defence minister, warned that it could "shake the foundations" of the Japan-US alliance just as the two countries were cooperating to try to end North Korea's nuclear weapons programme.

"In an attempt to limit the diplomatic fallout, US military authorities imposed a 24-hour, indefinite curfew on 45,000 military personnel and their families, including the 10,000 who live off-base. They also agreed to review anti-sexual assault guidelines and improve education programmes for newly arrived service personnel…Critics said previous attempts to improve conduct had failed.”

That story was carried by the London-based Telegraph last February.  You may have missed it.  In Okinawa, the presence of the U.S. garrison is an ongoing crisis; yet compared to Iraq, the situation for the Brave American Soldiers® is considerably more “normal;” note the quarantine of the military and confinement to bases along with their “families.”  In Iraq, by contrast, the situation for the troops is a great deal weirder, with soldiers stranded for years on end in repeated deployments, away from home, away from normal female companionship.  We must add to this toxic mix the fact that the U.S., in order to meet recruitment goals for a worn-out army, has lowered its standards to include a small but significant fraction of soldiers with criminal records.

Thus, all the pieces are in place for a true international nightmare: a sociopathic Brave American Soldier®, with a violent history of assault, rapes and kills an Iraqi woman in Baghdad after getting roaring drunk in a local bar.  He’s arrested by Iraqi police under the SOFA provision for “serious crimes” committed intentionally.  Now what?  The fate of this soldier would be seen as the final, intolerable indignity visited upon the American “liberating” force.  This story would make the nightly news and inundate the Internet.  In general, the American public, recalling the kangaroo proceedings for Saddam Hussein, would be absolutely outraged and up in arms.  Mitigating factors (the sex was consensual, it was a trap, etc.) would be discovered or manufactured.  The idea of an armed invasion of the prison or court to free the soldier would be debated and maybe set in motion.

My guess is that the Ungrateful Nouri has already “priced in” all these considerations, as they say about the stock market.  It’s a No Go Zone for the Department of Defense; not even Bush’s delicate ego justifies running this kind of risk.  A Japanese court seems sort of civilized and Western; a court run by mullahs reminds Americans too much of “Midnight Express.” And so Nouri, keenly discerning the discomfort level of the American negotiatiors about conceding this jurisdictional point (routinely done in other SOFA arrangements) when dealing with this partiuclar Muslim nation, lets the clock keep running toward December 31, when our "legal cover," as he calls it, is blown.  A ragged, fitting denouement to a misbegotten war.

 

Congress of Memes & Tropes Takes On Mathematics of Economics

Personally, I think it's one of my better titles.  I think, in fact, that Memes & Tropes would make good new names for the two major political parties.  Somehow "Memes" sounds friendlier, so I would assign that to the Democrats.  McCain is the nominee of the Tropes.  Sounds right, don't you think?

Anyway, the inability of the political system to admit the truth or to adopt real solutions to real problems has become a fascinating subspecialty of mine.  I wish some major university would offer it as a course of study.  Maybe one has.  It's clear that the Depression we're heading into will be made significantly worse by the collective denial we experience at the hands of our elected representatives, who can only respond to grave national crises in certain ways that (a) always affirm the very economic system which has led to the current disaster and (b) always propose to solve the problem with solutions that make the problem worse.

The essential dilemma is that, as a consumer society, America is toast.  This can be demonstrated any number of ways, but perhaps none does it so elegantly as Jeremy Grantham (even his name is elegant).  Here's how Jeremy explains how we arrived at this Point of No Return: 

"We were all spending... as if we were much richer than is in fact the case. Particularly here in the U.S., increasing household debt temporarily masked some of the pain from little or no increase in real hourly wages for 20 to 30 years. Household debt since 1982 has added over 1% a year to consumer spending. Unfortunately, this net benefit does not go on forever.

"In the first year in which you borrow 1% of your income, the interest payment barely makes a dent and your spending is close to 101% of your disposable income. But each year you borrow an incremental 1%, your interest load grows. After 15 years or so in a world of an average 7% interest rate, the interest on the accumulating debt fully offsets the new borrowing when one looks at consumers collectively."

It takes a while, of course, to comprehend precisely what Mr. Grantham is saying, or at least it does if your grasp of mathematics is on a par with mine.  But the essential idea is pretty simple. America's prosperity over the last 30 years or so has been financed by increases in household debt which fuel consumer spending.  What we "forgot" was the effect of compounding interest: money borrowed must be paid back with interest, and if you borrow more money to pay the principal and interest, you increase the total interest paid until the interest being paid collectively by the society offsets any "prosperity" from new borrowing.  If you go a little past this point, you crash:  you finally reach that entropic impasse where your collateral is exhausted, your wages are tapped out, and you can't borrow any more money at all to pay even the interest. 

The "leadership," instead of touting the wonders of the "Ownership Society," should have been pointing out this problem for a very long time.  That's not what the Ms & Ts do, however.  What we're now stuck with is an economy which functions, to the tune of 70%, on consumer spending. The Memes blame the oligopoly, of course, the Fat Cats who have gotten rich at the apex of the Ponzi Pyramid, and indeed these miscreants deserve all the opprobrium we can glare their way.  The Tropes blame, I don't know, the cycical vissicitudes of the economy: kind of nobody's fault.  The truth is that it was a dumb system with no future other than the one we're beginning to experience.  However, this is not acknowledged at all in M&T Congress.  The Memes argue for another "stimulus package," which takes the form of sending the taxpayers their own money with precatory pleading that they resume going to Home Repo and Bed Bath & Bankruptcy.  The Tropes favor a top down approach which keeps their CEO friends in their 4th and 5th homes on Jupiter Island and the Bahamas.  Neither side wants to admit the awful truth: this thing just doesn't work anymore.  There's going to be a world of pain and misery while we struggle through to something else.

Whoever is elected in a couple of weeks will inherit this crashing system.  It will bring about major changes in America's foreign policy, for one thing.  We will be glad, for example, that Nouri al-Maliki played as many games as he did about an agreement to keep the U.S. in Iraq - that can be our exit line.  The UN's disenchantment with Afghanistan will give us another way out of a wasteful extravagance.  I suspect that the government will undertake a massive public works program here at home to replace the millions of jobs that are going to be lost in the service economy: rebuilding schools, roads, overpasses, railroads, airports as the "labor force" bails out of all the Starbucks franchises and tanning salons.  But it's going to be very rough for a long time, and the rebound, whenever that happens, will not be the result of a "cyclical" resumption of Casino Capitalism but through fundamental changes.  Something which the Memes & Tropes seem organically ill-suited to oversee.

The Insane Campaign of John McCain

So who's right, the progressive optimists who claim Barack Obama will win in a landslide?  Or those "realists" who contend the race will tighten over the next two weeks and produce a squeaker?

I don't really know, of course.  My own "cohort," American white males, are a profoundly conservative bunch who tend, more than any other group, to vote according to a knee-jerk conservatism. They're almost embarrassed to think too much.  This was George W. Bush's great source of support; that, and the corrupt "base" of the ultra-rich who simply liked his flat tax ideas and complete indifference to regulation.  American militarism sells because it harks back to the robust days when we solved all problems by sending in the Marines.  That's still what we do, it's just now a lot of us (the "Europeanized" among us) recognize it doesn't work.  The wars in Afghanistan and Iraq were both supremely misguided, knee-jerk reactions to the national paranoia concerning Muslim extremists.  Neither war will do anything, ever, to tamp down the problem of terrorism, and the CIA suggests the wars, in fact, have made things demonstrably worse. Those are what we quaintly call the facts. Yet the wars served their purpose, a great catharsis for a declining power.  Our military attacked vastly overmatched countries with large Muslim populations, killed a lot of people and installed governments which may or may not be to our liking in the long run.  It doesn't really matter that these "wars" bear no resemblance to the principles underlying the John Wayne movies about World War II, where we were legitimately using our military to defend the world from Fascist tyranny.  The "optics" are sort of the same, and in the TV age, and with a non-discerning, increasingly poorly-educated populace (33% of the kids no longer graduate from high school, Colin Powell told us today on "Meet the Press"), that's more than enough.

John McCain knows all this.  The one thing this mediocre guy has figured out is that American politics is, first and foremost, about imagery.  You don't win with "ideas."  If you did, George W. Bush would never have come within a thousand miles of the White House.  Half the people will vote for you in this country if you seem like a tough father figure who will beat up the bad guys. Then you need a few thousand more votes and you win.  The other half of the country (disproportionately represented by women, who are less swayed by the John Wayne and Chuck Norris stuff) are more divided among themselves, as one might expect among the "cerebral" part of the country.  In this demographic you find all the people who think the whole system is rotten, that one party is as bad as another, who have unique and idiosyncratic takes on American democracy, who belong to a very narrow group of special pleaders.  Organizing this part of the country, as Barack is trying to do, is like herding cats and shoveling smoke. 

The Daily Kos tracking poll paints the picture.  Among all males, McCain leads 48-44.  Among all white males, McCain leads 54-38.  Look at that second number: it's not even close.  It's a blowout.  When we picture America, we see a white male because the President is always, always a white male.  So when McCain, who's not a "maverick" but more a standard issue John Birch Society avatar, and as generally insincere and corrupt as most members of his profession at the national level, rails on about "William Ayers" and questions who Obama "really" is, he is, of course, playing to that jingoistic optic.  How can a President, a Commander-in-Chief, be John Wayne if we're not even sure he's on our side?

The pundits, citing dubious polls, argue that this approach "backfires."  Bullshit.  It works and always has worked.  Most of the American electorate do not compare and integrate the incoming media images with reference to a fixed inner position arrived at by a careful consideration of "issues" and America's economic and political situation.  There is no such locus of definite judgment for most people.  Don't pretend you don't know what I mean.  When you head down to Home Depot and watch all those elephantine Americans waddling down the aisles with blank faces, keep in mind that many of them will be voting in a couple of weeks, and consider how many of them understand the difference between Obama's medical insurance program and McCain's $5,000 tax credit idea.  

The country has been in economic decline since the early 1970s.  One way of reacting, what we snobby "elites" think of as "enlightened," is to think about ways to change things, to reconfigure the economy, to "redistribute" wealth by employing ourselves in money-making pursuits with a broader democratic base.  Another way to react is the one which Hitler galvanized into the basis of his short career.  When McCain & Palin barnstorm the country whipping the masses into a frenzy about "Country First" and being in places which are "more Pro-America," they are, of course, playing to this nationalistic angle. Ein Volk, ein Land, ein Reich!  A depressed and demoralized populace can turn to anger and resentment as one way out of the frustration.  We've still got the world's mightiest army, we can still blow the hell out of anyone who gets in our way with our nuclear arsenal.  Maybe we shouldn't be electing some epicene, slender black/white guy who seems sort of like an intellectual from French Equatorial Africa.  Maybe this other guy -- scarred, angry, broken, pasty all-white from his hair to his pallid skin -- one thing we know about McCain, if he gets to the Oval Office, he'll use all those bombs and weapons.  There'll be more war!  No one will push us around!

Alas, his campaign is not insane.  It's American, same as it ever was.  How tight will it be?  I don't even want to guess.

McCain's Scumball Moment: The "Health" of the Mother

McCain is such a wiseass that he's virtually certain to get himself in trouble whenever he strays from scripted phrases.  I imagine even his most devoted handlers cringed on Wednesday night when Johnny Mac flashed that ghoulish, creepy grin (kind of like a Jack-O'-Lantern with its mouth closed) and made air quotes of the phrase "health of the mother" in ridiculing a vote of Barack Obama regarding late-term abortion in Illinois.  Intellectually insecure guys like McCain use sarcasm and superciliousness to compensate for a basic inability to grasp subtle arguments because they're fundamentally incapable of discussing details of policy questions. McCain thinks that if he chortles and rolls his eyes we'll get the idea what Barack Obama is saying must be flawed. The real reason McCain operates that way, however, as his academic record shows, is that McCain is just not very bright.  He's bound to go off the rails and look like a dunce if he chooses to argue constitutional law with a constitutional law professor.

So what was McCain trying to ridicule with his air quotes?  He was trying to laugh off the Supreme Court decision by Justice Harry Blackmun in Roe vs. Wade, where Blackmun carved out an exception to the general ban on criminal laws against abortion as follows:  

"(c) For the stage subsequent to viability, the State in promoting its interest in the potentiality of human life [p165] may, if it chooses, regulate, and even proscribe, abortion except where it is necessary, in appropriate medical judgment, for the preservation of the life or health of the mother."

So where the fetus is viable (can live outside the womb), the State has the option, if it chooses, to ban abortion except where the life or health of the mother is at stake.  This is what McCain was making fun of.  Imagine the demented cynicism it requires to put together the following scenario: a state chooses to make a constitutionally-required exception to its general ban on late-term abortions in cases where the health of the mother is at stake.  If the state is choosing to ban abortions at all, why would the state then make the "health or life" exception pretextual, that is, make the exception something that McCain could air quote?  Illinois State Statutes, Sec. 123:  "After viability of the fetus, an abortion is only permissible if the doctor is sure that live birth would strain the mother's back or hurt too much."  If a state wishes to allow late-stage or post-viability abortions, it can do so in a straightforward way.  Roe only limits the right of states to ban abortions where the fetus is nonviable.

McCain's argument implies that a state would pass a law with loopholes which a doctor and mother would exploit in a conspiracy in order to achieve compliance with an abortion restriction. Which the state didn't have to pass in the first place.  Logic tells us, nay compels the conclusion, that the result is precisely the other way: if a state is motivated to ban abortions after viability, then it will narrow the exception for "health or life of the mother" to the constitutional extreme, that is, make the exception as hard to use as possible.

Think this through and maybe you'll see what I mean.  It is yet another example of the many ways that McCain simply does not know what the hell he's talking about.  Like his argument about "Joe the Plumber," which McCain cited as evidence that Obama wants to "redistribute" wealth.  Earth to Dumbass:  the progressive nature of the income tax code does now result, and always has resulted, in the redistribution of wealth from the wealthy to the less wealthy.  That is why the home state of your beauty pageant running mate, Alaska, receives $1.83 from Washington, D.C. for every buck it sends to the capital.  I firmly believe that McCain does not realize that a progressive income tax has this inevitable effect, and that "redistribution" is not a new idea introduced by Barack Obama, but was inevitable once the 16th Amendment to the Constitution allowed an income tax in 1913.  This is because McCain married his income and his places to live and has simply never wondered how money works for everyone else.

If this idiot's elected, you can put away the deck chairs on the Titanic.  As George W. Bush said about the economy in general, this sucker's going down.

The Ungrateful Nouri Runs the Clock

I've been reading a biography of Nikita Kruschev, a man that American statesmen of his era were prone to underestimate.  Kruschev was indeed a rough character who was easily mistaken for a country bumpkin.  He received only a rudimentary education in the Ukraine and spent his youth as a sheep herder, farmer and coal miner, following in a family tradition.  After the Revolution he became active in Communist politics and moved quickly up the party ranks.  While never a sociopathic killer like his mentor, Josef Stalin, he understood that when dirty work had to be done, you did it.  Such was the world he lived in.  In the Patriotic War, what we in the West call World War II, Kruschev was instrumental in the defeat of the Germans, playing strategic roles in both the battles of Kiev and Stalingrad, where, in the fateful winter of 1942-43, the Nazis lost the war. When Stalin died, Kruschev outmaneuvered Lavrenti Beria in a high-stakes power struggle (Loser Dies) and became head of state.

I find tales of political intrigue in less "civilized" societies fascinating, because it's a world so alien from our own.  If John McCain peddles a lot of bullshit about Barack Obama's service for an education foundation set up by a friend of Ronald Reagan, on a board of directors with a "domestic terrorist" who was also asked to serve by the same foundation, millions of gallons of ink are spilled talking about this non-event, as Americans go into hysterics about how "rough" American politics has become. As if. In Kruschev's power play against Beria, Stalin's head of the NKVD (predecessor to the KGB), Nikita had his rival arrested, tried before a tribunal for "crimes against Soviet citizens" (in many of which Kruschev was complicit), and shot the same day the inevitable sentence was handed down.  Now that's playing political hardball.  By comparison, McCain is just an old grumpy man mumbling irrelevancies into the wind.

Americans think all this stuff is a big deal because, let's face it, we're softies.  We're the one major nation on Earth whose civilization was not destroyed by either of the two World Wars.  We have no collective memory of what it means to live in smoking rubble, with all conveniences and sanitation gone, with rampant disease, starving to death in a cold climate.  Great Britain, France, Italy, Central Europe, and most especially the Soviet Union, bore the brunt of the horror.  Millions of Americans, mostly men, fought in World War II, and a small cohort of these brave souls still live among us. They know what the horror of a full-scale modern war is.  But beyond them, 99% of Americans think an intolerable burden is a line for gasoline longer than two cars, or an interruption in cell phone service.

It doesn't stop us from thinking we're tough guys, though, or from thinking that Ivy League credentials are more important than street-smarts in the rough-and-tumble of international intrigue.  Which brings me back, as usual, to the Ungrateful Nouri al-Maliki.  We have always parried the game-playing of the Iraqis, who have used us more or less remorselessly since we went broke liberating them, with guys like J. Paul Bremer, he of the Brooks Brothers suits and construction boots (darling!).  Or General Petraeus, the Princeton PhD who has never seen a day of actual combat.  Our guys are clean-cut, straight-talking, ultra-civilized products of the best American institutions of higher learning (beginning with prep school on the East Coast).  Iraq has Nouri, on whose head Saddam Hussein placed a death sentence in 1980, forcing Maliki to continue his underground resistance against Saddam from the relative safety of Iran and Syria.

And how's that working for us?  Maliki continues to drag out the negotiations for the Status of Forces Agreement (SOFA) in spite of the now-very-near expiration of the UN Mandate on December 31.  Nouri has already told the British contingent of 4,000 soldiers that they're free to go home now.  With respect to the American liberators, Maliki hedges his bets a little.  He keeps saying that after December 31, the United States "will lose its legal cover."  Is it just me, or is that an odd choice of words for a grateful client state to be using in negotiating an agreement whereby, at no cost to the Iraqis, America agrees to spend $10 billion a month and maintain a force of 150,000 soldiers in Iraq to secure the place?  

Lose its legal cover?  Who is Nouri's audience for such language?  Well, for one ayatollah I could name, al-Sistani, the chief poobah of Shia Iraq.  Nouri has been conferring with him and the Main Muslim is saying Yanqui Go Home.  Iran thinks that America has outlived its usefulness in the Middle East as well, and that's another important Nouri constituent.  Muqtada al-Sadr -- you have to ask?  So in this game of asymmetrical negotiating power, Nouri is playing it both ways. To the local Shia, Nouri's power base, who want us gone so they can more obviously resist all this nonsense about "assimilating" the Sunnis into the power structure.  Assimilating Sunnis is just to make us feel better, so John McCain can say we "won."  And to the Americans, because things are still a little dicey over there and Maliki could use the help.  He just doesn't want to guarantee the Americans they can stay till 2011, which is the way we want it, for reasons best known to George W. Bush.

Maliki has hung the negotiations up on the question of immunity for off-duty misbehavior by American GIs and contractors.  Generally speaking, American GIs are subject to local law under our standard SOFA pacts for crimes committed in other than a military capacity.  The Pentagon is not that big on subjecting Americans to the Draconian whims of a court run by mullahs.  You know, hands chopped off for petty theft.  No one even wants to think about the punishment for a rape.  So Nouri knows he's got a deal-breaker because he knows how squeamish Americans are about any situation where we don't have overwhelming superiority, or where we don't control the outcome.  He also knows that a SOFA is the only way for America to stay in Iraq, because the other route, an extension of the UN Mandate by Security Council, has one major obstacle.  All this stupid Red-baiting we've been engaging in, especially that mouthed by Dumb and Dumber (Bush & McCain), has succeeded in completely pissing off Russia, and they hold veto power over any such resolution.  Vlad Putin is going to do us a favor now?  (And what, exactly, did we get out of taunting the Bear?  A chance for McCain to relive the glory days of his virulent anti-Commie past?)

So what Maliki will likely get is an open-ended commitment from the U.S. to stay as long as Maliki feels like having us, but without America's "legal cover" for setting the terms of the occupation. Pretty rico soave, huh?  How the frick did he pull that one off?  Well, it's not anything he learned at Yale.  He just read his opponent better than we did.  He knew Bush couldn't leave Iraq precipitously because then Bush would have to say he "lost."  Ditto McCain, who needs the Iraq war for his campaign.  Barack Obama won't be in power till after the UN Mandate runs out.  I imagine that when Nouri eases back at the end of the day with a glass of mint tea and a lamb shawarma, he marvels at the box he's put the Americans in.  They spend all the money, their soldiers die, and they don't even get our oil.  And we tell them how long they're going to keep putting up with this.  People this dumb, he thinks, deserve nothing better.

The Nobel? Maybe Next Year

I am impressed that Paul Krugman, ace columnist for the New York Times, has just won the Nobel Prize for Economics. Although in graciously acknowledging this honor I can't help but feel the Nobel committee might have also considered my own stunning accuracy in predicting the Dow's plummet to the 9,100 level in a blog post many weeks ago, long before the Dow elevator passed the 9,100 floor on its way to the basement.  I would quote myself, but that seems unnecessary. Also, way too much work.  This is a blog, for crying out loud.

Nevertheless, there is more to maintaining a blog than simply basking in the egotistical glow that occasionally comes from a lucky guess.  Not much, but a little.  Thus, it seems appropriate at this point to elucidate some of the theoretical underpinnings of my theory for the benefit of a confused world.

First, unlike run-of-the-mill economists, those with jobs, for instance, I do not take seriously the "scientific" claims of economics.  I think the Nobel Prize should probably be in the same general category as the one for literature.  I noticed that Paul Krugman never figured out the Dow would hit 9,100 this year, the way I did.  He was more "generalized" in his comments about the economy; that way, you can never tell if he's right or wrong. That's the way all these guys play the game.

Me, I believe in numbers, so I gave one.  And The Formula:  14,000 - 4,900 = 9,100, where 14,000 was the Dow at its height; 4,900 was derived by halving the discretionary income of the American populace and multiplying this fraction by 70%, the percentage of the American economy attributable to buying stuff from each other, and winding up with 35% of 14,000, or 4,900. But I used letters for variables and equal signs, so the whole thing looked like algebra. My inputs were based on things I'd read, here and there, particularly Kevin Phillips and his work on the housing bubble.  Americans were getting about half their money from borrowing equity out of their houses, one way or another, during the "Bush boom."  All that money's gone.

I can practically guarantee you that the big rally on Monday was orchestrated by the Treasury Department and the Fed.  There was nothing real about it.  The Fed is printing money, giving it to the Treasury Department, and Paulson is manipulating the market with all his "discretionary spending money."  I don't think they're even going through the pretense of borrowing the money from "abroad" or from American investors or anywhere else.  They're running the printing press at a speed set just below the ignition point for paper money and letting 'er rip.  

There is one main purpose for this elaborate theater:  it buys time for the Bush Administration.  George W. Bush just wants to get out of town before (a) there are huge bank runs and a reversion to a wampum-barter economy last seen in the early 1600's in Pilgrim America (the best case scenario), or (b) [Bush's true paranoid vision] millions of destitute Americans arrive at the gates of the White House with pitchforks and torches.  It must be miserable for W to contemplate that after faking his way through the Presidency for almost eight full years, that he could find himself, with only 97 days to go, stuck in this awful mess.  I suppose nothing much disturbs his sleep, but if a nightmare did intrude, I guess it would be that archetypal vision where he's trying to get away, struggling to elude a monster trudging after him, and he just can't get his legs to go.  So he sits looking at a short-timer's calendar, dreaming of Dallas and a resumption of moderate drinking, of gaining as much weight as he wants, of not simply pretending to be folksy but of being the folksy cornball which his very limited intellect makes his natural style.  

It will be bliss.  And the only thing he's got to stave off for 97 days is the complete and utter collapse of Planet Earth's economic system, which has been brought on by his colossal ineptitude. Is that really so much to ask?

Comrade Bush Announces New 5-Day Plan

Washington, D.C. (Izvestia) - Comrade Bush, Premier and General Secretary of the Party, used the occasion of a state visit from Italy to announce in the Rose Garden today that Comrade Paulson's First 5-Day Plan for the Economy, which has not been tried, has not worked, and that in conjunction with other countries in the World Comintern, a new 5-Day Plan to save the world's economies would immediately be put into action.

Rumors circulated high in the Political Bureau that Comrade Paulson was now in disgrace because of his inability to make his First 5-Day Plan work during the first two days.  It is likely that he will be arrested and sent West for reeducation, after which he will become an internal exile.  Comrade Bush announced the details of the Second 5-Day Plan under which the Union of Socialist States of America will invest directly in the People's Bank and receive preferred stock representing the People's interests, with instructions to the Capitalist Running Dogs in nominal control of the People's Bank to start lending immediately to the proletariat.  

"The harvest looms," Comrade Bush intoned.  "The potatoes of the West will rot black in the ground if the peasants do not receive the money they need to fuel their tractors, to scythe the grain, and to load nature's bounty aboard the railroad cars that will carry this precious cargo to the tables of America's peasantry."

 

Italian Premier Berlusconi wept openly at his own rostrum, clearly moved by the poetry of Comrade Bush's words, not to mention his surprising grasp of Marxist ideology.  "Che uomo," he murmured, dabbing at his eyes.

"In this paradise of the proletariat which America is now and forever shall be," Comrade Bush boomed, warming to his subject, "the People's Congress and the Supreme Leadership shall join with the working class, clasping hands and marching forward until the final victory over the bourgeois and revanchist mercenaries of Wall Street and the decadent capitalists.  The banks shall be the People's! The great counting houses of New York shall be the People's! Insurance companies shall be the province of the Proletariat!  Transportation in the air, on the rails, shall be in conveyances owned by the mighty peasantry of the USSA!"

A great roar went up from the usually disinterested press.  In the general feeling of glasnost, even a question from a reporter was allowed.

"And Comrade Bush," the reporter asked, "health care as well?  The People shall finally have the socialized medicine they so desperately need, in this new era of the State providing all?"

"No," answered Comrade Bush.  "That will remain private."

Economics One Oh No

I saw "President" Bush yesterday in the Oval Office, after a meeting with the Slovakian president, answering a few questions about his riveting encounter with the Central European.  Bush had apparently assured the visiting dignitary that the "president" & his crack crew of economic advisors were coming up with something, in coordination with other countries around the globe, that would be "as best as possible."  That's certainly reassuring.  The Dow Jones has lost about 2,00 points over the last week since the current plan went into effect.  Why come up with anything new that's less than "as best as possible?"

I don't have a degree in economics or really much of anything in the way of formal training on the subject.  Alan Greenspan does have such credentials, but his ideological bent (he thought he should take his cues from the fiction of Ayn Rand) made him oblivious to the perils of unregulated derivatives trading, which lie at the root of much of what is going on these days.  I'm more objective; I don't have a religious faith in the "Free Market" as some sort of omniscient decision-maker for all things economic.  My commonsense take is that business is run by human beings, and humans tend to push things to the outer limits of the prudent and ethical unless there is some kind of arbiter and rule-enforcer.  We keep seeing that throughout history.  It's in the nature of competition: if you think you can't compete without cheating, then you are forced to a decision.  Either get out of the business or do as the cheaters do.  I find it interesting (as the "president" would say) that Congress is all for clamping down on major league baseball because of steroid use but doesn't see that this is simply the sports business version of regulating competition.  If the ball players think they can't compete with the players who are using steroids, then they'll find a way to use them too or quit the game.  Only a regulator can level the competition to get rid of the problem.

George W. Bush, Phil Gramm, John McCain, Grover Norquist, Ronald Reagan -- all have been idiots on this fundamental question of regulation.  It's not surprising, in Bush's case certainly, that mental habits engrained in religious thinking would slop over into his view of the business world.  In place of Divine Providence, he and his fellow Christers substitute the Free Market, and they accord the same mindless reverence to this fictitious "control" over outcomes. It is a form of Magical Thinking, and it connotes an extremely unrealistic view of human nature. This approach has now brought us to the edge of systemic financial collapse.  Without regulation (or even quantification) of credit default swaps and the other arcana of modern finance, no one can now say just how bad the situation really is.  Banks all over the world are failing, insurance companies are tanking, America's few remaining investment houses are on life support, and the U.S. Treasury is running out of options as fast as it's running out of money.  The "credit crisis" is mainly a function of incomprehension: no financial institution can accurately assess the situation to determine the solvency of any other financial institution.  And now General Motors, the fortunes of which determine what's good for the country, according to ancient wisdom, trades for five bucks a share.

This gargantuan mess was built up, piece by piece, byte by byte, by individual actors making decisions which were uncoordinated and unregulated by any government oversight.  The profit motive drove each decision and action, using the wide latitude available under a free market ideology.  Potentiated by computer speed and complexity, the deals were fed into complex algorithms and then elaborated through ancillary financial setups "derived" from some species of underlying equity asset.  All kinds of Casino Capitalism games were played using all of the complex interrelationships in Acronym World: MBS, CDS, CDO, all of them shorted, played long, tranched and sold all over the world.  All of this "costly nonsense" (Charles Dickens: Bleak House) was carried on in a mad frenzy, and the players who were best at the games made billions.  Every branch of the American financial world, representing 22% of American GDP (the largest sector of the economy), became intricately involved, from home mortgages to insurance companies to the mega-big investment banks, all as permitted by the repeal of Glass-Steagall, that archaic (and eminently sensible) regulatory framework from the Depression era, and the enactment of the Financial Services Modernization Act around the turn of the Millenium, which might be subtitled the Chaos & Financial Free-For-All Act of the New Gilded Age.  

So when the Ship of the American Economy went down, it took everything with it. Characteristically of a Gilded Age, it became conventional wisdom that greed was good in and of itself and no one need inquire about the social utility of all these rackets.  Bush seems now most determined to restore, or at least to do "what's best as possible" to reinstate, the system exactly as it was before the Crash of '08.  I think it's natural for humans to cling to the familiar when in a state of shock; it's the mind's first defense, to deny the reality of what's right in front of you.  But I don't see how anyone can put Humpty Dumpty back together again.  America's "prosperity" under "President" Bush was built on a Consensus Hallucination, the housing bubble made possible by one-time conditions that are not going to recur in our lifetimes.  The big investment banks are gone, either bankrupt or parted out to banks who want some of their lines of business. Lehman, Merrill, Bear Stearns had all gotten involved in the mortgage-backed securities hustle because the old bread and butter game of investment "advice" to the common person had died a slow death from Internet competition. Many commercial banks are going to fail and those which don't will become wholly owned subsidiaries of the United States Department of the Treasury, a form of "sovereign wealth fund" right here in the United States.

The U.S. trade deficit is shrinking, but that's because our consumption of imports is declining. And that leads to a reduction in dollars recycled to the U.S. Treasury from abroad, putting a dent in the Fed's ability to finance our "recovery."  As consumerism tanks, unemployment will rise.  The strains on the pension funds of state and local governments will become unsupportable without some high-yield investments to make their Ponzi methodology work.  Real property taxes, the bulwark of much of state and local government financing, will head south as millions of Americans with vanished equity seek reassessments.  That will lead to government layoffs and municipal bankruptcies.

There will be no quick fix, not at all.  Bush doesn't actually know what he's talking about, but if he did, he would realize there cannot be a return to "normality," only to a state of basic functionality commensurate with America's diminished wealth.  When the carnage is complete and the thrashing of the economy in its death-throes finally stills, I imagine we will see that the net asset value of the United States is about 60% of what it appeared to be at the height of the Bubble.  This is not a cyclical "correction;"  this is serious Attitude Adjustment.

Ambien for the Masses: The Presidential Debates

Lord Almighty, these are dull debates.  They're excruciatingly dull.  They induce a kind of physical pain after the first twenty minutes or so.  They don't seem to be about anything.

If you read around on the Internet on political issues, as I do a little too much, you're way ahead of these two guys on the main issues of the day.  You absolutely know that McCain and Obama are bullshitting their way through these seances.  I believe in concrete examples for serious charges, so here's one: both the Republican and Democratic candidate promise direct relief for homeowners in foreclosure or in arrears on their mortgage payments through a government program of buying the mortgages and renegotiating the terms with reduced principal and a better interest rate.  Gee, that's a helluva good idea.  That might stabilize the housing market somewhat and do something for, you know, the American people in general.

So here's a question the somnambulant Tom Brokaw might have intoned:  Where were you guys last week?  Why did you vote yes on a program to buy "troubled assets" from the other end of the financial food chain, the banks and investment houses holding the mortgage-backed securities?  It seems to me that used up the "available" (which is to say, "maybe borrowable") money to do much of anything.  Is Congress going to authorize another $1 trillion to work the people's end of the deal?

Social Security came up.  That's good; the question sent in from New Hampshire was pretty intelligent, certainly more informed than the debate in general.  What do you do when the Social Security fund goes negative, that is, current inflows are insufficient to pay retirees?  I don't think McCain or Obama understood the question.  They immediately went off on some tangent about the system needing "reforming," and McCain, in his truly imbecilic way, started bragging about the actions Reagan took back in the 1980s.  Yes, indeed: the FICA rates were increased sharply in the early 1980s (I should now: I was self-employed) to create a "surplus" to fund the Baby Boom.  Where's the surplus, Popeye?  It was all spent on the military, and the swiped money was replaced by "special" Treasury obligations and added to the national debt.  The caller in New Hampshire knew that.  What about Jack & Barry?

And, of course, not a single question on the linchpin issue: aside from saving a few billion here or there on this or that defense appropriation for some redundant laser-guided amphibious remote-controlled crawler tractor predator fighting vehicle, what are you guys going to do about the 750 military bases scattered over the globe and the $1 trillion spent annually on defense, wars, intelligence and "homeland security?"  Is it actually necessary or prudent for a country in decline to spend as much as the rest of the world combined in order to exercise a hegemony which the rest of the world resents and is increasingly hostile about financing?

Perhaps, as I keep reminding myself, it has become simply impossible to discuss real solutions to real problems.  The ship of state, on its collision course with an iceberg, can be nudged slightly to port or starboard but no fundamental course corrections are permitted by the rules of "safe debating" or government as usual.  I think Obama and McCain end up in roughly the same spot from different points on the compass.  McCain is just a mediocre thinker, a Bircherite and knee-jerk reactionary who has bought into his own nonsense about being a "maverick."  Obama, struggling mightily to overcome the huge handicaps of being a minority with a Muslim middle name, is constrained by all the Trip Wires, Third Rails and No-Go Zones of modern American politics, and thinking through the daunting matrix of taboos anterior to saying anything makes his responses tepid and dull.   I am sure in a private conversation he would be very different and far more open about the reality the country faces.  He wouldn't be talking about sending "more brigades" to Afghanistan to "finish the job," for example.  (Seven years later?  Can we even remember what the job was?)  He ventured his true feelings when he talked about "guns and religion" as opiates of the masses and got burned for his honesty.  He was spot on; of course the appeal to the heavens for salvation, and the hunkering down with a semi-auto, increase during times of great economic stress.  But the First Rule of American politicking is that you cannot tell Americans they have problems of their own making or that their reactions are irrational. We are, after all, Exceptional.

So he's got my vote.  He will be more creative and dynamic as an actual President than he can be in this ridiculous charade we call the election process.  

One more debate to go.  I can hardly wait.

He-e-e-l-p Me! I'm M-e-l-ting!

True.  But as I have often thought, and then said, in some ways we should be reassured that Saint Thomas Aquinas was right: you really can trust the authority of your senses. Under what economic theory can a nation actually spend its way to prosperity?  If you base your economy on consumer spending, to the 70% level, and if the largest single sector of that same economy is "financialization," that is, money manipulation, isn't that economy bound to crash as soon as the citizenry runs out of money?

Of course.  We can make the problem as complicated as we want, we can listen to half-wits like Tom Friedman with his "flat Earth" nonsense, we can pretend that there are Cosmic Free Lunches and Perpetual Motion Machines, but our intuition rebels against such thinking.  If you keep sending all your money abroad, and can only get it back by borrowing it from the foreigners' intermediary, the U.S. Federal Reserve, pretty soon your capacity to borrow that money will be exhausted.  One way I would calculate the rate of depreciation is as follows: if the average rate of a good mortgage was about 5% per annum, then over the course of Bush's eight years in office, the cost of re-borrowing the money we send overseas adds up to about 40%.  If you compute the depreciation of the dollar against other currencies during that same period, you will find that it adds up to about 40%.  There are no great mysteries here.  Like 40 days and 40 nights of rain before the Deluge, or Jesus's 40 days in the wilderness, or the 40 years the Israelites wandered in the desert, this is simply one of those totemic numbers that spell the end of American dominance, for a while, for a long time, maybe forever.

Securitized mortgages were first.  Securitized credit card debt will be next.  The true unemployment rate, freed from Bushian propaganda, is about 14%, as computed by the reliable John Williams at Shadow Statistics, who refuses to buy into the pop-fraud computations of the Clinton era.  Inflation is over 13%.  160,000 jobs were lost last month, and if you consider that about 150,000 jobs per month are necessary to keep pace with new entrants into the job market, we're falling short by over 300,000 jobs per month.  Retail business is drying up, car sales are nonexistent, discretionary spending ist kaput.

Against this background, John McCain, the candidate for one of America's two principal political parties, wants to talk about Barack Obama's "association" with William Ayers, a radical from the Vietnam Era.  Quite possibly a nation that frivolous deserves what it gets.

Bill Maher's "Religulous"

I think Bill Maher probably owes a debt of gratitude to Michael Moore for devising the concept of the auteur-political documentary, distinguished by the direct involvement of the filmmaker in the Q&A sessions making up the bulk of the movie.  Maher's "Religulous" is better than Moore's agitprop movies because Maher has a sharper focus and a keener wit than Moore, and does not engage in the kind of emotional bathos Moore typically uses to win over his audience.  Bill Maher doesn't really use emotional content at all; his movie about religion, and about its clear and present danger to human survival, is aimed "more at the head than the heart," as Boris reviews the short drama about VD during the Napeolonic wars in "Love & Death." (Obscure reference for the cognoscenti only.)  While the professional reviewers attack Maher for his insensitive badgering of the pious, Bill is obviously angry at the overwhelming of political life in America and elsewhere by religious doctrine and he lets fly. To hilarious effect.

And so he travels the world insulting people of all faiths and creeds.  It's very, very funny, but the "cruelty" arises not from Bill's lack of piety but from his willingness to say exactly what you're thinking when he says it, no matter where he is.  He can be in a makeshift chapel at a truck stop in the Deep South and challenge burly truckers to debate the claims of inerrancy in the Bible, never mincing his words and never pandering.  In a conversation with a Muslim in Amsterdam, he can take on the claim that the fatwa against Salman Rushdie for writing "The Satanic Verses" did not chill free speech by telling the oh-so-gentle Muslim, "What you're really saying is, write something we don't like and we'll kill you," and then daring his interlocutor to prove otherwise.  In Florida he talks to a religious zealot, a "converted gay," who works to convert other gays to heterosexuality on the theory that homosexuality is (a) sinful and (b) subject to choice, since it's not genetic.  The preacher enthusiastically talks about a gay man and lesbian whom he converted so successfully they married and had children.  Bill then says they must have had a typically heterosexual marriage, with no sex.  Then Maher points out that if he saw this obviously gay "gay reformer" in a bar, he would instantly know he was gay, and the guy just smiles, knowing he was nailed.  They hug as they part ways and Bill asks him if he got an erection.

On and on, in a  bravura performance.  If you're religious, don't bother to see it since you'll dislike the tone and content intensely.  If you're "agnostic," like Bill, you won't learn anything new but you might be entertained.  Bill ends his movie with an apocaplyptic scenario, as he stands on the hill in Megiddo in Israel, where Armageddon is prophesied to occur.  He appeals to our rationality to overcome the dark forces of organized religion.

He's wasting his breath and he knows it.  But it makes for an interesting documentary and an opportunity to travel with him to England, Denmark, the Vatican, Israel, and all through the Deep South.  Maher notes that 16% of the American populace is agnostic and atheistic and wonders why they're not a more powerful interest group.  Among 24 nations of modern culture and civilization, the United States ranks 23rd in secularism, just ahead of Turkey.  I don't know what criteria are used to determine whether a nation is god-besotted, but that sounds about right.  It's nuts here, that's for sure.

Lots of people that Bill interviews around the world think we're near the End of Days.  Maher sees it as a self-fulfilling prophecy, since the inclination to think it's almost over tends to lead to indifference to things we might do to ameliorate the crisis.  I look on things somewhat differently from Bill, lacking his belief in the primacy of the intellect or rationality in such matters.  I think things look like End Times because human consciousness is formed most conclusively by the environment we live in: overpopulation, pollution, degradation, desertification of land and oceans, global warming.  These things work on us, dismay us, make us crazy.  Things look apocaplyptic because we're destroying the very planet on which we live and making it uncomfortable and aesthetically ruined as we go about it.  And in the vast thronging multitude, the Earth's six billion people, we find many, many religious people, perhaps always in about the same historical proportion, but the conditions of life and their sheer numbers (and the destructive technology they can access) exacerbate the peril, maybe past the breaking point.

Maher notes that 93% of the members of the National Academy of Sciences are either atheistic or agnostic (I don't know why Bill persists in that dichotomy; as Richard Feynman demonstrated beyond all doubt in a brilliant essay, there's no real difference.  An agnostic is an atheist who's having trouble coming to terms with the finality).  That makes sense.  Just as it takes a leap of faith to believe, it takes a leap of imagination not to believe.  Bertrand Russell in his 1927 essay, "Why I Am Not A Christian," (Google and enjoy - breathtaking) laid out the basic atheist arguments, the answers to the "proof" of a god.  For example: as to the "First Cause" argument, that if there is a world, then something or someone made it, since everything has a cause.  Thus, argues Bertrand, something had to have made God.  If the answer is that God always "just was," then Russell answers that the same argument can be made for the world: it always "just was" too, and it's no more unlikely than the Creationist story.  

There's no comeback to that.  God is the result of human psychological projection: since when we see something like a chair or house, we know that someone made it, our tendency toward the concrete (something like the use of "manipulables" in Montessori schooling) sets the limit of our ability to think about things.  We assume that a world in which humans live was made by a human-like intelligence.  What a coincidence!  Or - could it be we're looking through the wrong end of the telescope?

A certain kind of mind (I won't say "more intelligent") grasps what Russell is driving at.  And some people have minds, or personalities, which manage to live without hope, and are content with the basic absurdity of human existence.  It's the only thing we can really know, the essential meaninglessness of life, and we want to live according to what we really know because it feels better.  And we feel safer in a world of rationality than we do in one where religious irrationality rules mankind.  None of that is going to help convert anyone from one way of thinking to another, but a movie as grim and hopeless as Maher's (whether he realizes it's that way or not) needs to end with some hortatory uplift, so he gave it a shot.  Not in this world, Bill, but it's nice to have a spokesman.