Nature Always Sides With The Hidden Flaw

Here at Waldenswimmer, we face Near Term Extinction so you don't have to.  No need to thank us; it's the way we roll.

Our hysterical story so far: it would appear there has been a slight omission from mainstream reporting in the United States; to wit, the climate change story has entered a new phase of seriousness which we might term the "Arctic Methane Problem."

As with all previous iterations of the climate change story, in America the Arctic methane angle must first travel through predictable rites of passage before it can engage the general public interest.  The first phase, of course, is Denial/Minimization. Andrew Revkin of the New York Times predictably fulfilled this function in late 2011 with a post on his Dot Earth blog entitled, in effect, "Apocalypse Not." Essentially, this writer and singer-songwriter (meaning: he has scientific credentials similar to my own) talked to a couple of scientists who assured him that methane emissions from the Arctic have been occurring for thousands of years, this is nothing new, let it go, etc.

As a note in passing:  there is something very adult-sounding about dismissing disaster scenarios, such as runaway greenhouse.   Yet I still wonder: is attitude exactly what is called for under these circumstances?  Granted, methane releases are commonplace all over the world.  It's the byproduct of anaerobic breakdown of organic matter by microbes. The frozen methane was nestled deep in the sediment of the Siberian Arctic Ice Shelf, was covered by mud, by 150 feet of water slightly above the freezing point, and then, at the surface up above, by a thick layer of Arctic ice. They've been there since the days the Arctic shelf was well above sea level, when the climate was much colder.

Think of all we had to do to wake those microbes up.  Warm the air with CO2, which melted the ice, which allowed sunlight on the dark water, which transmitted heat down to the Arctic shelf, which freed the methane to bubble to the surface at long last.1

Ira Leifer, University of California:   "The amount of methane that’s trapped under the permafrost and in hydrates in the Arctic areas is so large that if it was rapidly released it could radically change the atmosphere in a way that would be probably unstoppable and inimicable to human life." [11]  James Hansen adds: "It is difficult to imagine how the methane clathrates could survive, once the ocean has had time to warm. In that event a PETM-like warming could be added on top of the fossil fuel warming."

How did the Arctic Methane Problem sneak onto center stage without anybody (in America) noticing?

Well, a few notes from a personal perspective.  I can recall, a little over a year ago, the proceedings of the American Geophysical Union in San Francisco.  The convention received a pretty good write-up in the San Francisco Chronicle, since this area is not much under the influence of the Three Stooges of Climate Denial, Joe, Dana and Jimmy (Joe Barton of Texas, Dana Rohrabacher of Newport Beach and James Inhofe of Exxon Oklahoma).   A particularly interesting story concerned the voyage of Dr. Igor Semilitov, a Russian atmospheric scientist and veteran of many Siberian Arctic cruises. As Dr. Semilitov reported at the convention: 

"Earlier we found torch-like structures like this but they were only tens of metres in diameter. This is the first time that we've found continuous, powerful and impressive seeping structures, more than 1,000 metres in diameter. It's amazing," Dr Semiletov said. "I was most impressed by the sheer scale and high density of the plumes. Over a relatively small area we found more than 100, but over a wider area there should be thousands of them."

I had no context for such a report at the time.  Methane seemed like yet another technical sideshow to the main story line concerning atmospheric CO2.   Yet nature does indeed side with the hidden flaw. The flaw was this: inhibited as we have always been by the leadership such as that provided by George W. Bush ("the science isn't settled"), by the Three Stooges of Denial, and by the general indifference of Barack Obama, we have operated on the principle that so long as we got around to dealing with carbon dioxide levels by 2050 or so, by which date Barack Obama pledged a country which he will no longer lead to an 80% reduction in greenhouse gas emissions (and probably to a definite closing date for Guantanamo at about the same time), all would be well, and any more urgent schedule was motivated by hysteria.  This was the operating principle.  Thus, we would go on dealing with the "recession," and with "energy independence" and the rest of it, and we could deal with global warming when the time was right.

Or so we thought.  In retrospect, that was a pretty simplistic and unrealistic view of a highly complex climate system, with many inputs, many feedback loops, and many unknowns.  I'm struck by the willingness of the Russian scientist to speculate a little bit, guessing that if he saw 100 methane plumes, there must be thousands more he didn't see.  That does make sense, but American scientists have been so intimidated by Denialism, by the fear of saying anything that hasn't already been proven true, that they would regard even such a logical induction as the daydreaming of a Greenpeace hippie.

So in September of this year, while the Russians are sailing around again checking for methane plumes, here in America we'll be continuing our argument about whether it's AGW, or just a natural cycle, that has led to a North Pole without a cube of ice.

We're At About 99 Monkeys

I was feeling satirical, looking around on the Web for stuff on Joe Barton, the Republican from Texas who persecuted those three climate scientists during the Bush Administration over the "hockey stick."  Some statistician with no climate science training wrote to Barton and said their analysis was full of holes, so Barton put out a request to see everything all three of these guys had ever done - all their research, all their papers, all their funding, all their notes, all their methods, etc.  Fortunately, a lot of people went to bat for them and called Barton off before he could do too much damage.  As a result, the Realclimate.org blog (which is on my blog) was founded by Raymond Bradley and Michael Mann, who were the two main authors of the "hockey stick" analysis that was a part of the IPCC report way back in the early 1990's.  Barton, of course, like James Inhofe of Oklahoma, is on the payroll of Big Oil & Gas, and it was always Bush's idea of a sick joke to put people with no training in charge of the major "environmental" and energy committees, especially if they were openly hostile to AGW theories.

So as a man with a Kindle (and a PaperWhite at that), I got Bradley's book, "Global Warming & Political Intimidation," and began reading. Bradley goes very deeply into the methods used by climate scientists to determine temperature patterns in the days before thermometers and regular record keeping.  It's very, very complicated, involving "proxy" data sets like ice cores, corals, lake sediment, and tree rings, and then correlating these proxies on a worldwide basis to build a picture of past climate.  Fortunately, Michael Mann, a good Berkeley undergrad, Yale PhD in physics, applied math, and geology, knew how to do it, and his methods have held up well since their original publication in Nature.  But I got to thinking: how much more difficult is it to do this kind of work in this country with these Congressional morons looking over your shoulder trying to find the slightest hesitation or expression of doubt?  And how much does that chill the necessary research?  And did, in fact, the influence of people like Joe Barton, James Inhofe and Dana Rohrabacher doom the human race to near term extinction?

Hear me out on this one.  As a result of this official Denialism, what I most feared back in 2000, when Bush was elected, may in fact be coming to toxic fruition.  We could not afford those eight years (nor five more of Obama's go-along complacency), and disaster may lie in the not too distant future.  I started reading around on the Web, following Bradley's leads, and a major omission from American reporting began to take shape.  Russian and European scientists talk about it all the time, and it's on the news over there, but in America we have what you might think of as "Al Gore-ism," where nothing is ever said that might sound "hopeless." Our attitude about global warming is equivalent to the Victorian attitude about sex: it's okay, as long as you don't do it in the street and frighten the horses.

What I'm referring to is the problem with methane release in the Arctic Circle and in Siberia.  This has been given a once over lightly approach by the IPCC, and is essentially never mentioned in America's popular discourse.  A curious omission, since the survivability of Homo sapiens may be at stake.  For example, methane plumes from the Siberian permafrost were, up until about two years ago, about a meter across.  They were everywhere, and Russians for fun would dig holes in an ice-covered lake and then set fire to the escaping gas.  These methane plumes are now a kilometer across.  Methane is bubbling up out of the shallow waters (in general, less than 50 meters deep) of the East Siberian Ice Shelf, out of the permafrost (which is thawing) and from the shallow waters of the Arctic Ocean north of Canada. They were held in check for millions of years in the form of methane clathrates (a frozen state), and buried in the sediments beneath the permafrost and in the ice shelves.  With the Arctic warming, the ocean is transmitting heat to the submerged stores and the warmer climate in general in Siberia is thawing the permafrost.

The quantities are enormous.  CH4 has a life in the atmosphere of only 12 years, versus CO2, which is essentially permanent once it's up there.  Methane breaks down into CO2 and water vapor (mainly), so it winds up greatly adding to CO2 concentrations.  But it's what it does in the short run that may make all the difference.  In the short run it has a heat-trapping capacity which is 100 times that of CO2.  Ice core studies from the Younger Dryas demonstrate that the order of events, as the climate emerges from an ice age, is that CO2 concentrations rise first, and this sets up the warming which begins freeing up methane from exactly the places it's coming now.  When this process starts, it has the capacity to raise global temperature by 1 degree C per year. This is rapid transition, "non-linear" change, or runaway greenhouse, take your pick.  The correlation between massive methane release during such transitions and temperature rise is much more closely related than the relationship between carbon dioxide and temperature increase, at least according to the studies of some researchers who have looked at such historical data (or who have dared to look).

For what amount to political reasons, the conservative Intergovernmental Panel on Climate Change has chosen to "lengthen out" the effect of methane over a 100-year scale, so that its heat trapping qualities can be correlated to CO2, which is usually measured over such a period.  Over 100 years, methane is about 22 or 23 times more powerful, but methane's far more powerful short-term effects have been given short shrift.

As Steven Chu said, once he quit working for Obama and could speak his mind again, we are right now on the verge of beginning the runaway phase of global warming.  CO2 is like kindling - it sets the stage, but as long as you only focus on CO2, you can get the idea that we need to do something now to avoid a problem in 2100 or so.  This may be tragically wrong.  The original Kyoto Protocol (and the Club of Rome) were right to sound the alarm when they did.  With complete cessation of fossil fuel burning by 1990, we might have headed this catastrophe off.  But we had guys like Barton, Inhofe and Rohrabacher giving our scientists a hard time, and making them pull their punches, so the worst CO2 emitter on Earth could carry on with business as usual.

Poke around on the Net and see what I mean.  Look at the website of the Arctic Methane Emergency Group. They want to create clouds above the Arctic for a massive albedo effect as a desperate measure to keep the water up there cold enough to hold the methane in check. Go to YouTube and key in "methane plumes in Siberia."  It's horrifying, the scariest stuff I've ever read.

The problem always was that it took the latest science too long to become established.  The usual process of research, writing, submitting, peer review, revision, resubmission, etc, and then eventual inclusion in an IPCC compendium meant that it could take 5 years for the latest research to see the light of day.  The atmosphere of Denialism made scientists leery of ever saying what they really thought about what they were finding out. It made the process much more conservative than it should have been, and it means the IPCC reports were always consistently underestimating the real scope of the problem.  And now we have methane plumes a kilometer across belching CH4 into the atmosphere, with gigatons to follow.

My desire to be satirical about this went right out of me.  I don't know what to think now. This all has the quality of a bad dream.

The suspicion is that there may be no Arctic sea ice at the end of this summer.  All that dark water, absorbing heat, thawing methane, trapping heat, leading to more thawing, in a death cycle of feedback loops. My fearless prediction is that in about a year, the problem of methane release will break through to general American consciousness, and then, for a while, we won't be talking about gun control or Kim Kardashian's butt implants. And when the problem becomes that obvious, I would advise Joe, Jim & Dana to maintain a very low profile.  Probably on a private island.

Waiting Out Benghazi With Barry Galbraith

My present method for dealing with Made-for-Madtime-TV scandals (Madtime TV is my designation for those cable television shows on MSNBC, Fox and CNN that cluster around the late afternoon hours and take whatever story-du-jour has captured the public imagination and beat it into senseless oblivion) is to wait them out.  You can fall for one of these manufactured "controversies," and breathlessly await the next breaking development as the story "builds;" or you can ignore the whole thing and wait for the sagging denouement in which it is admitted that there was never anything there in the first place.  Watching Bill O'Reilly or Rachel Maddow from one day to the next has the huge downside of wasting a tremendous number of hours of your life.  You do not know anything more at the end of your viewing sessions than you knew at the beginning, not really.  You only think
you do, and there are never any "general lessons" that you learn about anything, other than the state of our public discourse is more than faintly ridiculous.  And you already knew that.  Bill O'Reilly and Rachel Maddow run with these stories because they are in the business of attracting viewers to their boring shows; that is, it's a business.  If you thought that bulb planting was equally riveting, they would do an hour on that.

If you eschew these faux-controversies, a number of immediate benefits spring up and bloom in your life.  You don't have to watch John McCain's strange, lopsided face get further distorted into yet another paroxysm of insane rage, as he demands "answers" and vows "to get to the bottom of this." By itself, that's an extremely salutary development.  You don't have to deal with Hillary Clinton's hair enigma: why is she growing it longer now than really works at her age?  But best of all, you can do other things with your time.

For example, I've gotten into jazz guitar comping.  This is fun, and it can take you to places of musicianship you didn't know you could access.  It takes a lot of time, however, and you have to choose between Rachel Maddow's high-energy, frenetic shouting about something you don't quite follow, and doing something where you can actually make progress in personal development on a day-by-day basis.  I owe it all to Barry Galbraith, a great jazz guitarist and teacher who bequeathed a series of books to the practitioners of the music he loved.  You've never heard of Barry Galbraith, although he was an American and a genius at guitar arrangement and music theory, who lived a quiet, humble life and played with all the great jazz singers and musicians of his era: Sarah Vaughan, Ella Fitzgerald, Rosemary Clooney, you name it.  He arranged standards and collected a whole bunch of the very best in two books; sadly, only two books.  Another fellow came upon a trove of his hand-sketched arrangements of a bunch more and he published those on the web, although they're hard to read.  This fellow was amplifying the generous nature of Barry Galbraith's spirit. He knew that Barry's followers could never get enough of this stuff.

And Barry put together a couple of strictly pedagogical books to teach you how to comp, how to play, for example, a walking bass line with the voicing of chord notes for another group of standards where he hadn't done full-scale arrangements.  It's hard to describe how much fun it is to feel these arrangements come together under your hands.

I can't remember exactly how I first came across Barry Galbraith.  I think maybe I was looking on YouTube for videos of guys playing jazz guitar standards, and over and over again the notes below the video would mention that the arrangement was by Barry Galbraith.  Usually the player would call him the "great" Barry Galbraith, because by the time you learn one of his arrangments, that's how you feel about him.  Then one fellow mentioned that the arrangements could be found in those books I mentioned, and I sent away for them, and then I sent away for everything else Barry had ever published and now I own them all.  And I'm set for life, especially if I begin (as I will) printing out those chicken-scratched arrangments that fellow was nice enough to hoist up on the 'Net. And then I'll spend years figuring out all of those.

The larger idea being: there's something in your life that's life jazz guitar comping, something rich and personally nourishing, and it's not Bill O'Reilly gassing on for two or three months about whether the Benghazi attack was inspired by an anti-Muslim video shown in Cairo, or was (instead!) a covered-up terrorist attack on an American diplomatic post.  After watching Bill and Rachel for months on end talking about this nonsense, you'll feel limp, and cheap, and used, with absolutely nothing to show for it.

And if you wait long enough, you find out, in one article by Glenn Kessler in the Washington Post, that the Benghazi "consulate" was actually a CIA station installed there by the Agency to retrieve shoulder-launched missiles which had fallen into insurgents' hands, that it had almost nothing to do with the State Department, and the reason the story was "muddled" at first by Susan Rice was because the White House didn't quite know how to play the revelation that our "consulate" was a spook house, although the Libyan attackers obviously already knew.  http://www.washingtonpost.com/blogs/fact-checker/post/an-alternative-explanation-for-the-benghazi-talking-points-bureaucratic-knife-fight/2013/05/10/22a8df5c-b98d-11e2-b94c-b684dda07add_blog.html?hpid=z1  There, I just saved you 200 hours of excruciatingly borning television.

And now back to Barry's comp of the great Jimmy Van Heusen's "Like Someone In Love."

Saturday Morning Essay: Meanwhile, Up in the Troposphere

Brought to you by Peet's House Blend....

Actually, "worrying" about the economy is a nice distraction from real problems, such as global warming.  It's all in how you look at things, as Pablo & Salvador depict above.

Did you hear?  The world has achieved another milestone: 400 parts per million.  The monitoring station up on top of Mauna Loa recorded a full day's CO2 measurements where the average came in at 400 ppm.  We did it!  (Or, more appropriately:  Good Lord, man, what have we done?)  Don't worry.  That number will drop somewhat over the summer as the world's forests and other greenery snarf up a few million tons of that CO2 and photosynthesize it.

Then it will be back, higher than ever.  Higher than it's been in three million years, which, if you're playing along at home, you know is longer than human beings have been around.  For right now, however, it's kind of cool that the CO2 component of room air, .04%, matches up so perfectly with the Keeling measurements high up in the Hawaiian tradewinds.

Currently, the anthropogenic contribution to CO2 levels is doubling about every 30 years or so, which allows some easy math.  The "heritage" level of CO2 (around 1750, at the dawn of the Industrial Age) was about 280 ppm.  So, we've pumped another 120 ppm into the atmosphere during these first 260 years or so, but obviously we were just getting started.  280 + (120 x 2) = 520 ppm in 2043.

James Hansen & Co. have modeled some possible outcomes based on these increases in terms of "sensitivity" to CO2 concentrations.  Basically, 3 to 4 degrees C equates to a CO2 concentration of 520.  That's not good, not good at all.  It would be much better to hold the line where we are, although, of course, we won't.

But we should.  For the love of God, man, we should.  We may get a little more cooperation from....well, from ourselves when the deep ocean heating that has been going on over the last decade begins bubbling up to the atmosphere again.  That's where Earth has been parking the additional heat, but it's been masked by a persistent La Niña in the Pacific Oscillation.  I've noticed that myself over the last five years or so, out here next to the rim of the Eastern Pacific.  I suppose that buffer will dissipate (sort of built into the word "oscillation"), but I hope Earth takes her own sweet time.

It's Mother's Day tomorrow.  Don't forget Mother Earth in your remembrances.

Krugman and Stockman Battle to a No-Decision

Thus endeth my informal education in modern economics.  The truth is, in terms of the epic slugfest between Paul Krugman, Champion Keynesian, and David Stockman, Champion Sourpuss, I have no particular favorite.  I don't think either one of them is actually talking about what is going on in modern American society, and in some ways I think they're both cockeyed optimists masquerading as Gloomsayers.  For example, David Stockman manages to write 700 pages without mentioning that thing we call the "environment," and which in older times we called the "natural world."  It goes without saying that Paul Krugman never mentions the effect of reality on his economic models.

David Stockman appears to be arguing that modern capitalism in America would work within our present framework of democracy if we would just stop using so much debt financing, both public and private.  Krugman argues, contra, that we should use public debt financing to fill in for lost consumer "demand" in our economy until the economy gains "traction" and becomes self-sustaining.

Yawn.  I feel for these guys.  It can't be much fun to construct all these charts and graphs on what is essentially a dry-lab basis that has nothing to do with anything.  They're a couple of old geezers (like me) who are remembering an America of their youth and pretending it can be restored if we pick the right nostrum.  And they're both so damn angry all the time.

It's okay, guys.  It's not your fault.  For my part, you might say I'm more of a classicist.  As I've written before, I think you can learn a lot by reading and studying the works of those deep thinkers who observed the "turn" in the organization of society and thus were acutely aware of the nature of the changes taking place.  Those who come along later are born and inured to the "normal" that already exists, and thus have a difficult time seeing that the way things are set up is not necessarily "ideal" or maximally conducive to human happiness. This is the "normality bias," or the "normative tendency of the factual."   So that our modern critics, for the most part, are forever jiggering, intellectually and politically, with a social system that will never deliver the results they desire.

One of my intellectual heroes is Emile Durkheim, the French social theorist often credited with the founding of modern sociology.  The scion of a long line of rabbis from the Lorraine area of France, Durkheim jettisoned religious thinking and embarked on an "empirical" study of society, in a less "conceptual" way than Karl Marx, who tended to go in for fanciful narratives about "scientific history" that foundered on a misunderstanding about the basic nature of human psychology.  Durkheim gave us the concept of the "organic society," the beehive where citizens surrender their individual autonomy and self-sufficiency in favor of mutual dependence in a highly specialized "division of labor."  (Thus the title of Durkheim's master work, The Division of Labor in Society.)

This division of labor is the foundation of modern capitalism, and no country is more capitalistic than the United States.  It is our essential religion, in a way that Durkheim would have appreciated (since he believed that religions arise out of social utility).  Capitalism tends to push toward ever greater efficiency and increasing profit margins.  Whether these drives are consistent with the welfare of the individual members of the society is a secondary concern.  You might say that capitalism has a mind of its own.  America has now arrived at the point where about 58% of the adult population (those 16 or older) have any kind of a job.  This is called the "employment rate of the general population" and is probably the key measurement of conditions inside the "organic society."

The great thing about the various "bubble years" that we passed through over the last couple of decades is that the accumulation of debt they made possible enabled our society to employ more of our people, in the Planning & Tanning Economy, than is now the case.  Mr. Krugman liked these arrangements and disapproves of the "cranky old man" criticisms of a moralist like David Stockman. I think that's how that dynamic works.

America always tends to lead the way in social innovation.  Our employment of only 58% of the adult population does not seem to adversely affect our "productivity" or the profit margins of the large corporations which own our society and political system.  In other words, brutal as it is to say, we don't need the other 42% to avoid shortages or to maintain our vital heat.  Indeed, we don't even need the 58%, as we all know.  We don't need me, for a specific example.  The work I do could easily be taken on by a couple of other lawyers as additions to their work and I would fade into total economic irrelevance (in other words, I'm already in a state of complete economic irrelvance in terms of "productivity" and "efficiency" within the Organic Society).

I think these trends are generally taking hold in advanced industrial societies.  The problems look like something else because we insist on believing that the "organic societies" of the modern world exist in order to provide livelihoods for their individual citizens.  This is a fundamental misconception about the sociopathic (literally) tendencies of capitalism.   It leads the esteemed Mr. Krugman to argue repetitively that the American economy is "under performing" or has "unutilized capacity."  Not really.  We have everything we need, although as Gail Tverberg points out, the prices of some of the absolute essentials, such as petroleum, have gone through the roof.  The marginal effect of this price surge (which finds its way into practically everything) is that the hard-pressed citizenry abstains from the frivolous activities and purchases of the Planning & Tanning Economy, and those activities were the difference between the Bubble Years and now.  As Gail notes in Our Finite World:

Economists base their models on the assumption that the economy only needs labor and capital; it doesn’t need specific resources such as fresh water and energy of the proper type. Unfortunately, substitutability among resources is not very good, and price is all-important. In the real world, growth slows as resources become more expensive to extract.

This is something of a major oversight. Ironically, this elision comes about in another way that My Man Durkheim would appreciate:  Paul Krugman and David Stockman are not ecologists, geologists or biologists.  They do desire prominence, however, and the easiest assumption to make in order to maintain their academic or business standing is to assume (falsely) that their fields are self-sufficient, and that the world can be explained without venturing outside their narrow disciplines.  Nonsensical, isn't it?    Yet that's how we form our "opinions" these days.

To wrap this up: with automation, assembly-lines, agri-business, online commerce, automatic toll booths on the Golden Gate Bridge, voicemail, computers, outsourcing of manual labor to poorer countries, and all of our other modern wonders, we produce, for the nonce, all that is necessary to maintain the population's vital heat.  Increasingly, what we don't produce are jobs so that the American commoner can afford to buy those essential things.  We're papering over the difference now with "transfer payments:" food stamps, Social Security Disability and early retirement, straining public pension systems, which keep the hoi polloi alive, for the most part, and keep the natives from becoming so restless they rise up against those who do so well within the current system.  Eventually, we will "means test" all of these "entitlements" as the next stage of devolution, then we'll host a "Debt Jubilee," and then we'll descend into anarchy, in the great historical tradition.  It should be interesting.

Sunday Morning Essay: Mr. Krugman's Science, Part 9, and Stockman on "Breadwinner Jobs"

I remain a stranger in a strange land when it comes to economics.  Generally speaking, the "science" of economics appears to be on a par with witch doctoring, only with fewer useful social applications (and oddly - more smoke).  As part of my auto-didact adventures in this dubious field, however, I faithfully read the columns and blogs of Mr. Krugman, who does the valuable service of setting the terms of the debate for the other quacks.

If you dip into the vast ocean of Mr. Krugman's writing, your ladle will doubtless contain (simply through statistical probability) the words and phrases: liquidity trap; zero lower bound; austerity; stimulus; Keynesian multiplier; and, occurring more often than all other phrases, I'm right.  Also, "as a percentage of GDP;" I'm convinced Mr. Krugman has a Casio watch with an algorithm built into it so that he can instaneously calculate anything, his lunch tab, for example, as a percentage of GDP.

As Mr. Krugman is wont to tell you (as he's desperate to tell you), he has been right that the Fed's money-printing has not ignited runaway inflation, nor has it caused the yields on Treasury bonds to spike higher.  After four years of money-printing, the excess reserve accounts of the Primary Dealers (the favored members of the Fed's banker cartel) have been engorged. That's been the main effect. The big Wall Street stock indexes, allowing for inflation, have recovered to about the level of late summer, 2007; through complicated financial channels, this rise is an artifact of the Fed's legerdemain and is unrelated to the moribund state of the general economy.

Mr. Krugman's tendency to be right on a narrow range of predictions makes him my favorite Bar Bet Economist. Will the next woman walking through the door be blonde or brunette?  On that order of significance. His predictions don't really mean anything, they don't diagnose the problem, but his focus on this narrow spectrum means that he can write the phrases listed above (dipped from the Krugman Ocean) on refrigerator magnets, push them around on the door of his Sub-Zero, and produce another deathless column/blog/paean to his infallibility. 

Yet sometimes I wonder what's going on in America, and there I find Mr. Krugman's writing somewhat useless.  Distractingly pointless, in fact.  Which is why my attention was drawn to the "breadwinner jobs" analysis in David Stockman's 700 page magnum opus, The Great Deformation.

The "breadwinner job" was a hallmark of the Greatest Generation.  My father had a breadwinner job. A lot of American males did in that era between 1900 and about 1970.  I was alive for part of that, and many of my attitudes about life in America were formed then.  My "parallax of nostalgia" (to quote myself, and N.B. to Krugman: don't steal that without attribution the way you did "Very Serious Person" from Glenn Greenwald) encourages me to think life here in America should always be that way, even though it so obviously isn't anymore.

A Breadwinner Job is a job that can support a family.  A man or a woman can hold such a job.  In most parts of the country, it takes about $50,000 per year to accomplish the task.  Let's imagine it's 1965, adjust for inflation, and think about what such a job might have been.  A man could work in Detroit, in an auto plant assembling cars, and work 40 hours a week for 40 years.  At the equivalent in today's dollars of $25/hour, he could earn about $52,000 per year.  He would also receive full medical insurance for his family with no deductible, a union pension plan, and Social Security on his retirement, along with Medicare. His kids could attend free public schools of excellent quality, then outdo the Old Man (to his satisfaction) by attending Michigan State or the University of Michigan virtually for free.  I'm not saying that I would want that life, but America made such an existence possible back then.  A man could live with dignity, raise a family, follow the Lions on Sunday TV, play poker and go bowling, and die a reasonably happy man.  In a lot of ways, as Jack Nicholson told us, that's As Good As It Gets.

Increasingly, that's all gone.  This is what Stockman is writing about.  Of the 133 million jobs in America, how many are now Breadwinner Jobs?  About 66 million.  How many Breadwinner Jobs existed in America in 2000?  About 72 million.  The jobs being added during this "Recovery" are all part-time or lower-paying jobs (McJobs of the barista, restaurant, bartending, Walmart Greeter variety) or those of the "HES Complex," referring to health care (nursing home workers, home health care) education (diploma mills siphoning off money from the Student Loan Bubble), or social services.  The HES jobs are derivative of government spending, one way or another, and are an artifact of our preferred approach to our declining fortunes, the borrowing or outright hallucination of money. 

The "internals" of the job market are obscured by the relentless focus on "GDP" (a dumb beast of a statistic if there ever was one) and "growth."  Mr. Krugman and his ilk talk about "jobs," but they do not get down to the granular detail that an angry renegade like David Stockman does (who is motivated to skewer everybody, of whatever political persuasion).  This is what makes Stockman so valuable.  In Krugman's case, his obfuscations are because he's in the tank for the Obama Administration and his buddies on the Federal Reserve Board.  While Krugman makes no secret of his belief that Obama is doing everything wrong (Obama is not borrowing and spending enough), Mr. Krugman also wants you to believe (it helps if you can achieve a headstand with a full-length mirror for this one) that Obama is doing everything right, because of the recovery, which is so much better than anything Mitt Romney could have done.

The larger point being: it's better for The Powers That Be if you go along with the gag that we're getting somewhere, even if we aren't.  Even if we're so obviously moving backwards. Thus, the emphasis on "GDP."  In a society where wealth is so grossly unbalanced, so ruinously concentrated at the top, growth in GDP might simply mean that Jamie Dimon has added another 10,000 square foot guest house on his Hamptons estate.  It's better if we say the unemployment rate is going down, without a lot of messy detail about what kinds of jobs are being "created" in the recovery, or how many people have simply given up looking for work and dropped out of the U3 denominator.  Ben Bernanke likes to talk about the "wealth effect" of a soaring stock market engendered by money printing - a wealth effect for whom?

Even if you concede that the Breadwinner Jobs have been replaced by McCrap Jobs, you're not quite done yet.  Because the total number of jobs, period, has not increased significantly over the last 12 years, certainly not with respect to the "job entrant" category of at least 125,000 per month (Stockman uses 150,000 per month, but I'm not quite the polemicist he is).  Let us say that this latter number is about 1.5 million new workers per year, over and above deaths, retirement and other ways of escaping this lousy job market.  Between 2000, when there were a total of 130.8 million "non-farm payroll jobs" (and it may be easier to keep 'em down on the farm, after they see these data), and late 2012, when there were 133.5 million NFP jobs, America added 2.7 million jobs, of whatever quality. This needs to be measured against about 18 million new job entrants.

Stockman calculates that we've added about 18,000 jobs per month over the last 12 years (his numbers cannot be derived from my calculations above because he uses slightly different assumptions, but there's no material difference).  There has been no net gain of "Breadwinner Jobs" during this period - not a single job.  We've lost 6 million of those.  Yet of whatever quality the putative jobs may be, another question naturally arises:  How can we have only 2.7 million jobs more now than in 2000 and yet only post 7.5% as the U-3 unemployment rate, when the job pool (the denominator) grew by 18 million?  Where did all the people go?

I don't actually agree with David Stockman's emphasis on the Fed's "easy money" policies as the font from which all of America's economic travails flow.  I am afraid it is much more serious and intractable a problem than that.  In some ways he is like Krugman on that score, since Mr. Krugman is forever talking about stimulus spending until the American economy "gains traction" again.  In essence, Mr. Krugman is making a fundamentally circular argument: he is arguing that the Bubble Years of 2000 to 2007, where Americans could spill an extra tril per year into the consumer economy, can be regained on a sustained basis, and that the aberrant trend line of this one-off event can become the permanent state of affairs.  Yet even those Bubble Years did not produce Breadwinner Jobs, and without such employment, there is no foundation for sustaining such prosperity.  Put another way, what is the evidence that more Keynesian stimulus of the economy, with its concomitant increase in the debt load and fiscal imbalance of the federal budget, will lead to the massive creation of Breadwinner Jobs necessary to handle such debt and sustain such a trajectory?

Stockman's approach is to establish the "sound dollar" such as existed under the former gold standard, and to limit government spending to that which we're willing to pay for with current taxes.  To give up the money printing games, the Quantitative Easing, the American Snake Eating Its Own Tail, in other words.  Given the demographics of current America, with its aging Baby Boom population (you rang?), the utter dependence of so many on present government largesse, the breakdown of the American economic contraption caused by globalization and high energy prices, Stockman is simply sketching out a different Road to Perdition.  Both Mr. Krugman and Mr. Stockman are dabbling in fantasy, but they sell different kinds of books as a result of the choices they make.

Mr. Krugman's Science, Part 8: A Little More Stockmania

Probably the most interesting chapters of David Stockman's "The Great Deformation" concern what he calls the "BlackBerry Panic" of 2008, when Lehman Brothers went belly up and Hank Paulson was manipulating Congress with his warnings about "tanks in the street" unless his buddies (and former co-workers) received massive inputs of Federal cash.  Using a lot of data, Stockman puts on a pretty convincing argument that Wall Street's woes were its own; there were no broader implications for the Main Street economy where you and I live.  Rather, it was the relentless hype by Treasury Secretary Paulson, aided and abetted by his sidekick, Ben Bernanke, who wanted to preside over his very own Great Depression II (having literally written the book on the first one), that convinced the American people that we faced Armageddon unless we allowed the government to make good on all the reckless gambling carried on by the Wall Street Gaming Commission (Goldman Sachs, JP Morgan Chase, Merrill Lynch, Bear Stearns, AIG, et al, everyone except the sacrificial lamb itself, Lehman Bros.).

Stockman's provocative point is that it was completely unnecessary to bail all these casinos out.  The crash of Lehman Brothers (you might think of it as maybe the Flamingo, as opposed to JP Morgan Chase's MGM Grand and Goldman's Bellagio), a mid-sized gambling hall which made all the same stupid bets as its larger Mob Brethren, was simply another bankruptcy.  The Wall Street meltdown was self-contained.  It would have burned itself out "in the canyons of Wall Street," as Stockman puts it.

This viewpoint is not part of the official Manufactured Consent, of course.  Yet it holds up well under scrutiny.  The detonations on the Strip in southern Manhattan mainly concerned the lousy deals ("shitty deals," as Senator Carl Levin called them in Senate hearings when he grilled Goldman execs) put together as subprime mortgage-backed securities (MBS).  These, however, were a fairly small part of the overall mortgage market, the "private label" MBS that were too flaky even for Fannie and Freddie to underwrite as GSE-backed loans.  Since Goldman and the other gaming establishments were so highly leveraged (at about thirty to one), even a small decline in the value of these shitty deals spelled doom, funded as they tended to be with "hot money" (short-duration overnight loans from the shadow banking system - yes, it's a labyrinth, America's Underworld of arcane finance).  If you've seen the movie "Margin Call," you get a sense of how all of this works. Outside investors such as the preternaturally brilliant Michael Burry (lionized in Michael Lewis's The Big Short), Kyle Bass and John Paulson made fortunes betting against the stupid bets made by the likes of Bear Stearns and others.  AIG's "Financial Products" division allowed the casinos to hedge their bets with side deals (CDS, or credit default swaps) on the mistaken premise that housing prices (the collateral for all those subprime loans) could only go up and never down.  Thus, when AIG-FP failed, Treasury Sec Paulson kindly directed a ton of money to AIG which it could use to pay off the CDS "insurance" to Goldman, the BofA, Wells Fargo and the rest of the bankster-roulette players.  This was the infamous "backdoor bailout."  All in all, the whole fiasco was an Inside Job.

The effects on the broader economy in America were derivative; the failure of subprime mortgages caused a lot of houses to sink beneath their loan levels (go underwater), and the distressed properties in overbuilt America, suddenly released onto the real estate market, exerted downward pressure on prices, reversing some of the meteoric rise of prices during the Bubble Years (180% between 1996 and 2007).  There were heavy casualties in the housing industry, of course, both in finance and construction, and particularly in industries related to housing, massive job losses began in late 2008 and continued to the spring of 2009.  And then, by June, 2009, the recession was declared officially over.

The knock-on effects of the deflating housing bubble mainly arose from the end of the House-As-ATM era, the "mortgage equity extraction" process which had dumped about an extra $1 trillion per year into the American economy between the turn of the Millenium and 2006, when the Bubble reached its apogee.  Since America is primarily a "service" and "consumer" economy, the effects on manufacturing, agriculture and mining were not significant.  It's just that the Planning & Tanning Economy took a massive hit in the chops, as Americans once again faced the tough question in America: what the hell do I do now? And where do I get the money to do it?

Looked at this way, the BlackBerry Panic was simply a round trip.  As noted yesterday, the country's economic fortunes have been on a gradual decline for about 40 years, except for that sliver of aristocrats who can leverage world trade or dominate one of America's monopolies.  For the Booboisie who must compete with the world's labor market, it's a different story.  Occasionally, the fecund American mind conceives of a way to break the monotony by producing Bubbles:  Internet IPO offerings (Dot.Com) followed by the housing bubble.  These are enabled, as Stockman notes, through a combination of (a) ultra-low interest rates by the Fed married to (b) the dollar as the world's reserve currency, which supports, for now, our periodic indulgences in faux-wealth creation.  The actually wealthy, the Dons of Wall Street, can meanwhile manipulate the federal government (and American public opinion) and convince us that their setbacks are our own.

Viewed in this way, we can see that Ben Bernanke's main "policy corrective" of Quantitative Easing, buying up, among other things, a lot of MBS and Treasury bonds with hallucinated money (almost all of which winds up on bankster ledgers as "excess reserves") is just more of the same.  It supports "asset prices," stocks, bonds and, to an extent, housing.  Pew Research has demonstrated that since this money-printing began in 2009 the top 7% of America's pyramid of wealth have seen their portfolios increase about 28%; the Booboisie (the rest of us at lower sedimentary layers), the leftover 93%, have lost about 4% of our net worth.  Same, that is, as it ever was.

Who cares if it don't work (to quote Lamont Shadowskeedeboomboom in Mad Magazine)?  Ben Bernanke works for a banking cartel, and he's nursed the survivors from the 2008 Putsch back to opulent wealth.  The rest of us can go screw ourselves, as we are wont to do.  Noted New York Times columnist, and Chief Carnival Barker for the Status Quo, Paul Krugman, runs cover for his Princeton colleague. Krugman likes our Bubbles (he famously called for one in the early 2000's as a means of recovering from the Dot.Com bubble - Krugman is the Lawrence Welk of public intellectuals).  Look, Paul, why don't we just thank our lucky stars we're out of the recession, we're bumping along, and let it go at that?  Stop the QE and let the stock markets and the Casino Managers take a hit, for once.  Join us down here on the abbatoir floor, where the fun is.

Mr. Krugman's Science, Part 7

On Monday the 29th of April the good professor (Mr. Krugman) laid it out:

So what could we do to reduce unemployment? The answer is, this is a time for above-normal government spending, to sustain the economy until the private sector is willing to spend again. The crucial point is that under current conditions, the government is not, repeat not, in competition with the private sector. Government spending doesn’t divert resources away from private uses; it puts unemployed resources to work. Government borrowing doesn’t crowd out private investment; it mobilizes funds that would otherwise go unused. 

Now, just to be clear, this is not a case for more government spending and larger budget deficits under all circumstances — and the claim that people like me always want bigger deficits is just false. For the economy isn’t always like this — in fact, situations like the one we’re in are fairly rare. By all means let’s try to reduce deficits and bring down government indebtedness once normal conditions return and the economy is no longer depressed. But right now we’re still dealing with the aftermath of a once-in-three-generations financial crisis. This is no time for austerity. 

Essentially, this is The Krugman's Weltanschauung:  he writes many columns, many blogs (an unglaublich number, in fact), and essentially this is what they all say.  Along with saying that he's right about everything, as often as he can.  Mr. Krugman is comically insecure about his ego; his relentless self-promotion alone makes it fun to read along.

Yet I'm grateful for this summation by Mr. Krugman, Scientist.  Mr. Krugman, by referring to a "once-in-three-generations financial crisis," must mean, of course, that our present predicament is like the Great Depression of the 1930's.  Therefore, if we use tools such as those employed to lift the United States out of the Great Depression (specifically, starting a world war), or, more humanely and conducive to international esprit-de-corps (and more fun), preparing for an alien space invasion, we could end this silly downturn and return to prosperity.  "For the economy isn't always like this."

When I read Mr. Krugman's Science, my impression is that he views an economy as a sort of econometric abstraction.  Real people live in it and try to derive a livelihood from it, and in a way it's part of the natural world (you know, Earth), but the idea of "cycles" implies that whatever this abstraction is, it behaves over time in more or less predictable ways, and it can be fine-tuned and modulated by human intervention so that it performs optimally, producing 2% inflation, unemployment at 5% honestly calculated, and a generally rising standard of living with a strong middle class, right here at home.  That's the thesis. 

In 1930, three generations ago, the Earth's human population was about 2.07 billion people.  India was a British colony and essentially medieval, as was China.  Agrarian, rural, subsisting in villages and poor urban centers.  Certainly these countries were no threat to the United States or Europe as economic powers.  Latin America, Africa and the Soviet Union were either extremely undeveloped or mired in unworkable Communism.  The United States was energy independent and the world's industrial powerhouse.  It seems very likely that the Great Depression can be characterized, given all this, as a self-inflicted wound.  The means to recovery were always at hand: plenty of land, plenty of fresh water, plenty of manpower, plenty of energy, plenty of all natural resources, plenty of everything, and no significant international competition which threatened any of these things.  Thus, when the United States, still gripped by the effects of the Great Depression, mobilized to meet the challenges of Fascism, the veil fell from our eyes and we realized we had had the means to become rich all along.  There followed thirty years of prosperity such as the world had never seen.  I personally came of age during that era, and I must say: damn, it was nice.

Today there are 7 billion people in the world.  The CO2 concentration in the atmosphere has risen to about 385 parts per million, or .04% of the air we breathe (up from its historic, CRC-listed level of .03 - think about that).  There are those who argue cogently that we face near-term extinction as the result of our destruction of the atmosphere and oceans.  What might save us from this fate is the economic collapse that seems built into the interlocking system of international fiat currencies and mutually-dependent economies.  Door One or Door Two?

Brazil, Russia, India and China (the BRICs) are rising economic powers, competing mightily with the United States in world trade and utilization of natural resources, especially oil.  Our once-vaunted middle class has been hollowed out by offshoring of labor and dependence on cheap labor markets for our daily goods. Automation threatens many of the remaining manufacturing, "value-added" jobs.  The Big Box revolution has destroyed the Main Street mercantile businesses. Big Ag eliminated the family farm and the agrarian life that employed 20% of the United States in 1930. 

On Monday night I attended a lecture at the Jewish Community Center in San Francisco (what, you gotta problem with that?) where Eliot Spitzer gave an impassioned, highly cerebral talk on the American economy and the general state of our democracy (one can see why The Powers That Be needed to lay this man low - how could the oligarchs get on with Fraud As Our Business Model with this guy in the way?).   Mr. Spitzer, an authentic liberal Jewish New York intellectual, laid particular emphasis on this chart:

We all got rich together until about 1975; then the middle class began to lose ground, as the effects of globalization began to kick in, as jobs left for cheaper labor markets, as a relentless surge of mergers & acquisitions created larger and larger monopolies which could "leverage" the global trade and access the cheap labor markets, turning Americans into menial "consumers" who could not keep up with the general increase in wealth, which was in turn concentrated in fewer and fewer hands.

 

Thus, Mr. Krugman, is it really cyclical?  Or are you part of the Cargo Cult which stands on the shore and waits for the masts of the distant ships of prosperity to appear over the horizon?

 

More on this gripping tale in the days to come.

Matt Taiibi in Rolling Stone on the Utter Corruption of the Big Banks

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425?print=true

Read Matt Taiibi and discuss among yourselves.

Book Report: David Stockman's "The Great Deformation"

This is a very satisfying book.  What makes it compelling is the sense of utter "knowingness" and objectivity that pervades the analysis.  Stockman, after all, was Ronald Reagan's Budget Director before he entered the private sector (still quite young) as a Wall Street trader with Salomon Brothers, then perhaps the most respected investment house in Manhattan.  So he's seen the financial shenaningans from both sides - the Wall Street grifters, the power players in Washington, D.C. who are on the receiving end of all that corporate lobbying money (he served in the House of Representatives). He does not come at his commentary on the American economy from a partisan viewpoing; no one is spared, not even Reagan.  The book is politically agnostic.

The writing, in fact, seems to emerge from one other persona on his c.v., his years as a divinity student at Harvard.  Its tone is moralistic, and American in an old-fashioned way.  What he decries, what lies at the base of the Great Deformation, was the decision in 1971 to take the dollar completely off the gold standard, the Camp David agreement that is often called Bretton Woods II. After that, the nations of the world operated under the "floating currency contraption" that we now use. 

I don't really know what I think about the gold standard as the basis for issuing money.  There is nothing particularly "natural" about calibrating the issuance of markers for wealth (money) in terms of the amount of a metallic element with the atomic number 79 which has been found so far.  That gold is comparatively rare was the big point in its favor, I suppose.  If paper money must be "backed by gold," then an upper limit on the amount of currency that can be printed is established.  Without it, we wind up with what we have now, "currency wars" among the various central banks internationally, with the spectacle of nations seeking actively to create inflation in their economies and to devalue their currencies so that their exports are cheaper on the world market.  Japan is presently set on this course, with turbo-charged quantitative easing that makes Bernanke's money printing seem tame by comparison.

And, of course, as Stockman points out, there will always be the temptation at central banks to make up for lost growth and prosperity in a country by just printing the money that we can't "earn" otherwise.  The American housing bubble is his Exhibit A, that fantastic run-up in prices between 1998 and 2006, where the booboisie went on a mad rampage of MEW (mortgage equity withdrawals) through refinance, lines of credit and flipping of houses that went ever upward in price.  Stockman estimates that between about 2001 and 2006, about one trillion dollars per year were spilled into consumer spending by means of the house-as-piggybank. It was the era of flatscreen TVs, granite countertops, weekend buying sprees at Home Depot to plush out all that home improvement, new cars in the driveway paid for with 30-year financing on the house.  What wasn't to like?  We were rich! For a while.

 All of it was enabled by a compliant Federal Reserve (which kept benchmark interest rates in the sub-basement), the "GSE" twins, Fannie and Freddie, and Wall Street's packagers of mortgage-backed securities, along with the "ownership society" craze begun by Clinton and taken to delirious heights by Bush.

While all of this was going on, in those halcyon days of the first half of that long-gone decade, the American commoner made very little real progress on the employment front.  Wages were stagnant, the job market was moribund, and there was no actual economic reason, other than bubble finance, that the housing market should have appreciated in value (on average, 15% per year) at such an insane pace.  It wasn't as if Americans could actually afford these houses on their paychecks.  It all depended on gimmicks: low or no down payment, sketchy documentation, negative amortization, adjustable rate loans, and a central bank willing to keep interest rates at a level amenable to the Wall Street and GSE trash compactors, who smashed together all these garbage loans into tranched exotica.  No more brick & mortar banks with a loan officer (a friendly guy who looks and sounds like Jimmy Stewart) perusing your loan app in a kind and sympathetic way, appraising the likelihood that his bank, which will originate and hold the loan on its own books, will get paid.  No, now the mortgage business was turned over to coked-out grifters at Bear Stearns who needed "inventory," loans by the thousands so they could make their bonus and stay current on the Hamptons house and the prostitute/girlfriend's Manhattan apartment.

Modern America, in other words.

It was fun while it lasted.  It replaced the dot.com bubble, which tended to favor a narrower group of investors and tech entrepreneurs.  The housing bubble was far more democratic - almost everyone felt the "wealth effect."  Stockman is at pains to point out that it was all a chimera, a case of borrowing from the future and blowing the moolah now.  Now we're back to the same dead-ass job market, the same flatlining wages, and the same dismal prospects as would have existed in 2004, say, save for the distended housing bubble stretching to its gossamer thinness over the McMansion-strewn hills of America.

Bernanke, that plucky and indefatigable counterfeiter, is doing what he can to reinflate the bubble, on Wall Street and in the housing market.  He wants America to have those good feelings of being rich again, but all he seems to be doing is comforting the comfortable and leaving the afflicted as he found them.  Since he started printing money at warp speed in 2009, the top 7% of America's aristocracy have increased their net worth by 28%, while the bottom 93% have gotten nowhere at all. 

Stockman's idea is that we should probably try to do something real for a change instead of just playing financial games with interest rates and money printing.  Yeah, I guess.  That sure sounds like a lot of work, though.

It's Time to Move On (Again)

April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain. - See more at: http://www.poets.org/viewmedia.php/prmMID/18993#sthash.3x6GMdHH.dpuf

April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain. - See more at: http://www.poets.org/viewmedia.php/prmMID/18993#sthash.3x6GMdHH.dpuf

April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain. - See more at: http://www.poets.org/viewmedia.php/prmMID/18993#sthash.3x6GMdHH.dpufAApril is the cruellest month, breeding 

April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull rocks with spring rain.

T. S. Eliot, "The Waste Land."

As I understand matters, we are not to be intimidated anymore by terrorists.  Speaking for all of us, President Obama has declared on national television that we are no longer afraid.  The incomparable (and often incomprehensible) Tom Friedman of the New York Times concurs: 

"And while we are at it [not being afraid], let’s schedule another Boston Marathon as soon as possible. Cave dwelling is for terrorists. Americans? We run in the open on our streets — men and women, young and old, new immigrants and foreigners, in shorts not armor, with abandon and never fear, eyes always on the prize, never on all those “suspicious” bundles on the curb. In today’s world, sometimes we pay for that quintessentially American naïveté, but the benefits — living in an open society — always outweigh the costs."

Just a quick memo to Tom: I'm virtually certain that organizing the Boston Marathon is a year-round activity, and as soon as the current one is finished, plans begin for next year.  In fact, let me look that up for you.  Okay, that wasn't too tough.  Here you go:  http://216.235.243.43/races/boston-marathon.aspx The Boston Marathon is organized and run by the Boston Athletic Association, and plans are underway for the 2014 running of this annual event.  My idea would be to wait until the third Monday in April of next year, just like always, although in theory I'm sure a second Boston Marathon could be organized in a couple of weeks if you think it's necessary to demonstrate our steely resolve. 

As for our obliviousness to "suspicious bundles," I'm pretty sure, if memory serves, that at airports and stadiums, aboard public transit, on train platforms, signs are everywhere now that urge everyone to report "suspicious bundles," and the U.S. Post Office has definite policies on how big a package can be jammed in the corner mailbox, just as another example.  We're also told that if we "see something" we should "say something."  My local CVS Pharmacy has half an aisle devoted to "travel size" everything: eye drops, tooth paste, anything else that can be reduced to four ounces. 

Also, our nonchalance in the face of danger would probably come as something of a surprise to the families of about one million Iraqi dead, or the 5 million or so displaced refugees in that country.  We should also mention the 5,000 or so American dead, and the wounded, maimed, amputated, blinded and insane soldiers in numbers probably at least ten times that amount who served the country by fighting essentially symbolic wars in Afghanistan and Iraq, the latter war to protect us from weapons that did not exist, and the former so that Osama bin Laden, who was living in Pakistan, could not use Afghanistan as a base of operations, that is, if he felt like going back to Afghanistan.

Not that I consider myself uncommonly courageous (not at all, in fact), but I was pretty much with the new program as of September 12, 2001.  As I recall, it was actually the country's leadership (Bush & Cheney) who hyped the bejesus out of the threat of terrorists, as they warned us of mushroom clouds and, in Bush's words, "an enemy who lerks."  Every time we felt like relaxing, they would stir up hysteria again by warning us of the crazed legions of Muslim terrists who spent all day dreaming up ways to mess with us, envious, as they were, of our freedom.  A freedom which Tom Friedman now openly urges us to flaunt, as we run around in our underwear with our eye on the prize, although he notes that among those running around on the streets were "foreigners and new immigrants," which was certainly the case in Boston, and that just shows you what can happen when you're trying to write some pulpy paean to American fearlessness before the news cycle has gone all the way around.  You know?

Well, I got that wrong, too.  It turns out the culprits were a couple of Chechen whack-jobs that we more or less imported for reasons best known...to nobody, but if you survey the pre-history to the entry of the 9-11 hijackers into the United States (available in the Report of the 9-11 Commission), you will see that there is nothing particularly new about this circumstance.  The Underwear Bomber, after all, was on Janet Napolitano's no-fly list, but he was all but given access to the Red Carpet Lounge in the course of flying to the United States.  We freely admitted the 9-11 hijackers into the country even when their visas were expired, then housed them and trained them to fly our planes into our buildings.

I guess what I'm saying, Tom, is that you don't really have to worry about Americans getting all uptight and vigilant and shit, and by next week this thing will have blown completely over. Who's got the time to focus on the Boston massacre?  Next week, or maybe the week after that, someone will open up on a crowd with one of the freely-available automatic weapons infesting the countryside, probably someone in withdrawal from a neurotransmitter drug, and then we can obsess about that for a couple of "Hardball" sessions, and then move on again, eye on the prize, with abandon and never fear, although at a certain point you have to wonder whether all this obliviousness is a mark of moral fiber or a symptom of complete societal madness.

A few reactions to Topic A from Boston

It's too bad the cable news people (Rachel & Chris & Chris & Lawrence) feel compelled to tell us what the tragedy "means" before they even tell us what happened.  They're in such a rush to package everything, to give everything a logo, that they skip over the factual details that may hold the actual answers they pretend to seek.  However, I have an uneasy feeling that MSNBC and CNN and Fox are not going to be able to give this one a "clothing label" (Shoe Bomber, Underwear Bomber) and be done with it.  This terrorist operation does not have the Keystone Kops kharacteristics of the Times Square terrorist who managed to lock himself out of his own car (bomb), nor is it one of the entrapment scenarios the FBI concocts from time to time where they recruit a bunch of incompetent jihadists to participate in a half-ass, dead-end plot that the FBI rushes in to disrupt at the last second (before the plot was about to fail).

No, what this incident seems most like, what it calls to mind, is an IED set off in Baghdad.  The talking heads seem loath to confront that possibility, and for understandable reasons.  That's not something they want to get into.  They want a corporate "handle" for this incident that makes it titillating and exciting and above all heroic and self-congratulatory, to confine it to the current news cycle, so Americans can pay attention for a couple of days, feel good about themselves, and then move on with their lives.  So Rachel Maddow will talk earnestly to MSNBC's go-to terrorism experts who will discuss in general what motivates people to blow up other people while carefully avoiding any explanation that sounds too serious. Or too likely to provoke any soul searching on our part.

But think about it: if you've read accounts of how improvised explosive devices are used in Iraq and Afghanistan, they seem exactly like what happened yesterday at the finish line of the Boston Marathon.  A bomb, maybe in a backpack casually left behind, is planted somewhere (watching the news for several hours last night, I was never able to find out exactly where, but one runner's account reported in the New York Times suggested one of the bombs was in a Starbuck's).  The bomb contains high explosives and a detonating device, maybe a garage door opener which can be signaled with a cell phone.  The bombs detonate a few seconds apart.  This could result from a signal from one cell phone or maybe two, from a lone jihadist or maybe a team.  Logic suggests that more than one person was involved.  One or more operatives to walk along the crowded sidewalks with backpacks, armed and ready to blow, while their co-conspirators wait a safe distance away with cell phones.

It's easy, really, and what's always amazed me is that, given the phenomenon the CIA calls "blowback" (anti-American sentiment from our many wars in Muslim countries), this sort of thing doesn't happen more often, even routinely, the way that mass shootings with automatic weapons have become routine in American life.  In part, it has seemed to me that the fatal flaw for the jihadists is their preference for the spectacular or the unnecessarily difficult: 9/11 illustrates the preference for the Big Score, but the Shoe Bomber and the Underwear Bomber demonstrate the fallacy of attempting a terrorist attack in circumstances where (a) the actual detonation process becomes obvious to those around the terrorist and (b) the operative becomes emotionally overwhelmed because he knows he's going down with the plane.

If the hypothesis is correct, that yesterday's tragedy was a jihadist operation involving remote-signaled IED's, then we now have a helluva problem on our hands.  For one thing, the perpetrators are no doubt still at large.  For another, it presents us with the disquieting feeling that the War on Terror (TM) has come home.  Our "liberal" news outlet, MSNBC, doesn't quite know what to do with that. They can "oppose" the Iraq War, for example, once general public opinion has made it safe to do so, but they can't begin talking about logical consequences of having fought the war in the first place. Such as the likelihood that jihadists would come over here and start detonating IED's in Boston and other American cities exactly as they've shown they can do in Muslim war zones.

Instead, Rachel Maddow "interviews" Ron Suskind, who assures everyone that the bombers "cannot win" because of some peerless quality the American people supposedly possess where we cannot be frightened or intimidated, and next year's Boston Marathon will be bigger and better than ever, et cetera.  Just don't start talking about "blowback."  We prefer the "lone American nut" thesis.  We prefer the randomly pathological to the logically political, because that way we're always right, and we don't have to entertain any uneasy thoughts about how maybe we should have seen this coming.

Time will tell.  In the meantime, the MSM will blather on about this incident's "place in history" and the rest of it.  I thought, oddly enough, that the real star of last night's news shows was a young trauma surgeon at Mass General named Peter Fagenholz.  He answered reporters' questions cogently, directly, after a long day in which he had performed six emergency operations on grievously wounded civilians.  No speculation from him.  He was humble and obviously supremely competent. Tellingly, he acknowledged the help he'd gotten from a fellow surgeon who had spent tours in Iraq and Afghanistan and who was familiar with the kinds of injuries the docs dealt with all day yesterday.

Guest Post: Rob Urie on Obama's Latest Sell-Out

Whenever I see a Rob Urie post on Counterpunch, I hasten to read it.  Mr. Urie is described as an "artist and political economist," an interesting combination that seems to produce lapidary prose and brilliant insight.  He is much better than I have been about explaining how it all fits together economically, but then composition is the essence of art.  He addresses such questions as why, precisely, Barack Obama, for example, is so utterly "Hopeless (TM)" as a liberal leader and little more than a clueless stooge of Wall Street lobbyists.  If you read enough of Rob Urie, you might give up your tendency to post Facebook pleas to Mr. Obama "to do the right thing."  He is never going to do the right thing, and it doesn't matter if he's given a third term.  With that, I turn the floor over to Mr. Urie.  His analyses are dense and intellectual, and presented often at a high level of abstraction, but I think it's all there: a true comprehensive overview in the manner of the great social theorists.

http://www.counterpunch.org/2013/04/12/obama-does-social-security-and-medicare/

Saturday Morning Essay: Mr. Krugman's Science, Part 6

One of my purposes in attempting to demonstrate the pro-status quo bias of the fearless Liberal, Paul Krugman, ace economist for a great metropolitan newspaper, is to encourage fellow hooper Bob Somerby, who mans the keyboard at The Daily Howler, to include Krugman in his daily thrashing of columnists at The New York Times and the Washington Post.  Bob does this exceedingly well, in a meticulous, recursive, penetrating way. 

I take it on faith that Bob exempts Krugman for reasons which are sufficient to Mr. Somerby, and that his accolades for Mr. Krugman are sincere.  However, I can't help feeling that Bob is himself a liberal who has been taken in by Krugman's self-promotion as a "Liberal" with a "Conscience" who fights for the little guy on Social Security and Medicare et cetera, and that without him we would be exposed to the slings and arrows of outrageous Republicanism.

This I doubt.  I was gratified to see that Mike Whitney, who often writes about economics for Counterpunch, has come over to my way of seeing things; that is, of seeing through Mr. Krugman.  In a recent, hilarious account of the David Stockman vs. Paul Krugman "debate" on "This Week" Mr. Whitney had this to say: 

 But while Stockman’s editorial has broad popular appeal, it’s come under ferocious attack by the liberal commentariat, who’ve savaged Stockman on issues that are largely meaningless to the average working stiff.  Obama’s primary apologist, Paul Krugman, has been leading the jihad against Stockman; pounding away at his economic theories while dismissing him  as a “cranky old man”. 

 Whitney narrates the play-by-play as he continues:

Krugman, one last time:

“This isn’t about machinery, it’s about people and visions. We have two parties who have fundamentally different visions of what America should be. We have Democrats, who want the expansion of the safety net and have gotten it in Obamacare. They want it to be even more. And we have Republicans that want to dismantle a lot of the legacy of the Great Society and the New Deal.”

This is such nonsense. What difference have we seen under the Dems?
Zilch. The drones, the wars, civil liberties, regulation, spying, Guantanamo; you name it, it hasn’t changed a bit. Same shit, different leader.
Obama claims he can kill a US citizen without charges or trial, but Krugman maintains the Democrats have “fundamentally different vision of what America should be.”
Uh huh.
Finally, Stockman goes in for the kill.

“The (Democrats) don’t stand for anything.
They don’t believe in anything. Why do we still have Too Big To Fail? We allegedly had a heart attack, the banks are bigger than ever. Why don’t Democrats do something to break them up and cut Wall Street down to size?”

And that’s how it ended, with Krugman backing up against the ropes while Stockman delivered one haymaker after another like a windmill spinning in a gale-storm.

That's great stuff.  The animus against Mr. Krugman is pretty apparent from the imagery Mike Whitney uses: he imagines David Stockman simply beating the shit out of  Krugman once and for all.
The essential point that I think people miss about Mr. Krugman's science is that Krugman deploys his science (private joke: in the same sense that Percy produced science) as a political operative who carries water for the Democratic Party, and for that wing of the Party known as the Democratic Leadership Council (the DLC), the Clintonian, Robert Rubin, Larry Summers, sell-out wing of this once-great institution who ushered in the Casino Capitalism of modern America with their relentless drive to deregulate and turn Wall Street into Vegas-on-the-Hudson.

That is what David Stockman is writing about in The Great Deformation and in his Times essay which sent Mr. Krugman into paroxysms of rage and jealousy.  Mr. Krugman wholeheartedly supports the money printing operations of the Federal Reserve, but does not bother to explain (as Stockman does) the mechanics by which the Too Big to Fail banks use this endless stream of largesse to play the stock market and become Too Bigger Even to Fail.  Stockman does explain how this comes about.  I've wondered about the differences in their approaches; does Krugman give the Fed Reserve a pass because his Princeton colleague runs the Fed? Or is it because Mr. Krugman is a pure academic who simply doesn't understand how things actually work in the business world, but pretends that he does?

Whatever the reason, the result is as Mike Whitney says: Mr. Krugman is simply an apologist for the Crony Capitalist-Hugging faction of the Democratic Party, who sheds crocodile tears for the plight of the American Commoner as his logo and cover story for self-promotion. 

Anyway, Bob: take a closer look.  You do a great job savaging the bullshitters on MSNBC.  Your series on Chris Matthews and his efforts to rewrite his history as an Iraq war hawk were priceless.  But that's the point: what happened to a genuine anti-war crusader like Phil Donahue on MSNBC?  They got rid of him.  What would happen to a New York Times columnist who wrote a sincere economics column that took on the Wall Street casino and the corruption endemic in the two-party system?  Gone in a New York Minute.  What happened to Bob Scheer, a relentlessly honest journalist who used to write for the Los Angeles Times until he became too hot to publish?  Bob Scheer, who had this to say about David Stockman, by the way:

“Why is David Stockman driving everyone crazy?…What’s all the outrage about?…
The headline on Stockman’s piece—“State-Wrecked: The Corruption of Capitalism in America”—is unquestionably accurate…..What his critics find so disturbing is not a quaint argument about the purity of monetary policy but rather the bold assertion that the overall American system of crony capitalism is in fact wrecked. This is a contention that most Americans might readily agree with in terms of their daily experience, but one that the hardly suffering pundit class would rather not contemplate…
Bernanke, who throws $85 billion a month at the bankers who caused this mess, purchasing their toxic mortgage based derivatives, is still treated with respect. But Stockman, who opposed bailing out the banks so they, like those tens of millions of foreclosed homeowners, could learn a tough love lesson in real economics, is now an object of derision…
That fiasco’s enablers—Alan Greenspan, Robert Rubin and Lawrence Summers—and the more disastrous ones to follow were crowned “The Committee to Save the World” on Time magazine’s Feb. 15, 1999, cover and are still welcomed in those polite circles where truth-teller Stockman is being treated as a pariah.”

Cage Match Clash of the Dry Lab Titans of Economics

And yet, I can't be serious.  I can't seriously believe that simply printing money will lift the industrialized countries out of the doldrums and usher in a new era of prosperity.  This is all a variation on Yossarian & the Bomb Line, that perfectly written scene where Yossarian changes the map in the middle of the night so the squadron doesn't have to fly the dangerous mission over northern Italy.  The aviators had stared at the bomb line day after day, willing it to move beyond the danger point so they could fly another milk run, not a life-and-death battle in the sky. 

Clevinger plays the role of the rationalist:

When night fell, they congregated in the darkness with flashlights, continuing their macabre vigil at the bomb line in brooding entreaty as though hoping to move the ribbon up by the collective weight of their sullen prayers. "I really can't believe it," Clevinger exclaimed to Yossarian in a voice rising and falling in protest and wonder. "It's a complete reversion to primitive superstition. They're confusing cause and effect. It makes as much sense as knocking on wood or crossing your fingers. They really believe that we wouldn't have to fly that mission tomorrow if someone would only tiptoe up to the map in the middle of the night and move the bomb line over Bologna. Can you imagine? You and I must be the only rational ones left."

In the middle of the night Yossarian knocked on wood, crossed his fingers, and tiptoed out of his tent to move the bomb line up over Bologna.”
― Joseph Heller, Catch-22

Just to read that scene, and so many others like it, has made life worth living.  Heller was that good. 

Printing money is the monetary equivalent of Yossarian's action.  One might first ask, why are all the big central banks printing money like there's no tomorrow?  The Federal Reserve, the Bank of Japan (at Mach 3), the European Central Bank.  They are cheered on by the Keynesian true believers, such as the chief economist at the New York Times, Professor Paul Numbnuts.  Indeed, all of this hallucinated money is again blowing massive bubbles in the stock exhanges and housing markets.  Bomb lines are being moved in the dead of night.  Will morning ever come?

I watched, in an unedified way, the Economic Cage Match between Prof. Numbnuts and David Stockman, former head of the OMB under Reagan, former divinity school grad student, former Wall Street con man, on George Stephwhatever on Sunday's "This Week."  Stockman had had the unmitigated gall to publish, in the Times itself, a long screed on the many sins of the American economy over the last....80 years.   It was, in fact, a little too much.  It's true that the American economy has run out of gas, insofar as the fate of the American commoner is concerned.  (Large corporations are doing fine, because of the international nature of their business and because their current practice is to hire R2D2, not carbon-based life forms.)  Mr. Numbnuts believes that the lot of the commoner can be lifted through Keynesian monetary (money printing) and fiscal (borrowing more money) stimulus.  It's just that we won't do it.  It's so simple, it's sitting right there, and we won't do it. 

Stockman, on the other hand, is a Debt Freak.  Everything is about debt - public, private, international, whatever.  Too much of it, wherever you look.  Adding more debt to a debt-saturated economy is not going to work.

Both of these intellectual titans left out of their deliberations a factor I consider important: the real world.  Paul Krugman is convinced that this recession (which he sometimes calls a depression) can be remedied, and will be remedied, and it's only a matter of when.  It will happen sooner if we pursue the right "policy."  It will take longer (but apparently will happen anyway, despite doing everything wrong) if we keep on this "austerity" kick, meaning borrowing an insufficiently large fraction of what Numbnuts calls "potential GDP."  (Using an hypothesized number like "potential GDP," a state of affairs that does not actually exist, allows you to claim that the amounts we're borrowing are smaller than they appear to be, "as a share of GDP."  Krugman compares everything to shares of GDP - his lunch tab, his bar bill, his hat size.) 

I notice lately, however, that Krugman is beginning to show a few signs of wear and tear.  Let's face it: it was the summer of 2007 when Bush told us this sucker could go down.  The stock market tanked, millions of people lost their jobs.  We're pushing six years later.  Have we really gotten anywhere?  We have not actually created a single job.  We're stuck.  Everything the society actually needs is produced by the skeleton crew of humans and robots with actual jobs.  Numbnuts tells us that the whole problem is "insufficient demand," but that's what a Keynesian always says.  The demand matches output, and the output is sufficient.  What he's saying is that the Planning & Tanning Economy has gone away, and it needs to be revived, so that the "potential GDP" will become the actual GDP.  We must increase "aggregate demand" for Planning & Tanning.  This is, of course, utter nonsense, the result of imagining that the world conforms to an economic model that once was and now can no longer be.  Americans can't live that way anymore.  They've been reduced to basics, like filling up the tank, paying rent and getting enough to eat.

These Two Titans of Dry Lab Economics, in other words, are debating historical curiosities, the cyclical booms and busts of the past.  Analogizing forward from the irrelevant conditions that existed in 1937, or whenever, tells us nothing about a world up against the Limits to Growth, global warming and overpopulation.  It's currently Now.  But the study of Now is not what these guys were trained to do, and they can't make any money talking about it.  So they go on talk shows and prove each other wrong.  And they're both right that they're both wrong.  It's just that neither one is right about anything else.

At Last, A Real Economic Solution

First of all, you have to understand that Michael Woodford is probably the leading monetary theorist in the world.  He holds degrees from the University of Chicago, Yale Law School, and a Ph.D. from MIT in economics.  He teaches economics at Columbia University.  He literally wrote the book on the implications of monetary theory for macroeconomics.  Unlike Professor Paul Numbnuts, who writes about economics for the New York Times and won the Nobel because of his vociferous (and poorly-written) screeds about the Iraq war and the misprisions of the Bush Administration, Woodford is a genuine heavyweight, and if he won the Nobel Prize from that bank in Sweden for his work in economics, it would make some sense.

Enough preamble.  Here is what Michael Woodford had to say on the question of Quantitative Easing:

"If we are going to scare the horses, let's scare them properly. Let's go further and eliminate government debt on the bloated balance sheet of central banks," he said. "This could done with a flick of the fingers. The debt would vanish." (Quoted by Ambrose Evans-Pritchard in London's The Telegraph.)

Woodford, who's serious in general, is serious about this.  What he is recommending is that the Federal Reserve simply buy up the entire annual federal deficit (in the $1 trillion range currently) and take the entire stock of public national debt (about $11 trillion) and place it on its balance sheet, along side the $3.2 trillion it has accumulated previously, most within the last four years of "asset purchasing."

Faithful readers (and I know you exist, even if Blogger has somehow made it impossible for me to access comments anymore) will recognize Woodford's plan as a variant of my Big Buy Thesis, whereby the Fed fronts a huge loan to its pet banks (the Primary Dealer community), say on the order of $100 trillion, which is used to "purchase" a huge stock of new Treasury debt issued at an interest rate sufficient to finance the federal government's annual budget (let's say $4 trillion).  The "remittances" from the Federal Reserve to the Treasury would then be sufficient to finance the government without taxation.

It's perfect.  It's a Perpetual Motion Machine that does not confound the rules of thermodynamics. Mr. Woodford notes that the present system confines the money flow from the Fed to the canyons of Wall Street, where it winds up blowing asset bubbles in the stock market and housing sector.  If we simply acknowledge what we're doing (monetizing the debt through money printing), we can do some real societal good.  The Treasury can issue as much debt as it wants, the Fed will buy it all, and Congress can pump the free money into a national modern rail network, desalination plants, alternative energy grids, the works.

Bear in mind that Mr. Woodford is of course aware of what happened when the Reichsbank in Germany attempted something along these lines between 1922 and 1924, resulting in the Weimar hyperinflation (the archetypal wheelbarrow full of money is pictured below).  What is less well-known is that Japan succeeded with a money-printing scheme in the early 1930's and used it as a means to escape the worldwide Depression and gear up its war machine.

I am reminded of Ralph Waldo Emerson's good advice in his essay "Self Reliance," wherein he suggested that if you have an idea, even if it seems dubious and unprecedented, even a little crazy,

you should express it, because you may have come up with something original and useful.  And here I am, ratified by an esteemed winner of a MacArthur Genius fellowship.  We're in lockstep, Mike and I.  He simply hasn't figured out the Big Buy yet, which is actually superior to his idea and less inflationary, because we could pull it off before the world figured it out and reacted.  All of the freed up "tax money" (which would no longer be needed in Washington) could be used to improve society's infrastructure more or less in perpetuity.  But it's okay; don't you and I know, Mr. Woodford, that it's hard to figure it all out at once.

As Woody Allen had Larry David say in the movie of the same name:  Whatever Works.  What stands in the way is a fussy shopkeeper's mentality that has us stuck in the obsolete belief that money must bear some relationship to existing wealth, incrementally increased by organic "growth."  Balderdash.  Print the stuff, print it till we can't print no more.  Distribute it far and wide, into every nook and cranny of this fair land.  If we're going to scare the fricking horses, let's scare the fricking horses!