Sunday, November 27, 2011
Fact checking sites
Now that an election is coming up the lies and half-truths and distortions are flying thick and fast from both parties. For those who haven't already found them, I recommend the sites Politifact and FactCheck.org. Both attempt to establish the truth or falsity of political claims being made by candidates and members of the government. Both are politically neutral.
Recommended: The New Tammany Hall
Matthew Kaminski has a perceptive article in today's Wall Street Journal: The New Tammany Hall. He deals with the distorting effects of increasingly powerful public unions, who use the required dues of their members for extensive political lobbying, always pushing for bigger government and higher pay and benefits for their workers, until many localities are now facing bankruptcy. It is worth thinking about his arguments.
Friday, November 25, 2011
Highly recommended: The Age of Absurdity: Why Modern Life Makes it Hard to Be Happy
By all means get this book and read it. The writing is witty, but the message is profound.
Interest rates
I have always thought it was better, and far less painful, to learn from other people’s mistakes than to make the same mistakes myself. That thought might be relevant in light of today’s news that in Italy’s last bond sale this week the interest rate they had to offer jumped from 4.628% to 7.814% on two-year bonds, and jumped from 3.53.% to 6.504% on six month bonds. (today’s news is that their three-year bonds just jumped to 8.13%)
US Treasury notes currently sell for about 2.70% interest rates. At that rate, the US government pays about $454 billion per year in interest payments. Were the bond market to decide that our debt was as risky as Italy’s (for example, because our government is perceived to be incompetent and unable to reduce it’s debt), and require an 8% interest rate to refinance our debt as it became due, US interest payments would rise to around $2 TRILLION per year, half a trillion more than we currently borrow each year.
How bad does it have to get before the voters force Congress and the President to do something effective about this problem?
US Treasury notes currently sell for about 2.70% interest rates. At that rate, the US government pays about $454 billion per year in interest payments. Were the bond market to decide that our debt was as risky as Italy’s (for example, because our government is perceived to be incompetent and unable to reduce it’s debt), and require an 8% interest rate to refinance our debt as it became due, US interest payments would rise to around $2 TRILLION per year, half a trillion more than we currently borrow each year.
How bad does it have to get before the voters force Congress and the President to do something effective about this problem?
Recommended: Republicans And Democrats Dicker While The Deficit Yawns And Rome Burns
There is a very good piece on the Forbes website: Republicans And Democrats Dicker While The Deficit Yawns And Rome Burns. I agree completely with the author's claim that both Republicans and Democrats are lying through their teeth, and both are playing petty political power games (and many getting rich while they do it) while the nation goes ever deeper into debt and economic woes.
And I agree with his prescription - fire them all and put term limits on their replacements, and give them defined-benefits pensions like the rest of us, rather than lifetime sinecures.
And I agree with his prescription - fire them all and put term limits on their replacements, and give them defined-benefits pensions like the rest of us, rather than lifetime sinecures.
Wednesday, November 23, 2011
Recommended: SEAL Target Geronimo: The Inside Story of the Mission to Kill Osama bin Laden
Chuck Pfarrer's book SEAL Target Geronimo (2011) is likely to be the closest to the real story that one is going to find. Pfarrer himself is a former assault element commander of SEAL Team Six, which means that he knows the system from the inside. He also had access to many of the key players in the mission, including some of the SEAL team members themselves.
The story is fascinating, though it doesn't reflect well on the politicians (who made much of the intelligence gathered from Bin Laden's hideout useless by promptly announcing that they had it), nor on agencies like the CIA or the FBI, who were in many cases more a hindrance than a help. The administration's politically-motivated need to crow about the mission meant that a number of Pakistanis who had helped were promptly identified, arrested, beaten and imprisoned for their efforts. And of course a number of people and agencies tried to prevent the book from being published, and are still trying to debunk it, because it contradicted the spin they were trying to put out.
One will come away from this story proud of American special forces, and disgusted with the self-serving politicians and Washington establishment. So what else is new?
Supercommittee autopsy
Well, to no one’s surprise the Congressional “subcommittee” failed to come to an agreement last week. Democrats insisted on tax hikes, and Republicans insisted on spending cuts, and so no agreement was possible.
So what are we to make of this? Well, as I noted a few days ago, it hardly matters. If the supercommittee had actually achieved their goal of finding $1.2 trillion in cuts over the next ten years, and if those cuts had been real cuts and not the smoke and mirrors accounting tricks Congress has been producing in recent decades, it still would have made almost no difference to the ballooning federal debt. Nor will the $1.2 trillion over ten years in automatic cuts (“sequesters”) that are now supposed to kick in make any real difference, even if Congress actually allows them to occur (unlikely).
A new poll by Quinnipiac University claims that 44 percent of Americans blame Republicans for the supercommittee's failure, whereas 38 percent blame Democrats. This, notwithstanding the fact that the same poll shows, by a 49-39 percent margin, Americans prefer closing the deficit with spending cuts only. Well, we already know voters are neither consistent nor very smart. If they were smarter they wouldn’t have elected these clowns to office in the first place!
The Democrats wanted to tax “millionaires” another $1 trillion, but couple it with a new $447 billion spending bill, which kind of misses the point of a “deficit reduction” committee. Republicans, on the other hand, adamantly refused to agree to any new taxes, though they were willing to look at simplifying the tax code and getting some extra revenue that way. They probably hold this position for the wrong reasons (party ideology), but I think the position is correct anyway.
In fact, we do need to raise taxes – we simply can’t afford our current government services at our current tax rates, which is why we are borrowing almost half of the federal budget each year and going deeper and deeper into debt. The problem is that Congress, under both parties, tends to use new revenue for new programs rather than for debt reduction, and that would probably have been true in this case as well had the committee agreed to raise taxes. (and in fact the Democrats already had announced what new programs they wanted to spend it on).
Reality is that we need to cut federal spending and/or raise taxes by about $1.5 trillion EACH YEAR just to stop borrowing and halt the growth in the federal debt, let alone pay it back. The only member of Congress who has been admitting that is Rep Paul Ryan (R – Wi), and no one is listening to him.
In the end, of course, we the voters are ultimately responsible for this. These people are only in Washington because we believe their TV ads and insincere promises, or because we blindly vote for our party’s candidate, even if they are incompetent.
So what are we to make of this? Well, as I noted a few days ago, it hardly matters. If the supercommittee had actually achieved their goal of finding $1.2 trillion in cuts over the next ten years, and if those cuts had been real cuts and not the smoke and mirrors accounting tricks Congress has been producing in recent decades, it still would have made almost no difference to the ballooning federal debt. Nor will the $1.2 trillion over ten years in automatic cuts (“sequesters”) that are now supposed to kick in make any real difference, even if Congress actually allows them to occur (unlikely).
A new poll by Quinnipiac University claims that 44 percent of Americans blame Republicans for the supercommittee's failure, whereas 38 percent blame Democrats. This, notwithstanding the fact that the same poll shows, by a 49-39 percent margin, Americans prefer closing the deficit with spending cuts only. Well, we already know voters are neither consistent nor very smart. If they were smarter they wouldn’t have elected these clowns to office in the first place!
The Democrats wanted to tax “millionaires” another $1 trillion, but couple it with a new $447 billion spending bill, which kind of misses the point of a “deficit reduction” committee. Republicans, on the other hand, adamantly refused to agree to any new taxes, though they were willing to look at simplifying the tax code and getting some extra revenue that way. They probably hold this position for the wrong reasons (party ideology), but I think the position is correct anyway.
In fact, we do need to raise taxes – we simply can’t afford our current government services at our current tax rates, which is why we are borrowing almost half of the federal budget each year and going deeper and deeper into debt. The problem is that Congress, under both parties, tends to use new revenue for new programs rather than for debt reduction, and that would probably have been true in this case as well had the committee agreed to raise taxes. (and in fact the Democrats already had announced what new programs they wanted to spend it on).
Reality is that we need to cut federal spending and/or raise taxes by about $1.5 trillion EACH YEAR just to stop borrowing and halt the growth in the federal debt, let alone pay it back. The only member of Congress who has been admitting that is Rep Paul Ryan (R – Wi), and no one is listening to him.
In the end, of course, we the voters are ultimately responsible for this. These people are only in Washington because we believe their TV ads and insincere promises, or because we blindly vote for our party’s candidate, even if they are incompetent.
Tuesday, November 22, 2011
Recommended: The Two Moons
David Brooks once again has an incisive piece in the New York Times: The Two Moons. He argues that we are now in a phase when neither major party is in the majority, and both are locked into an inward-turning cycle of trying to "stay ideologically pure". It is an interesting concept, and is persuasive.
We are coming up to an election with an incumbent Democratic president who, while personally likable, is clearly not up to the job, and a number of Republican opponents none of whom seem likely to be any better at the job. Democrats are simply unwilling or unable face reality about the huge deficits our entitlement programs are producing, and Republicans are lost in a right-wing never-never land.
Our choice in the upcoming election seems to be between:
(a) an incumbent who hasn't succeeded at any of the major tasks he promised to undertake -- changing Washington's political culture, closing Guantanamo, resetting the relationship with Russia, restoring the economy, reducing unemployment, resetting the relationship with the Muslim world, getting us out of Iraq (well, we will get out of Iraq now that the Iraq government has kicked us out, but he wanted to stay) and Afghanistan, reducing the size of the massive "black" intelligence world, etc. etc.
What he has done in his first three years in office is lumber us with a hugely expensive (CBO etimated appx $1 trillion) new health care bill, Spend about $1 trillion to save Wall Street firms and the bonuses of their CEOs, and to save the jobs of auto unions and public sector unions, increase the size of the federal payroll by 7.7% (from his Jan 2009 inauguration) despite a recession (see chart below),
and increase the federal debt by about $4.5 trillion (The debt was $10.626 trillion on the day Mr. Obama took office. Three years later it has just passed $15 trillion).
or (b) one of a series of pigmy Republican challengers who either don't accept the overwhelming scientific consensus on evolution and/or global warming (Gingrich, Perry, Cain, Ron Paul, Romney), or thinks God talks to them and told them to run (Perry), or is in favor of torture (Cain, Bachmann), or can't keep their Middle East nations straight (Cain). And none of whom has proposed a viable plan for reducing the federal debt, reducing unemployment, making America more competitive in the world market, fixing our education problems, solving our energy dependence on the Middle East, solving the entitlement problem, or any of the other major issues facing the nation.
A dismal choice!
We are coming up to an election with an incumbent Democratic president who, while personally likable, is clearly not up to the job, and a number of Republican opponents none of whom seem likely to be any better at the job. Democrats are simply unwilling or unable face reality about the huge deficits our entitlement programs are producing, and Republicans are lost in a right-wing never-never land.
Our choice in the upcoming election seems to be between:
(a) an incumbent who hasn't succeeded at any of the major tasks he promised to undertake -- changing Washington's political culture, closing Guantanamo, resetting the relationship with Russia, restoring the economy, reducing unemployment, resetting the relationship with the Muslim world, getting us out of Iraq (well, we will get out of Iraq now that the Iraq government has kicked us out, but he wanted to stay) and Afghanistan, reducing the size of the massive "black" intelligence world, etc. etc.
What he has done in his first three years in office is lumber us with a hugely expensive (CBO etimated appx $1 trillion) new health care bill, Spend about $1 trillion to save Wall Street firms and the bonuses of their CEOs, and to save the jobs of auto unions and public sector unions, increase the size of the federal payroll by 7.7% (from his Jan 2009 inauguration) despite a recession (see chart below),
and increase the federal debt by about $4.5 trillion (The debt was $10.626 trillion on the day Mr. Obama took office. Three years later it has just passed $15 trillion).
or (b) one of a series of pigmy Republican challengers who either don't accept the overwhelming scientific consensus on evolution and/or global warming (Gingrich, Perry, Cain, Ron Paul, Romney), or thinks God talks to them and told them to run (Perry), or is in favor of torture (Cain, Bachmann), or can't keep their Middle East nations straight (Cain). And none of whom has proposed a viable plan for reducing the federal debt, reducing unemployment, making America more competitive in the world market, fixing our education problems, solving our energy dependence on the Middle East, solving the entitlement problem, or any of the other major issues facing the nation.
A dismal choice!
Friday, November 18, 2011
Recommended: The Loss of American Manufacturing Jobs
The Global Economic Intersection site has an interesting post entitled The Loss of American Manufacturing Jobs: The Reasons are not just "Unfair Labor Practices Abroad". We certainly have been losing manufacturing jobs to foreign countries for years now. This chart, from the article, makes the point:
But the article also makes the point, as the title suggests, that lower wages elsewhere is not the only reason manufacturing jobs have been lost in America. It is a more nuanced vierw of the problem.
But the article also makes the point, as the title suggests, that lower wages elsewhere is not the only reason manufacturing jobs have been lost in America. It is a more nuanced vierw of the problem.
Thursday, November 17, 2011
Recommended: Obama Unbound
Victor David Hanson makes some interesting points in his Nov 14 posting Obama Unbound. In this surrealistic world of political double-think, a Constitutional lawyer (Obama) can flout the constitution and hardly cause a ripple, as in the case of military action in Libya. As Hanson says:
In other words, right-wing presidents can sometimes act left-wing, and left-wing presidents can act right-wing — to the embarrassed silence of their respective bases, but to the private delight of their greenlighting opponents.
We have no better examples of that irony than our two most recent presidents. George W. Bush was still damned as an uncaring reactionary by the Left even as he pushed for big-government programs such as No Child Left Behind and unfunded entitlements such as Medicare prescription-drug coverage. Barack Obama was alleged to be squishy about hunting down terrorists, even as he increased targeted assassinations tenfold and found plenty of opportunistic former legal critics of Bush’s national-security protocols to write justifications for them.
Does Supercommittee agreement really matter?
The Congressional "Supercommittee" is supposed to come up with at least $1.2 trillion in federal spending reduction over the next ten years by Thanksgiving or a series of automatic across-the-board cuts ("sequesters") will occur. Of course, the cuts don't come until 2013, and Congress is perfectly capable of voting not to do the cuts anyway, and probably would if it came to that. For example, there are supposed to have been automatic cuts in doctor's fees in Medicare for years now (that was a large part of the assumptions Democrats used to "prove" that Obamacare was not going to cost us any more), but each year Congress votes not to let the automatic cuts occur, so one can see how the political system works - a real "bait-and-switch".
But in typical Washington fashion, we have been hearing all sorts of alarmist reports of how bad things will be for this or that agency if the cuts occur -- unpaid soldiers and starving homeless and all the rest of the emotional tearjerkers have been rolled out. But does it really matter?
The Mercatus Center at George Mason University has put out an enlightening posting entitled Federal Spending Without & With Sequester Cuts. The relevant chart is this one:
As one can see from the chart, this is all smoke and mirrors -- even with the sequester cuts federal spending still increases, and the sequester cuts make almost no difference at all!! Considering the magnitude of our debt problem (we just reached $15 TRILLION in federal debt this week!), this whole Supercommittee exercise is just political theater, just rearranging the deck chairs on the Titanic.........
But in typical Washington fashion, we have been hearing all sorts of alarmist reports of how bad things will be for this or that agency if the cuts occur -- unpaid soldiers and starving homeless and all the rest of the emotional tearjerkers have been rolled out. But does it really matter?
The Mercatus Center at George Mason University has put out an enlightening posting entitled Federal Spending Without & With Sequester Cuts. The relevant chart is this one:
As one can see from the chart, this is all smoke and mirrors -- even with the sequester cuts federal spending still increases, and the sequester cuts make almost no difference at all!! Considering the magnitude of our debt problem (we just reached $15 TRILLION in federal debt this week!), this whole Supercommittee exercise is just political theater, just rearranging the deck chairs on the Titanic.........
Tuesday, November 15, 2011
Recommended: Europe's Crisis - Beyond Finance
George Freidman, CEO of STRATFOR, has written a fascinating piece Europe's Crisis: Beyond Finance. In it he argues that Europe's current financial crises are not just about banks and debts, but also about European elites against the general European public. He has a whole new perspective on what is going on, and it is well worth reading his piece.
And of course it makes one think of America, where in similar fashion the current ruling elites are trying to muddle through the current crisis at minimal cost to themselves, thereby maximizing the cost to everyone else.
And of course it makes one think of America, where in similar fashion the current ruling elites are trying to muddle through the current crisis at minimal cost to themselves, thereby maximizing the cost to everyone else.
Is concern justified?
I have had several friends mention to me that my posts have taken a notably pessimistic tone in the past couple of years. Whereas I have been known by some in the past as a "malignant optimist", I seem now to be perennially pessimistic. Is this really warranted, or am I just getting crotchety in my old age?
Well, all I can say in reply is that it seems to me our nation is in greater danger now than at any time in my life, including even the Cold War years when we lived under the threat of nuclear annihilation. I truly fear for the quality of life, and even the very livelihood, of my children and grandchildren over the coming decades. As I pointed out in yesterday's posts, the fiscal and unemployment issues that consume our focus these days are, in fact, fairly trivial compared to the much larger and more difficult-to-address structural issues the nation faces.
And it seems to me that neither the public at large nor our leadership, political or intellectual, are facing up to the magnitude of our problems or doing much of anything effective to even begin to explore possible responses. There are a few voices here and there, like Fareed Zakaria's CNN series "Restoring the American Dream", that are trying to raise public awareness about the looming issues, but there is remarkably little real public discussion about these problems. The right is consumed with it's ideological and religious purity and the left is locked in a failed liberal social model from the last century. If there was ever a time for a new voice, a new political philosophy, and new cultural norms adapted to today's changed world, it is now. But where are they?
It's not so much that we as a nation are in deep trouble that makes me pessimistic. It is that we as a nation seem to be largely unaware we are in such deep trouble, and unwilling to face up to the difficult choices we need to make and the difficult sacrifices that will be required and the hard work those sacrifices will entail. We as a nation seem to be prepared to continue shopping at the mall with our iPod earbuds in our ears even as the tsunami approaches! That is what really drives my pessimism.
Well, all I can say in reply is that it seems to me our nation is in greater danger now than at any time in my life, including even the Cold War years when we lived under the threat of nuclear annihilation. I truly fear for the quality of life, and even the very livelihood, of my children and grandchildren over the coming decades. As I pointed out in yesterday's posts, the fiscal and unemployment issues that consume our focus these days are, in fact, fairly trivial compared to the much larger and more difficult-to-address structural issues the nation faces.
And it seems to me that neither the public at large nor our leadership, political or intellectual, are facing up to the magnitude of our problems or doing much of anything effective to even begin to explore possible responses. There are a few voices here and there, like Fareed Zakaria's CNN series "Restoring the American Dream", that are trying to raise public awareness about the looming issues, but there is remarkably little real public discussion about these problems. The right is consumed with it's ideological and religious purity and the left is locked in a failed liberal social model from the last century. If there was ever a time for a new voice, a new political philosophy, and new cultural norms adapted to today's changed world, it is now. But where are they?
It's not so much that we as a nation are in deep trouble that makes me pessimistic. It is that we as a nation seem to be largely unaware we are in such deep trouble, and unwilling to face up to the difficult choices we need to make and the difficult sacrifices that will be required and the hard work those sacrifices will entail. We as a nation seem to be prepared to continue shopping at the mall with our iPod earbuds in our ears even as the tsunami approaches! That is what really drives my pessimism.
Recommended: Storm Clouds Ahead: Why Conflict with Public Unions Will Continue
The Manhattan Institute has put out an interesting issue paper, Storm Clouds Ahead: Why Conflict with Public Unions Will Continue. The author argues that faced with public union pension costs that have grown so large that they are crowding out everything else in the state budgets, states really have only three viable options: (1) change and restrict the union's bargaining power, (2) austerity by reducing services and laying off people, or (3) concessions (give in to the unions) and raise taxes.
Ohio citizens just overturned Ohio's attempt to try route (1), but there is no free lunch, so they will now be faced with austerity and reduced services and/or higher taxes. There just isn't any other option available. Of course neither austerity and layoffs, nor higher taxes will be popular, nor will they do anything to make Ohio more competitive in the world markets.
Public unions, of course, have every incentive to keep fighting for more for their members, even if it eventually wipes out their jobs, as has already happened in many private industries (think American steel plants, or American shipbuilding), or bankrupts their states (think California and New York). But it is suicidal in the long term, both for the union members and for the states.
Ohio citizens just overturned Ohio's attempt to try route (1), but there is no free lunch, so they will now be faced with austerity and reduced services and/or higher taxes. There just isn't any other option available. Of course neither austerity and layoffs, nor higher taxes will be popular, nor will they do anything to make Ohio more competitive in the world markets.
Public unions, of course, have every incentive to keep fighting for more for their members, even if it eventually wipes out their jobs, as has already happened in many private industries (think American steel plants, or American shipbuilding), or bankrupts their states (think California and New York). But it is suicidal in the long term, both for the union members and for the states.
Monday, November 14, 2011
More on the previous post
After writing the previous post, I ran across two pieces that bear directly on the points I made:
Walter Russell Mead, who is one the better thinkers around, wrote a piece entitled Listen Up, Boomers: The Backlash Has Begun in the Nov 13 The America Interest. He is pretty blunt. The boomers - the generation that has been running things for the past few decades (and actually the generation just after mine) - has made a royal mess of things, and now we are beginning to suffer the the consequences.
After reciting a litany of lousy choices the boomer generation made, Mead says
The second relevant piece is one of Fareed Zakaria's TV specials in his CNN series Restoring the American Dream. This one is called "Fixing Education". If you missed it when it aired on TV this week and last week, the transcript can be found here. I have been hunting around to try to find a site where one can replay the video, but haven't found one yet, but excerpts can be seen here.
Previous posts have mentioned repeatedly that US students score dismally against other developer nations, despite spending more money per pupil than all but one nation. Zakaria mentions that, as well as the terrible dropout rate from US schools, but this piece also highlights some new successful approaches that the country could adopt, if it could free itself from the straitjacket of local and national politics in education.
Walter Russell Mead, who is one the better thinkers around, wrote a piece entitled Listen Up, Boomers: The Backlash Has Begun in the Nov 13 The America Interest. He is pretty blunt. The boomers - the generation that has been running things for the past few decades (and actually the generation just after mine) - has made a royal mess of things, and now we are beginning to suffer the the consequences.
After reciting a litany of lousy choices the boomer generation made, Mead says
All of this was done by a generation that never lost its confidence that it was smarter, better educated and more idealistic than its Depression-surviving, World War-winning, segregation-ending, prosperity-building parents. We didn’t need their stinking faith, their stinking morals, or their pathetically conformist codes of moral behavior. We were better than that; after all, we grokked Jefferson Airplane, achieved nirvana on LSD and had a spiritual wealth and sensitivity that our boorish bourgeois forbears could not grasp. They might be doers, builders and achievers — but we Boomers grooved, man, we had sex in the park, we grew our hair long, and we listened to sexy musical lyrics about drugs that those pathetic old losers could not even understand.
What the Boomers as a generation missed (there were, of course and thankfully, many honorable individual exceptions) was the core set of values that every generation must discover to make a successful transition to real adulthood: maturity. Collectively the Boomers continued to follow ideals they associated with youth and individualism: fulfillment and “creativity” rather than endurance and commitment.
The second relevant piece is one of Fareed Zakaria's TV specials in his CNN series Restoring the American Dream. This one is called "Fixing Education". If you missed it when it aired on TV this week and last week, the transcript can be found here. I have been hunting around to try to find a site where one can replay the video, but haven't found one yet, but excerpts can be seen here.
Previous posts have mentioned repeatedly that US students score dismally against other developer nations, despite spending more money per pupil than all but one nation. Zakaria mentions that, as well as the terrible dropout rate from US schools, but this piece also highlights some new successful approaches that the country could adopt, if it could free itself from the straitjacket of local and national politics in education.
The real dangers
The problem with crises is that they tend to produce tunnel vision. The near-term problems tend to divert attention from the long term problems, even though the long-term problems may be far more serious and dangerous. That, I think, is what is happening here in America. The nation, and the political system, is all focused on the immediate problems of the current financial crisis, with the growing federal debt and high unemployment, and politicians have been looking for short-term solutions, like extending unemployment insurance and raising taxes.
Far more dangerous, however, are some long term structural problems in America. Yes, we have high unemployment at the moment, but the real problem is that many of those lost jobs will never come back, whatever Washington tries to do. Yes, we have too much federal debt at the moment, but the real problem is that without major readjustments America will never again have the rate of growth that can pay back those debts.
In a nutshell, America is losing manufacturing to other nations with lower wage rates, we are losing our lead in innovation to other nations with better-educated, more highly motivated engineers and scientists, we are losing new businesses to entrepreneurs on other countries with more favorable tax rates and larger skilled labor pools who are willing to work harder for lower wages.
For decades now places like Silicon Valley have been filled with bright foreign engineers, programmers, scientists, and entrepreneurs who came to America because they could do better here than in their home country. Now many are migrating back to their home countries to start their own competing companies, creating jobs back in their home countries rather than here in America..
The playing field is changing for America, and we no longer have such a clear advantage. If we don’t adapt, and quickly, we will almost certainly follow the British Empire into second-rate status over the coming decades.
This is a hard problem, and it will take a serious and extended national debate with our best minds to figure out how to adapt effectively. Certainly we need to rethink our educational system from the ground up, free it from the political constraints of teacher’s unions and the ideological constraints of local school boards, reverse the widespread trend to “dumb down” courses to make kids “feel better about themselves” and reverse the trend of colleges to put money-making ahead of academic rigor.
Certainly we need to invest heavily in our crumbling infrastructure, and in fields like basic science, which is what underlies and provides the feedstock for technological innovation.
More difficult are the cultural adjustments we need to make to wean ourselves as a nation from the comfortable indolence we have adopted over the decades when America had little real competition, and return to some of the work ethics we had as a nation in earlier, more difficult times – work ethics which our serious competition in places like India and China still have. This is not a matter of spending money – this is a matter of rethinking and readjusting our core values as a culture, and the values we teach our children in the home.
The real problem at the moment is that our national leaders are still playing petty short-term political power games with each other to see who can promise more to the voters, when what we really need is an all-out, all-hands-on-deck, wartime crisis sort of unified national attack on these long term structural problems.
Far more dangerous, however, are some long term structural problems in America. Yes, we have high unemployment at the moment, but the real problem is that many of those lost jobs will never come back, whatever Washington tries to do. Yes, we have too much federal debt at the moment, but the real problem is that without major readjustments America will never again have the rate of growth that can pay back those debts.
In a nutshell, America is losing manufacturing to other nations with lower wage rates, we are losing our lead in innovation to other nations with better-educated, more highly motivated engineers and scientists, we are losing new businesses to entrepreneurs on other countries with more favorable tax rates and larger skilled labor pools who are willing to work harder for lower wages.
For decades now places like Silicon Valley have been filled with bright foreign engineers, programmers, scientists, and entrepreneurs who came to America because they could do better here than in their home country. Now many are migrating back to their home countries to start their own competing companies, creating jobs back in their home countries rather than here in America..
The playing field is changing for America, and we no longer have such a clear advantage. If we don’t adapt, and quickly, we will almost certainly follow the British Empire into second-rate status over the coming decades.
This is a hard problem, and it will take a serious and extended national debate with our best minds to figure out how to adapt effectively. Certainly we need to rethink our educational system from the ground up, free it from the political constraints of teacher’s unions and the ideological constraints of local school boards, reverse the widespread trend to “dumb down” courses to make kids “feel better about themselves” and reverse the trend of colleges to put money-making ahead of academic rigor.
Certainly we need to invest heavily in our crumbling infrastructure, and in fields like basic science, which is what underlies and provides the feedstock for technological innovation.
More difficult are the cultural adjustments we need to make to wean ourselves as a nation from the comfortable indolence we have adopted over the decades when America had little real competition, and return to some of the work ethics we had as a nation in earlier, more difficult times – work ethics which our serious competition in places like India and China still have. This is not a matter of spending money – this is a matter of rethinking and readjusting our core values as a culture, and the values we teach our children in the home.
The real problem at the moment is that our national leaders are still playing petty short-term political power games with each other to see who can promise more to the voters, when what we really need is an all-out, all-hands-on-deck, wartime crisis sort of unified national attack on these long term structural problems.
Saturday, November 12, 2011
The Supercommittee's "Savings"
Unbelievable! The so-called "Supercommittee" is supposed to find at least $1.2 trillion in savings over the next ten years by Thanksgiving. Of course, this is a ridiculously low target. The government currently has to borrow almost $1.5 trillion EACH YEAR, so cutting $1.2 trillion out of the budget over the next 10 years is a pittance -- less than 10% of what would be required just to keep us from going further into debt.
But, according to TheHill.com, Democrats on the committee are now proposing to use the "savings" from not being in Iraq any more to fund a new stimulus plan. In other words, they are proposing to use money we weren't going to spend anyway to actually INCREASE government spending! Unbelievable! The very committee that is supposed to find at least token budget cuts is now trying to spend more!
How much longer will we the taxpayers let these jokers in Washington, Republican and Democrat alike, play these stupid political games in the face of a real and extremely dangerous national crisis? How much longer before it will spark an "American spring" in the streets?
But, according to TheHill.com, Democrats on the committee are now proposing to use the "savings" from not being in Iraq any more to fund a new stimulus plan. In other words, they are proposing to use money we weren't going to spend anyway to actually INCREASE government spending! Unbelievable! The very committee that is supposed to find at least token budget cuts is now trying to spend more!
How much longer will we the taxpayers let these jokers in Washington, Republican and Democrat alike, play these stupid political games in the face of a real and extremely dangerous national crisis? How much longer before it will spark an "American spring" in the streets?
Thursday, November 10, 2011
Whose is the election to lose?
A month or so ago I said that President Obama was so vulnerable that the election was the Republican’s to lose – though they might just be stupid enough to nominate such a far right candidate that they would lose it anyway.
Today I would say the election is President Obama’s to lose. Not that he looks any better on his record or in the polls than he did a month or so ago, but the Republicans seem bent on self-destruction and may hand the election to him.
The announcement that a group of influential conservatives have launched a campaign to deny Mitt Romney the nomination because he isn’t conservative enough is the final straw. Apparently the Republicans aren’t willing to consider anyone who isn’t ideologically “pure”, meaning that they are against abortion, don’t believe in either global warming or evolution, and are stuck in the fantasy that cutting taxes will solve all our fiscal problems. It now looks like the Republicans are going to do Obama’s work for him, and destroy any potentially electable nominee (meaning moderate enough to get significant independent votes) before they even reach the general election.
Well, if they are that ideologically rigid, that politically naïve, and that out of touch with reality, I guess I don’t want them in control of the government anyway. Not that I relish another four years of liberal denial and spending either.
Today I would say the election is President Obama’s to lose. Not that he looks any better on his record or in the polls than he did a month or so ago, but the Republicans seem bent on self-destruction and may hand the election to him.
The announcement that a group of influential conservatives have launched a campaign to deny Mitt Romney the nomination because he isn’t conservative enough is the final straw. Apparently the Republicans aren’t willing to consider anyone who isn’t ideologically “pure”, meaning that they are against abortion, don’t believe in either global warming or evolution, and are stuck in the fantasy that cutting taxes will solve all our fiscal problems. It now looks like the Republicans are going to do Obama’s work for him, and destroy any potentially electable nominee (meaning moderate enough to get significant independent votes) before they even reach the general election.
Well, if they are that ideologically rigid, that politically naïve, and that out of touch with reality, I guess I don’t want them in control of the government anyway. Not that I relish another four years of liberal denial and spending either.
The Emperor’s clothes
It has always seemed interesting to me that the world accepts paper money, even though it is no longer backed by anything of value. Once, of course, a paper bank note could be exchanged at any time for an equivalent value in silver or gold, so the paper money was really just a promissory note. But most nations have abandoned that practice by now, and so the whole system now runs on faith. That works as long as everyone agrees to pretend that the paper notes (or now, their electronic equivalents) really have value, and in fact the system has worked well for decades now in that manner – though it does encourage governments to “cheat” by just printing more banknotes to cover their debts (the euphemism for this is “quantitative easing”, and the US just did that).
This comes to mind this morning as I think about the world financial crisis – or more accurately, the debt crisis. Europe is teetering along, having bailed out Ireland, and Portugal, and now Greece (for the second time), but in fact the measures taken thus far are clearly too little. Even with a 50% “haircut” on Greek bonds, the Greek debt is still about 120% of GDP, far more than the nation can ever pay off with its current economy. And now Italy is looking shaky as well. Greece, Portugal and Ireland were relatively small nations, but the Italian economy is simply too large to bail out.
So in fact a large number of European banks (and probably a few big US banks as well) are actually insolvent, since they hold bonds from various EU nations that will never be paid back in full, if at all. No one wants to admit this out loud, because it would cause the banks to immediately fail, and precipitate a major banking crisis around the world. But it is true nonetheless.
And we are playing the same game here in the US. The Federal government currently has financial obligations that far exceed any revenue it could ever possibly collect. I’m not just talking about the $14 trillion in national debt – I’m also talking about the estimated $70-100 trillion in future obligations for federal pensions, Medicare and Medicaid, and Social Security. Not to mention the estimated $5 trillion that Fannie Mae and Freddie Mac are short from bad mortgages. Not to mention the estimated $3 trillion in unfunded pension liabilities at the state and local level. (Notice we are in trillions here -- billions are small change in this conversation!)
So far American politicians have been pretending that the Emperor still has clothes. They have been pretending that minor adjustment here and there (cut $1.5 trillion over 10 years from the federal budget, tax millionaires, etc) will solve the problem. And so far the financial world has agreed to this fiction, because to admit out loud how bad things really are would precipitate a crisis.
In fact, it is not unreasonable to pretend things are OK for a while to buy time to fix the real problem. That would be quite a reasonable strategy. Unfortunately that is not what is happening, either in Europe or in the US. Nothing effective at all is being done to address the underlying problem – all the effort is on “patching things up” month by month to maintain the fiction and avert the crisis.
At some point, no doubt, the world will realize that the Emperor has no clothes, and then things could get very bad indeed.
This comes to mind this morning as I think about the world financial crisis – or more accurately, the debt crisis. Europe is teetering along, having bailed out Ireland, and Portugal, and now Greece (for the second time), but in fact the measures taken thus far are clearly too little. Even with a 50% “haircut” on Greek bonds, the Greek debt is still about 120% of GDP, far more than the nation can ever pay off with its current economy. And now Italy is looking shaky as well. Greece, Portugal and Ireland were relatively small nations, but the Italian economy is simply too large to bail out.
So in fact a large number of European banks (and probably a few big US banks as well) are actually insolvent, since they hold bonds from various EU nations that will never be paid back in full, if at all. No one wants to admit this out loud, because it would cause the banks to immediately fail, and precipitate a major banking crisis around the world. But it is true nonetheless.
And we are playing the same game here in the US. The Federal government currently has financial obligations that far exceed any revenue it could ever possibly collect. I’m not just talking about the $14 trillion in national debt – I’m also talking about the estimated $70-100 trillion in future obligations for federal pensions, Medicare and Medicaid, and Social Security. Not to mention the estimated $5 trillion that Fannie Mae and Freddie Mac are short from bad mortgages. Not to mention the estimated $3 trillion in unfunded pension liabilities at the state and local level. (Notice we are in trillions here -- billions are small change in this conversation!)
So far American politicians have been pretending that the Emperor still has clothes. They have been pretending that minor adjustment here and there (cut $1.5 trillion over 10 years from the federal budget, tax millionaires, etc) will solve the problem. And so far the financial world has agreed to this fiction, because to admit out loud how bad things really are would precipitate a crisis.
In fact, it is not unreasonable to pretend things are OK for a while to buy time to fix the real problem. That would be quite a reasonable strategy. Unfortunately that is not what is happening, either in Europe or in the US. Nothing effective at all is being done to address the underlying problem – all the effort is on “patching things up” month by month to maintain the fiction and avert the crisis.
At some point, no doubt, the world will realize that the Emperor has no clothes, and then things could get very bad indeed.
Wednesday, November 9, 2011
Pew poll references
I tracked down the original Pew Research Center studies referred to in the previous post.
For the May 2009 public perception of evolution and climate change, a summary can be found at http://www.people-press.org/2009/07/09/section-5-evolution-climate-change-and-other-issues/. That summary has links to the complete report and to the questionnaire.
An additional fact I found interesting is that public perception of whether there is a consensus among scientists on these issues is at variance with reality. The relevant section of the report reads:
For the May 2009 public perception of evolution and climate change, a summary can be found at http://www.people-press.org/2009/07/09/section-5-evolution-climate-change-and-other-issues/. That summary has links to the complete report and to the questionnaire.
An additional fact I found interesting is that public perception of whether there is a consensus among scientists on these issues is at variance with reality. The relevant section of the report reads:
Despite the overwhelming agreement among scientists about evolution and climate change, substantial minorities of Americans think there is no scientific consensus on these issues. While a 60% majority of the public says that scientists generally agree that humans have evolved over time, nearly three-in-ten (28%) say that scientists do not generally agree.The US religious knowledge report was issued in September, 2010, and a summary can be found at http://pewforum.org/Other-Beliefs-and-Practices/U-S-Religious-Knowledge-Survey.aspx. The section specifically devoted to what people know about the Bible can be found at http://pewforum.org/U-S-Religious-Knowledge-Survey-Who-Knows-What-About-Religion.aspx.
A comparable majority (56%) says that scientists generally agree that the earth is warming because of human activity. However, more than a third (35%) says that scientists do not generally agree.
In both cases, people’s perceptions of a scientific consensus are strongly correlated with their own views on the issue. Fully 79% of those who say life has evolved due to natural selection say there is a scientific consensus on this issue. Fewer than half (43%) of those who say life was created in its current form see such a consensus.
This pattern is even more pronounced when it comes to views about whether there is a scientific consensus over climate change. About three-quarters of people (76%) who say human activity is driving global warming think that most scientists agree on this point. Fewer than half (41%) of those who say warming is mostly due to atmospheric changes think there is a scientific consensus on the issue. Among the small share of the public (11%) that says there is no solid evidence of global warming, just 22% say there is scientific agreement that human activity is causing global warming, while 68% think there is no agreement among scientists on the issue.
Tuesday, November 8, 2011
Recommended: The Age of American Unreason
Susan Jacoby, who also authored Freethinkers: A History of American Secularism (2004) examines the cultural history of the past 40 or so years that has led America to its current anti-intellectualism, in which even supposedly well-educated politicians don't believe in evolution and climate change, despite an overwhelming scientific consensus worldwide on these issues. Recent Pew polls show an astounding level of ignorance about science among Americans (one in five still believe the sun revolves around the earth!!), and an almost complete lack of knowledge about history.
Some of this anti--intellectualism is driven by the fundamentalist religious right, but even in their own chosen area of expertise, the Bible, this group is amazingly ignorant. According to the Pew survey about half think the Golden Rule is one of the ten commandments, and only 45% can name the four Gospels.
This is a disturbing book to read -- one fears for the future of the nation. But it is important, nevertheless, to understand the roots of this problem, and the effect it is having on our children.
Some of this anti--intellectualism is driven by the fundamentalist religious right, but even in their own chosen area of expertise, the Bible, this group is amazingly ignorant. According to the Pew survey about half think the Golden Rule is one of the ten commandments, and only 45% can name the four Gospels.
This is a disturbing book to read -- one fears for the future of the nation. But it is important, nevertheless, to understand the roots of this problem, and the effect it is having on our children.
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