Some days the news is just weird....

Some days the news is just weird - Alice-in-Wonderland weird. Today, for example:

North Korea, who from the assembled evidence (including fragments of the torpedo with North Korean markings on it) apparently fired a homing torpedo at the South Korean warship that blew up and sank in late March, has threatened all-out war if South Korea retaliates in any way. It's the same threat they made in 1987 after they shot down a South Korean airliner, killing all 115 people on board. Perhaps we will retaliate by once again providing them food and fuel - a tactic that has worked so well in the past.

The Senate, that staunch defender of the people's rights, just overwhelmingly passed an amendment to the banking bill that would largely prevent states from writing new laws to protect consumers from questionable financial products even if no federal law exists. It also blocked a proposal to ban banks from making the kind of proprietary trades in high-risk securities that helped fuel the financial crisis. (so what, exactly, IS being reformed in this bank reform bill?)

The UK has discovered that it can't deport two suspected al Qaida operatives, Abid Naseer and Ahmad Faraz Khan, to Pakistan, where they come from. This is because Article 3 of the European Convention on Human Rights states that "No one shall be subjected to torture or to inhuman or degrading treatment or punishment". The fact that no one thinks these people will be tortured in Pakistan (in fact they will probably be welcomed as heroes) doesn't matter. EU rules prohibit the UK from deporting them.

Some days ........

Recommended: In Afghanistan, It's About Honor

David Ignatius has an interesting piece in the May 16 Washington Post, In Afghanistan, It's About Honor. America keeps making serious mistakes because we don't understand other cultures, so his observations about how tribal fighting typically stops in Afghanistan, about the cultural expectations, are highly relevant.

Recommended: Galbraith: The danger posed by the deficit ‘is zero’

I have railed often enough about the dangers of the massive deficit that the government is accumulating, and in fact a good many others have done the same lately. But Ezra Klein has a piece in today's Washington Post worth reading. It is an interview with the University of Texas economist James Galbraith, who has an entirely different perspective on the problem. You can read it here.

I don't know that I find Galbraith's argument persuasive on first reading, but it is another point of view, and deserves careful attention if only because we humans are always susceptible to "groupthink", a widespread belief in an idea that is plausible, but wrong!

Spin vs Reality

The administration, for perfectly understandable political reasons, has been making much of any glimmer of good news (or not-bad news) that comes along. The 290,000 new jobs created in April are an example. One would think, from the administration’s PR campaign, that the recession was over.

REALITY: “Official” unemployment rose again last Friday from 9.7% to 9.9%. That is the “official” number. The actual number is much higher, around 17.4% if one counts people who are underemployed (the 9.2 million who would like to work more hours than they now have) and the 2.4 million who have just plain given up looking for work.

REALITY: Since World War II, the average recession has lasted 10 months, and the longest has been 16 months. Yet, 28 months after the last recession began, unemployment is still 10% and rising.

REALITY: Historically, deep recessions have typically had strong recoveries. The Bureau of Economic Analysis reports that economic growth in the first 3 quarters after the 1981-1982 recession was 5.1%, 9.3% and 8.5%. Yet, economic growth in the first 3 quarters after this last recession was 2.2%, 5.6% and 3.2%, not even half as much.

One can only conclude that the happy face the administration is putting on is pure spin – they are surely smart enough to understand that things aren’t really all that rosy, and that their attempts at economic stimulus haven’t really made much difference in the long-term problem – in fact the massive debt load that stimulus imposed may have made things worse in the long run.

Recommended: The Case for Economic Doom and Gloom

I'm not by nature a pessimist. In fact I once had a colleague describe me as a "malignant optimist" - and I took that as a compliment. Still, we face extraordinary economic and political difficulties, and it is hard not to take them seriously.

In that regard, I recommend John Juris' article in The New Republic this month: The Case for Economic Doom and Gloom. Juris discusses the work of UCLA economic historian Robert Brenner, who in the introduction to a book he wrote makes the case that we are far from out of trouble yet.

In essence, Brenner argues that our real difficulties lie not in the short-term problems in the financial sector, but in a global, long-term problem of global overcapacity. The world simply has more manufacturing capacity than the world's consumers can absorb, so there simply isn't the option any more for any nation to "grow out" of its economic problems by increasing exports.

I have simplified the argument, and the whole article is well worth reading and thinking about. If his argument is accurate, then the current economic stimulus approaches the politicians seem to favor so much is just (taxpayer) money down the drain in the long run.

Recommended: The Limits of Policy

Once again, David Brooks has written a profound piece in his May 3 New York Times article The Limits of Policy.

As he notes, bad policy can make things much worse, but good policy can only do so much. What happens in the world is much more affected by culture and relationships than it ever is by government policy. I like his concluding paragraph:

Finally, we should all probably calm down about politics. Most of the proposals we argue about so ferociously will have only marginal effects on how we live, especially compared with the ethnic, regional and social differences that we so studiously ignore.

Whose carbon footprint?

Al Gore, April 24, 2009 testimony to Congress:

"Every penny that I have made, I have put right into a non-profit deal, Alliance For Climate Protection, to spread awareness of why we have to take on this challenge. And Congresswomen, if your, if, if you believe that the reason I have been working on this issue for 30 years is because of greed, you do not know me."

Nice words, but Al Gore just paid $8,875,000 on a gated ocean-view villa in Montecito, California, sited on 1 1/2 acres with a swimming pool, spa and fountains. You can see pictures here. The Italian-style house has high ceilings with beams in the public rooms, a family room, a wine cellar, terraces, six fireplaces, five bedrooms and nine bathrooms in more than 6,500 square feet of living space. Of course he also still has his 10,000-square-foot, 20 room, 8 bathroom mansion in Belle Meade, Tennessee, and his home in Virginia as well.

So much for the man who is asking us all to reduce our carbon footprint.......