Parts to Wholes: the Socionomic Systems Nexus

There's such a tidal wave of interesting stories this week that we're going to have to split things up into smaller buckets or ignore some of it. So we're going to start with the general international news excerpts and move on from there.

A point we've made before but it deserves re-iteration (re-it, and re-it, until people start adjusting). We're are in the earliest stages of the biggest structural shift in world affairs since the early 1800s, when China and India were the major world economies and had a healtheir and more prosperous socio-economic systems than any others. The West didn't eclipse them until ~ 1850's, particularly when you measure it by per capita income and indicators of social-economic health like caloric intake. We are headed back to that world and will spend the next 3-4 decades going there. So far in the process just over the last 20 years more people have made more progress in income and well-being than at any previous time in history. But these trends and opportunities carry risks and expose fault lines. Germany's rise in the late 1800's laid the groundwork for WW1 while Japan's in the '20s and '30s was a major contributor to WW2. As we move forward on these paths it is inescapable BUT it will also STRAIN the world system and put enormous pressure on world resources. Failing to pass thru these bottlenecks will break the still emergent system and cause a major collapse.

So the choice is Heaven or Hell it seems - for example as Jared Diamond shows in Collapse China faces enormous environmental problems and most of the last two decades of African problems can be traced to socio-political failures brought on by population growth exceeding the carrying capacities of the local ecologies/economies. Paying attention to these issues might be a worthwhile thing - because even if you won't face them personally, trust me, you friends and relatives will. And there's no going back.

GENERAL READINGS

A Rising in the East By the year 2030, 361 million Chinese -- more than the entire current population of the U.S. -- will meet the World Bank's classification for middle class: the people who "buy cars, engage in international tourism, demand world-class products, and require international standards for higher education." China may be, in this sense, a bellwether. Analysts at CLSA Asia Pacific Markets estimate that, by 2010, 50% of Southeast Asia's population will live in the region's cities, many having moved there only recently in search of better jobs and better lives. According to Nielsen Co.'s most recent global survey of consumer confidence, the Asia Pacific region generally is the most optimistic in the world. India in particular, after Norway, is home to the world's most upbeat consumers. Such hopefulness tells us something new. Westerners are well aware that China and India -- not to mention Singapore, Taiwan, Hong Kong and South Korea, the so-called Asian Tigers -- have undergone a process of modernization, raising their standards of living by exploiting, to varying degrees, the dynamics of a modern capitalist economy. But there has been a shift, too, in the way that the people of Asia view themselves and their future. Such a shift, Kishore Mahbubani argues in "The New Asian Hemisphere," will have profound effects on Asia's approach to the rest of the world and, just as important, on the world's approach to Asia.

Mr. Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore and a former senior diplomat, attributes the region's economic growth to a kind of free-market domino effect that began in the 1860s, when Japan began to adopt the economic practices of a modern industrial society. Over time, he says, the "seven pillars of Western wisdom" -- free-market economics, meritocracy, pragmatism, a culture of peace, the rule of law, an emphasis on education, and a willingness to pursue advances in science and technology -- have helped to give many Asian countries a new (and newly competitive) structure. But old habits die hard. Singapore, for instance, may be among the world's least corrupt countries, but its neighbors cannot even begin to make such a claim. Many Asian elites, Mr. Mahbubani concedes, wish to preserve traditional systems of privilege and legal inequality, but they know that "it is impossible to build a modern society and a modern economy without a modern rule of law. This is the pill that all Asians will have to swallow, bitter though it may be in the early years of application."

Military, industrial and complex The authors of this history of world trade during the past 1,000 years say they wrote it for their own benefit. Power and Plenty is a wide-ranging survey, both of the facts and of the literature, not an essay organised around a single thesis. Simple trade models have their limits, they say. “The summit of unpleasantness attainable in such models is the use of tariffs, quotas and other trade-policy instruments . . . If only life were like this . . . The greatest expansions of world trade have tended to come not from the bloodless tâtonnement of some fictional Walrasian auctioneer but from the barrel of a Maxim gun, the edge of a scimitar, or the ferocity of nomadic horsemen.” This observation underlines the best and most unusual thing about Power and Plenty: it does justice to both ideas in its title. The history of trade is a constant interaction of force and commerce. You cannot understand one without the other, the authors contend, and by the end of the book you are sure they are right. In their story the great economic turning points of the past millennium were: the Black Death, itself a consequence of Genghis Khan and his Pax Mongolica; the discovery and integration of the Americas; and the industrial revolution. In each case, conflict, violence and geopolitics were to the fore. And each of these transforming events helped create the conditions for the next. The book lays out the connections, politely (for the most part) discusses rival opinions and says clearly why the authors take the view they do. Consider the industrial revolution. It started in the north of England in the late 18th century, but from the beginning was also a global process of political and military interaction. Trade among Europe, Africa and the New World played a key role: exports of raw cotton from the Americas, exports of cotton manufactures from England, and exports of slaves from Africa. To ask why the industrial revolution happened when and where it did – long a subject of bitter academic controversy – is to ask about the precursors of this triangular interaction.

Europe and Adjustment Breakdowns

France Admits Obama Only Good to Football as Politics Preclude Immigrants The rise of Illinois Senator Obama, 46, to front-runner for the U.S. Democratic presidential nomination is holding a mirror to France as its citizens prepare to vote next month for mayors in its 36,781 municipalities. While Europe's third-largest economy has the region's biggest population of Sub-Saharan and North African immigrants and their descendents, it doesn't have any black or Arab mayors currently in office, says Adil Jazouli, a sociologist and adviser to a government committee on urban affairs. There also aren't any deputies in the National Assembly from France's first-or second-generation immigrant population, he adds.

On death and dying THE reaction of Germany's political class to the demise of their four-party system is reminiscent of Elisabeth Kübler-Ross's “five stages of grief”. First came “denial”. In 2005 the Left Party won enough seats in Germany's parliament to stymie the two usual coalition options: a right-of-centre one between the Christian Democrats (CDU) and the liberal Free Democrats (FDP), or a left-leaning pairing of the Social Democrats (SPD) with either the FDP or the Greens. Instead, the CDU and SPD were forced into a “grand coalition”, from which each fervently hopes to escape after next year's federal election. Now comes “bargaining”.

china, Russia and  Adjustment

Policy challenges mount for China But making investment bets on the stated policy of the People's Bank of China requires much more than just a leap of faith. After being told to expect lending curbs as bank reserve ratios were hiked to 15%, instead loans grew at blistering 16.7% year-on-year in January, up from December's 16.1%. Put another way, China's commercial banks lent 803 billion yuan or two thirds of their lending quota for the first quarter in January.

This has left investors and analysts scrambling for answers. Has the tightening policy been ignored, abandoned or is plain not working? Have we gotten to the stage where policy by dictate is now a blunted instrument as China's newly commercialized banks chase profit? Official word remains that there has been no policy shift and there is likely to have been some front loading of loans, but more answers are needed. The NPC meeting in March is expected to provide some more policy detail.  In the meantime, the fiscal, trade and lending policy challenges facing China's leaders are piling up whither growth, inflation, exchange rate? On the one hand, Beijing is facing renewed calls to relax spending and trade policies. The construction, transport and agricultural sectors hit by the recent monster snow storm that caused $15.4 billion in damage need emergency funding. Meanwhile exporters are feeling the pain of a weaker U.S. market and rapidly appreciating yuan squeezing margins even though China racked up another strong trade surplus in January. On the front page of the South China Morning Post over the weekend was a story of factories fleeing the Pearl River Delta as new labor contract laws added to existing financial strains. One estimate said 10,000 processing factories could leave this year. Meanwhile, the gorilla in the room for Beijing is still inflation. This week, January inflation data will be released and is expected to top 7%.

• China, U.S. agree to step up constructive, cooperative relations
• CPC session ends, vows to deepen political reform
• Chinese President Hu urges reform, innovation in Party building, China to start new round of gov't institutional reform

Why Putin’s rule threaten’s Russia and the west At least he made the trains run on time. That was said of Benito Mussolini, Italy’s fascist dictator from 1922 to 1943. Much the same is now said of Vladimir Putin, Russia’s authoritarian president. He may have crushed the fragile shoots of democracy, but he has at least restored the economy, the state and his country’s place in the world. This view is shared by Mr Putin himself. True, between 1999, the year before Mr Putin became president, and 2007, the Russian economy expanded by 69 per cent. But the economies of 11 of the 15 former republics of the Soviet Union expanded by more than Russia’s. Indeed, only Kyrgyzstan did markedly worse. A number of the former Soviet republics did, it is true, benefit from an oil and gas bonanza. But so, too, did Russia: its oil and gas exports jumped from $76bn in 1999 to $350bn last year. Even so, the Russian economy expanded by less than Ukraine’s. Like all post-communist countries, Russia’s economy suffered a steep initial decline, which reached its trough in 1998. Countries that reformed more decisively, such as Poland, bottomed out more quickly and are now far ahead. Again, Russia’s recovery is in no way exceptional: tiny Estonia has done far better. Maybe this is why the Kremlin hates the Baltic state so much. It is simply wrong to assign credit for the upswing to Mr Putin. Not only did it begin with the devaluation of 1998, but nearly all the reforms that underlay the improvement were initiated, if not brought to fruition, under Boris Yeltsin’s despised rule. Under Mr Putin little progress has been made on structural reforms.

Smoke and mirrors Even Mr Putin's critics are impressed by Russia's transformation in the past few years. A country that almost went bust ten years ago now boasts a $1.3 trillion economy, foreign-currency reserves of nearly $480 billion and a $144 billion stabilisation fund for surplus oil and gas revenue. Annual growth of real incomes has been in double digits. GDP per head has risen from less than $2,000 in 1998 to $9,000 today at current rates of exchange. Yet the truth is that Russia's economy began its rebound 18 months before he became president. Behind it lie three factors: a revival of private initiative, oil prices that have risen fourfold during his presidency and macroeconomic stability. Only the third can be credited to Mr Putin. The economy is now more dependent on oil than ever. And the outlook is bleaker: a slowing world economy means that oil prices may not rise further, and could even fall. Where did it go wrong? Mr Illarionov, who quit his post in 2005, argues that the breaking point was the attack on Yukos that began in mid-2003. The significance of the Yukos affair went beyond the destruction of Russia's largest oil company and the imprisonment of its boss, Mikhail Khodorkovsky. It dictated the country's entire economic and political course. The attack on Mr Khodorkovsky was presented as a crackdown on the oligarchs. Yet it created a new, more powerful and less visible caste that began to play a dominant role in the economy. The share of crude-oil production controlled by state and semi-state companies doubled. Growth in oil output, which before the Yukos affair had been running at about 9% a year, slowed to just 1% by the end of 2007. Worse, the destruction of Yukos negated any efforts to strengthen the rule of law.

INFORMATION WARFARE: The Curtain Falls in Russia For a period, during the 1990s, the Russian media, freed from decades of communist control, was an excellent source of military news from Russia. Too excellent for many Russian political and military leaders, who wanted to institute some "control". The war in Chechnya was not going well back then, and it was painful to see accurate news coming out of the Caucasus. So when former secret police boss Vladimir Putin got elected president of Russia in 2000, he began to return the mass media to government control. Not exactly back to the old communist days, but back to a form of state control. The new censors had to be careful, not just because most Russians would not tolerate a return to the sterile, lying and annoying news media of the communist days, but because Putin was not able to shut down Russian access to Internet news, an alternative news source that the communists never had to deal with. The solution has been to make Russian media more like Western media, a process that was already underway in the 1990s. But the new state controlled media was selective in what it adopted from the West. They put as much, well produced, happy news as they can get away with, and keep that accurate, and enough tragic stuff (if it bleeds it leads), to hold the audience. But lighten up on anything that makes the government look really bad, and beef up any good news on the government, as much as you can get away with. News directors of the "New Russian Media" lose points, and eventually their jobs, if they get shown up too often on the Internet.

Google, Gates, Indian Diaspora Bet on Children: Decades later, illiteracy and poverty are still feeding off each other in India, only the scale of the problem is now much larger. Many of the 60 million children in India who are currently of school-going age will struggle to escape a blighted future without timely help. The list of efforts needed to enroll children in schools and keep them there may be long and complex. However, at 30 U.S. cents per child per year, the basic math, reading and writing skills required to help young learners retain their interest in education and keep them from dropping out of school are ridiculously cheap. It's also critical enough to have caught the attention not just of wealthy Indian communities overseas but also of the Menlo Park, California-based William and Flora Hewlett Foundation and the Bill & Melinda Gates Foundation. Unlike in the past, there's no dearth of economic opportunities for educated Indians. The Federation of Indian Chambers of Commerce and Industry conducted a survey last year of skills shortages in various industries. In the fast-growing economy, white-collar career openings -- from software code-writers and doctors to wealth managers -- will also abound. But will there be enough hands and minds ready to grab the jobs on offer? Will there be prospects for social and economic mobility, where the initial wealth or caste of the parents will cease to be a determinant of someone's life earnings? The answers to those questions may depend on the quality of school education, currently a big obstacle to progress.

SPACE: Scary Americans Russia and China are urging the UN to outlaw the development or testing of systems that can destroy space satellites. This comes only a year after China tested a satellite destruction system. They used a KillSat (Killer Satellite) that destroyed an old Chinese weather satellite, about 850 kilometers up on  January 11th, 2007. That's at the upper range of where most reconnaissance satellites hang out. The impetus for this new enthusiasm over satellite destruction was the February 22^nd, 2008 destruction of a broken U.S. spy satellite by a U.S. warship, firing an anti-aircraft missile modified to intercept ballistic missiles and, to the surprise of China and Russia, satellites in a low earth orbit (160-2,000 kilometers up) [VIDEO].  The U.S. cruiser used its Aegis radar to locate the satellite, some 220 kilometers above, then fired a single SM-3 missile [PHOTOS] to destroy the SUV sized satellite. Throughout the Cold War, Russia and China always worried about new American military technology. A lot of these nasty surprises were not even American (like composite armor, which is a British development). But U.S. surprises like smart bombs, stealth aircraft and truly bullet proof body armor kept the fear alive. Now, there's this anti-missile system that doubles as a destroyer of low flying satellites. Lots of spy satellites have low orbits. The Satellite Shootdown: Behind the Scenes

Posted by dblwyo at 05:02 PM | Permalink | Comments (0)

Well as we used to say out west, generally around branding time, we're getting down to the nxx-cutting. In the last few weeks we've sorted the candidates down and out, Obama in particular has made a spectacular race of it and now appears to be pulling ahead of Clinton a bit. Tonight's debate...well what do you think ? In that format which favors hard-bitten sound bites it's hard to dig a little deeper into the issues.

At this point personalities and character are still and will be vital and important but we thought it was time to move on to the other side of the house. So to set the stage for our serious inquiries let us turn to the Onion News Network and their in-depth analysis of the most important and critical issues facing us to day.

VIDEO WATCHING PAUSE

Now let us assume that you took advantage of that little break and actually watched the video. Kinda funny ? Kinda insulting ? Both ? Neither ? We confess we laughed because if you can't poke fun at yourself you've lost all perspective. You say ourselves - well yeah. That video may have been about the elections and candidates and there sure is a lot of BS that always flies around in politics but then again it's our BS - it wouldn't be flying if we didn't want to hear it would it !

Plus it is hard to dig into the issues and try and decide where you stand. For one thing it takes a lot of time and effort and for another it's darn damm well expensive to build up some expertise and/or find somebody you trust. In the meantime we're just surrounded by a wild cacophony of soundbites designed to catch your attention but not necessarily inform you. For example there's this thing running around about McCain saying we should stay in Iraq for a 100 years. Well he did, being flip, but then went on to explain we shouldn't just cut and run. That would waste all the sacrifices we've made, destabilize Iraq and likely lead to major instability and possibly collapse in the ME with resultant major catastrophes for the world economy. Focusing on 1 sec. of flip answer instead of at least putting it in the context of another min or so is pure BS IMHO. You get what you deserve at the end of the day.

On the other hand both of the Dimowhackic, as distinguished in our nomenclaure from Democratic, candidates were outdoing each other to claim the faster and more precipitous withdrawl plan. Well if I believed they'd just cut and run and I believed that the consequences would be as outlined it'd be hard to support them. But is that really their positions - are they that fundamentally irresponsible and ideological ? There you don't have to take anything out of context because they've gone on and on. Yet behind the scenes their staffs area apparantly making serious efforts to find a phased, sensible withdrawl plan based on doing what's best for the Iraqis, the world and the US. Meanwhile they're pandering to their baseness, ooooops, I mean base. You get what you deserve.

So in the spirit of being a little more serious and deserving something a little better let's start exploring policy issues.

Let's start by using some interesting online tools to poke around at things.In some ways a good place to start is with what policies you do support. There are what ? A 100 major policy issues or talking points - just getting them sorted, organized, categorized and so forth is a core. Trying to analyze them another bigger one. And trying to see how they all fit together worse yet.

The Political Compass

The WSJ bless its pointy little head put up a very nice tool that maps your reactions to key questions to candidates. While most of these folks have move on it's still a fascinating inventory and structured way of looking at things. Here's our final response but if you click on thru you should be able to get the original test and take it for yourself, see where you stand over a whole reach and range of issues and compare your positions to the various candidates. There a couple of key things we think you should notice.

Other than collecting a thousand little policy points of confusion we often sort them into Left vs Right. Those are reasonable distinctions. They ask the basic question - where do you want to go ? But intent is no substitute for putting on foot in front of the other - that is how do you want to get where you're going ? Specifically what means, tools, and resources are you going to put into things. In politics and policy that gets to the MOST NEGLECTED PROBLEM - what implementattion mechanism are you going to choose. Here they start to capture that challenge by contrasting "Progressive/Liberal" vs "Traditional/Conservative" choices.

You'll notice that not only did we end up on the middle of the choice spectrum, thereby distancing ourselves from both clusters of candidates. We also ended up on the middle (roughly) of the mechanism spectrum. Our position, which we'll explore more in the future, it that government is vital and necessary for some things but private initiatives are provably better for others. For example we're pretty clear that national defense should be publically provided as well as local police protection. But what about Healthcare - it's one thing to talk abovt covering everybody but how are you going to do that ? Pay for it, manage it and make sure that the coverage gets us the most bang for what'll be beaucoup bucket of bucks. 

PREVIOUS POSTS

After (before ?) you take the policy quiz you might want to compare your position and results against a couple of prior posts where we analyzed the political spectrum and introduced the beginnings of a simple way of thinking about the issues:

 Political Spectrum and Candidates

 Choices, Options & Evaluations 

 Evaluating the Candidates 

Posted by dblwyo at 03:56 AM | Permalink | Comments (0)

In the previous post collecting last week's interesting stories there was an excerpt on the split in Hollywood over what constitutes a good movie. This is MUCH more than just an aesthetic question because movies help shape our outlook on life. Throughout human history it has been our shamans, bards and poets who have helped us learn about ourselves, feedback our actions and helped us learn what we know about the right rules of conduct. Both for survival and prosperity. And also, and much for important, for the health, well-being and prosperity of our societies. It's been a feedback loop of sorts. If you don't think Picasso's "Guernica" was not only a great work of Art but also a magnificent moral statement go take another look. So we'd like to run a little test and below the line we'll even provide our own strawman to argue with.

Posted by dblwyo at 06:28 PM | Permalink | Comments (0)

There's a great story running around the web which we reproduce below about a parking lot confrontation between an aging WW2 vet and a singing doctor. It's worth a read and a listen all on its' own but afterwards take yourself a step or two back and frame the picture, put it in a bigger context and ask yourself what we learn. I'll pick up that thread more below but here's a hint: troubles schmubles.

Actually (UPDATE) it occurs to me something more than a hint is necessary - this post starts with this great story and video on what the Greatest Generation did, for themselves and us. But is goes on to ask and answer the really hard question: SO WHAT ?

And the answer to that is we take for granted so much that we inherited from these folks but also underestimate what they did for us. And in particular what the whole GG did - for example WW2 was badfor us but incomparably worse for the rest of the world. But most importantly we go on compare what we face today (not much in comparison) and ask the second great question. What happens if we squander this window of opportunity to address our problems now and wait until we get our own chance to be a great generation. Remember..most of the challenges these folks had to deal with could have been avoided or mitigated ! Think about that.Troubles, schmubles indeed.

The elderly parking lot attendant wasn't in a good mood!

Neither was Sam Bierstock. It was around 1 a.m., and Bierstock, a Delray Beach , Fla. , eye doctor, business consultant, corporate speaker and musician, was bone tired after appearing at an event.

He pulled up in his car, and the parking attendant began to speak. "I took two bullets for this country and look what I'm doing," he said bitterly. At first, Bierstock didn't know what to say to the World War II veteran. But he rolled down his window and told the man, "Really, from the bottom of my heart, I want to thank you." Then the old soldier began to cry. "That really got to me," Bierstock says.

Cut to today.

Bierstock, 58, and John Melnick, 54, of Pompano Beach - a member of Bierstock's band, Dr. Sam and the Managed Care Band - have written a song inspired by that old soldier in the airport parking lot. The mournful "Before You Go" does more than salute those who fought in WWII. It encourages people to go out of their way to thank the aging warriors before they die. "If we had lost that particular war, our whole way of life would have been shot," says Bierstock, who plays harmonica. "The WW II soldiers are now dying at the rate of about 2,000 every day. I thought we needed to thank them."

The song is striking a chord. Within four days of Bierstock placing it on the! Web the song and accompanying photo essay have bounced around nine countries, producing tears and heartfelt thanks from veterans, their sons and daughters and grandchildren. "It made me cry," wrote one veteran's son. Another sent an e-mail saying that only after his father consumed several glasses of wine would he discuss " the unspeakable horrors" he and other soldiers had witnessed in places such as Anzio , Iwo Jima, Bataan and Omaha Beach . "I can never thank them enough," the son wrote. "Thank you for thinking about them."

Bierstock and Melnick thought about shipping it off to a professional singer, maybe a Lee Greenwood type, but because time was running out for so many veterans, they decided it was best to release it quickly, for free, on the Web. They've sent the song to Sen. John McCain and others in Washington . Already they have been invited to perform it in Houston for a Veterans Day tribute - this after just a few days on the Web. They hope every veteran in America gets a chance to hear it.

Taking for Granted ? 

It's a point we've made before - we take for granted what's handed to us and forgot how we got here and what the prices were and are. This election for example is "fraught" with major decisions about the direction of the country, "most important of my lifetime" several distinguished pundits say. Rubbish. We DO have several serious and major decisions that will influence things - so ? We do have several candidates who aren't the best alternatives and characterisitics we'd like or need - so ? The world is changing in threatening ways and we to adapt and adopt new ways - so ? Let's get real.

We're still hung up in this election on the results of Vietnam and the '60s. My dad was of the Greatest Generation and when '68 (which saw two assassinations, widespread riots, draft protests and mounting casulties) happened his war was half as far behind him as that stuff is behind us. Heck you don't even have to go back that far to put it in context. In 1980 the Russians invaded Afghanistan, we triggerred the overthrow of the Shah and the rise of the Iranian kelptocracy, were trapped in REAL stagflation with interest rates nearing 21% and unemployment nearing (?) 8-9%. Can you imagine. Yet here we are with all our troubles still enjoying the results of nearly three decades of sustained prosperity, despite all the worrying we do on this blog. The point of that worrying is not to wring our hands but to face reality and get on with dealing with it.

The Bigger Picture 

We look back and then things get put in context. Let's count the things the GG faced and dealt with: the Great Depression and WW2 obviously. What we should remember is that they put togethre in the 50's the greatest increase in middle class wealth and human prosperity the world had ever seen. A jump in the way things work that laid the foundations for everything since thing.(The Fifties by David Halberstam). And set the foundations for what's now spreading around the world. But in addition to all those trials and troubles we mentioned it was the GG who ALSO wrote and passed and implemented the Civil Rights legislation, went to the Moon, passed the most innovative environmental legislation in history and oversaw the greatest transition in the workforce with women enterring and all the resultant social changes we now take for granted. Would a black man and a white women be running were it not for them ? And to top it off they conceived, designed, fought and won a multi-generation war in the shadows called the Cold War. Which was a darn real war where our enemies did their level best to destroy us and for which our victory was NOT a sure thing. In fact at times as the Iron Duke put, "it was a near-run thing....a damnn near-run thing".(The Cold War : A New History by John Lewis Gaddis)

Let's take one more giant step back because this picture we're looking at is bigger than we saying. For on thing there was a lot else going on in WW2 than just us (World War II). The same thing can be said about the Depression, post-war changes, the Cold War and so forth. Take a good hard look at the chart to the right, which shows total military and civilian casulties in WW2 innumbers and percentages. Nearly 30 million people served in the Russian military by one estimate, of whom 8 died. All told the Russians lost ~24 million people, or ~14% of their total population. In contrast take a look at the US figures. On the chart they're so small you can hardly read them.

Believe me, this takes nothing away from what our veterans sacrificed. My dad served in that war as did my mom and neither ever talked about it much. But they and the rest of our Greatest Generation didn't do it alone and a lot of people made enormous sacrifices to get us where we're at today. 

Today's Opportunities

One other small point in this little Sunday sermon. Actually two. While we're taking for granted too much of what we've got without realizing what was paid we also need to realize a couple of other things. It's not a single-price deal - once paid and forgotten. Like any valuable thing it needs maintainence, resources and care. And from time-to-time major investments. And some of us are making those payments. You might also want to look back at the Gratitude Campaign.

But the other little point I'll make is that it is indeed up to us - we have a clear and definite opportunity to meet these challenges we face, small as they are in comparison, and keep the string going. In fact we have no choice. Now here's a really interesting thing - would the sacrifices of the Greatest GenerationS, all of them, have been as necessary, as large & painful and as catastrophically expensive if "somebody" had seized on earlier windows of opportunity to do something smart. And not wait until it was hard.

Herewith endeth the lesson and sermon for this Sunday.

Your "scripture" readings for the week's contemplation are:

• Christmas Spirit and Dinner Miracles

• And Peace Unto Men....Practicing Spirit

• Following the Spirit: Leaders, Leadership and the "Wise" Course

• Practicing the Spirit: Respect, Tolerance and Civitas

Posted by dblwyo at 08:45 AM | Permalink | Comments (0)

There were a lot of interesting stories this last week, which led to the 3-part split you've seen today. But a useful aspect is that it allows me to wrap some narrative introduction around each big category and linke them together. If the Int'l Section focused on progress and it's requirements the Domestic Section flipped the coin to ask what kind of government and policies do we want, need and will get. The two are not seperate questions. Nor is this third readfest post which focuses on Culture and Science. But what we're really looking at here is what values, choices & capabilities we choose to have or develop.

So what's your answer ?

Unlike the survey pundits Values have never been a proxy for social policy, e.g. "Right to Life". Values are about the rules that one chooses to live by, or one learns with time and experience. Of course nobody does that in a vacuum - in this case there are two very interesting posts. One on the split in Hollywood over what makes a good movie. Who cares - well in my mind movies reflect and shape our values. They are to us what the shamans, bards and poets were in their day - our repository of stories we tell ourselves about how to prosper in the world. The other side of the house is "High Culture" which has yet again come forth with a screed against all things popular. Not for their own sake but because it's dumbing down America. Not entirely sure I disagree - have you every seen an NFL playbook or game plan. Stupid or uneducated people don't make and use such things. But you decide.

Because if those people focus their talents and energies just on playing a better football game then we do have a problem. We're starting to see some real major initiatives in tackling all the serious issues we face in the world. Where instead of pursuing things in their traditional isolated and parochial silos various disciplines are establishing major efforts designed to work across time and involve all the relevent discipliens. Hallaluah ! I say. About damm time. These are serious times and we need serious...well you know the rest, right ?

At the end of the day what is Faith without Good Works. In other words Vision and Strategy are great things. But the road to Camelot was paved with good intentions and nobody got there. Having squandered our best window of opportunity (which if you still haven't figure it out I'll admit po's me just a tiny bit) we need to turn these values, visions, and discoveries into actions, solutions, products and services.

Let's let the new CEO of Pepsi, both a popular culture and business icon, have the last word here:

The Pepsi challenge CEO Indra Nooyi says the giant can go healthy, but cola wars and corn prices will test her leadership. Nooyi didn't wait to become an elder statesman CEO before making herself heard on the public stage. Her predecessor, Steven Reinemund, calls her a "larger-than-life leader." In a speech to the food industry in January, she pushed the group to tackle obesity. "Do you remember campaigns like 'Keep America beautiful'? What about 'Buckle up'?" she asked. "I believe we need an approach like this to attack obesity. Let's be a good industry that does 100% of what it possibly can - not grudgingly but willingly." At the 2008 World Economic Forum in Davos she told Secretary of State Condoleezza Rice it was critically important that "we use corporations as a productive player in addressing some of the big issues facing the world."

Culture

Red vs. Blue In Hollywood, Too The House of Oscar is never more fascinating than when divided against itself. And this year, the division runs deep. It's not exactly the same as the red state/blue state divide -- the Academy's membership, politically speaking, is a big bucket of indigo splashed across the screen, with some lonely red droplets here and there. But its taste in films comes in red and blue shades of aesthetic conservatism and progressivism. And if the main Oscar contenders are any sign, the two sides are dug in across a wide chasm, bickering over what a good movie and the future of Hollywood should look like.

Dumb and Dumber: Are Americans Hostile to Knowledge? But now, Ms. Jacoby said, something different is happening: anti-intellectualism (the attitude that “too much learning can be a dangerous thing”) and anti-rationalism (“the idea that there is no such things as evidence or fact, just opinion”) have fused in a particularly insidious way. Not only are citizens ignorant about essential scientific, civic and cultural knowledge, she said, but they also don’t think it matters. She pointed to a 2006 National Geographic poll that found nearly half of 18- to 24-year-olds don’t think it is necessary or important to know where countries in the news are located. So more than three years into the Iraq war, only 23 percent of those with some college could locate Iraq, Iran, Saudi Arabia and Israel on a map. Ms. Jacoby doesn’t expect to revolutionize the nation’s educational system or cause millions of Americans to switch off “American Idol” and pick up Schopenhauer. But she would like to start a conversation about why the United States seems particularly vulnerable to such a virulent strain of anti-intellectualism. After all, “the empire of infotainment doesn’t stop at the American border,” she said, yet students in many other countries consistently outperform American students in science, math and reading on comparative tests. In part, she lays the blame on a failing educational system. Ms. Jacoby also blames religious fundamentalism’s antipathy toward science, as she grieves over surveys that show that nearly two-thirds of Americans want creationism to be taught along with evolution. Ms. Jacoby doesn’t leave liberals out of her analysis, mentioning the New Left’s attacks on universities in the 1960s, the decision to consign African-American and women’s studies to an “academic ghetto” instead of integrating them into the core curriculum, ponderous musings on rock music and pop culture courses on everything from sitcoms to fat that trivialize college-level learning. For all her scholarly interests, though, Ms. Jacoby said she recognized just how hard it is to tune out the 24/7 entertainment culture. A few years ago she participated in the annual campaign to turn off the television for a week. “I was stunned at how difficult it was for me,” she said. The surprise at her own dependency on electronic and visual media made her realize just how pervasive the culture of distraction is and how susceptible everyone is — even curmudgeons.

Science

Introduction to the Grand Challenges for Engineering Throughout human history, engineering has driven the advance of civilization. From the metallurgists who ended the Stone Age to the shipbuilders who united the world’s peoples through travel and trade, the past witnessed many marvels of engineering prowess. As civilization grew, it was nourished and enhanced with the help of increasingly sophisticated tools for agriculture, technologies for producing textiles, and inventions transforming human interaction and ommunication. Inventions such as the mechanical clock and the printing press irrevocably changed civilization. In the modern era, the Industrial Revolution brought engineering’s influence to every niche of life, as machines supplemented and replaced human labor for countless tasks, improved systems for sanitation enhanced health, and the steam engine facilitated mining, powered trains and ships, and provided energy for factories. In the century just ended, engineering recorded its grandest accomplishments. The widespread development and distribution of electricity and clean water, automobiles and airplanes, radio and television, spacecraft and lasers, antibiotics and medical imaging, and computers and the Internet are just some of the highlights from a century in which engineering revolutionized and improved virtually every aspect of human life. Find out more about the great engineering achievements of the 20th century from a separate NAE website. For all of these advances, though, the century ahead poses challenges as formidable as any from millennia past. As the population grows and its needs and desires expand, the problem of sustaining civilization’s continuing advancement, while still improving the quality of life, looms more immediate. Old and new threats to personal and public health demand more effective and more readily available treatments. Vulnerabilities to pandemic diseases, terrorist violence, and natural disasters require serious searches for new methods of protection and prevention. And products and processes that enhance the joy of living remain a top priority of engineering innovation, as they have been since the taming of fire and the invention of the wheel. In each of these broad realms of human concern — sustainability, health, vulnerability, and joy of living — specific grand challenges await engineering solutions. The world’s cadre of engineers will seek ways to put knowledge into practice to meet these grand challenges. Applying the rules of reason, the findings of science, the aesthetics of art, and the spark of creative imagination, engineers will continue the tradition of forging a better future.

• MIT Energy Initiative
• A conversation with Susan Hockfield, President MIT

Billions of investment dollars flow to climate change, clean tech Institutional investors are committing billions of dollars to investments in climate change and are embarking on a bold new action plan to raise the profile of energy efficiency and clean technologies around the world. Nearly 50 leading U.S. and European investors representing more than $8 trillion of assets met on Feb. 14 at the United Nations to lay out a timetable for their commitments to global climate change and to call on governments and other investors to act with their money as well. The group says its investment commitments will boost energy efficiency and clean technologies as well as require tougher scrutiny of carbon-intensive investments that may pose long-term financial risk. That means investments in industries that are heavy carbon emitters are under threat. By raising the specter of divestments due to risk these investors are firing a warning shot.

• Climate change debate needs revolution A revolution of society on a scale never witnessed in peacetime is needed if climate change is to be tackled successfully, the head of a major business grouping has warned.

Devastation of Trawling Visible from Space Bottom trawling for fish stirs up billowing plumes of sediment that can be seen from space and destroys entire seafloor ecosystems, new imagery reveals. The technique, used all over the world, is a way to catch fish in deeper parts of the ocean with huge, deep nets, now that many near-shore fish populations have been virtually wiped out from over-fishing. Several studies have shown the significant impact that trawling has on ecosystems, killing corals, sponges, fish and other animals.

Virtual Teachers Outperform Real Thing Never let schooling get in the way of your education, Mark Twain supposedly said, and the latest advances in psychology and behavior science take that to a new dimension - virtual reality and the digital domain. Virtual characters and digital tutors are helping children and adults develop advanced social and language skills that can be tough to learn via conventional approaches, according to researchers who briefed reporters here last week at the annual meeting of the American Association for the Advancement of Science.

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Isn't that an interesting question, and it resonates with the central one from the prior post. Hopefully, at least in some readers the title calls to mind the Rolling Stones song and all the subconscious wrapping that goes with it. Below you'll find a bunch more excerpts this time on domestic politics and policy, somewhat dominated by the elections of course with the sudden reversal on the Democratic side. Fascinating how all of a sudden things have narrowed done in a couple of ways. First to candidates. And second to some key issues - particularly the economy. While the primaries are still sorting out who we get to vote for it's time to start thinking about what criteria we're going to use to decide. Let's set that table with the following excerpt:

 You Get the Government You Deserve I have one more item of bad news related to the mortgage meltdown: It'll likely provide lots of ammunition for advocates of more government regulation, in the mortgage industry and everywhere else. I'm afraid we're getting what we deserve. Three things have become clear as the mortgage/real estate debacle has unfolded: 1) Left to their own devices, millions of people (and some pretty sophisticated lenders and investment banks) will do some profoundly stupid things; 2) The effects of those stupid things spill over to affect everyone else; 3) Lots of Americans expect their government to do something about it. (Let's not pretend that it's just Democrats; the White House was pretty darn quick to roll out its bailout plan.) One of the fundamental debates within economics concerns the degree to which individuals make fully rational decisions. Do people always act in their own best interest? Or can government help prevent them from doing things that they'll later regret? This debate over "rational man" isn't just academic -- it lies at the heart of what government ought to do. Should government treat its citizens as informed adults or semi-rational adolescents?

I've shared that article with several friends and most of them just read the excerpt without reading the whole article. But in fact it's more balanced and nuanced if you read the whole thing than the first paragraph would appear. In particular it lays out the choices pretty clearly. We strongly suggest reading the whole thing because it provides a great filter for thinking about the rest of these stories. It also links back to the question at the center of the last post - what kind of government do you want ? What kind of government do we need ? Can the two be reconciled.

Last week's WRFest summarized our views on a framework for evaluating the candidates along the axis of Foreign Policy, Economic Policy and Domestic Policy and it might be worthwhile to review it: WRFest 16Feb08(Politics): Turning Tides and Choices .

Finally, along the lines of wants and needs, let's let the Stone wrap up the table setting with the alternative to thinking it through (of course maintaining our tongue-in-cheek traditions as well :) ):

SYMPATHY FOR THE DEVIL (slightly interpreted by Axel and Guns N Roses and supporting cast of assorted disturbed crazies) 

Politics and

Fine words and economic reality With eight wins out of eight in the most recent contests and another expected on Tuesday in Wisconsin, Barack Obama is for the first time the clear favourite to win the Democratic nomination. His support continues to broaden: beyond the affluent, who liked him from the outset; beyond blacks, who switched wholesale from Hillary Clinton starting in South Carolina; lately even to the white working class and Latinos. Those are the constituencies that Mrs Clinton is relying on to win the crucial primaries in populous Texas and Ohio on March 4. As that showdown approaches, contrary to Mrs Clinton’s claim to be the better manager, Mr Obama is running a more effective campaign, with more and better organisers in the right places and more and better advertising at the right times. Mr Obama is a paradox, as yet unresolved. His plan and his votes in the Senate show that he is a liberal, not a centrist. And he is no wavering or accidental liberal. His ideas are of a piece. He sees – or convinces people that he sees – a bigger picture. And yet this leftist visionary is pragmatic, non-ideological and accommodating of dissent. More than that, in fact, he seems keen to listen to and learn from those who disagree with him. What a strange and beguiling combination this is.

When the Magic Fades At first it seemed like a few random cases of lassitude among Mary Chapin Carpenter devotees in Berkeley, Cambridge and Chapel Hill. But then psychotherapists began to realize patients across the country were complaining of the same distress. They were experiencing the first hints of what’s bound to be a national phenomenon: Obama Comedown Syndrome. The afflicted had already been through the phases of Obama-mania — fainting at rallies, weeping over their touch screens while watching Obama videos, spending hours making folk crafts featuring Michelle Obama’s face. These patients had experienced intense surges of hope-amine, the brain chemical that fuels euphoric sensations of historic change and personal salvation. But they found that as the weeks went on, they needed more and purer hope-injections just to preserve the rush. They wound up craving more hope than even the Hope Pope could provide, and they began experiencing brooding moments of suboptimal hopefulness. Anxious posts began to appear on the Yes We Can! Facebook pages. A sense of ennui began to creep through the nation’s Ian McEwan-centered book clubs.

McCain's econ brain On the economy, McCain's most daring manifesto is his healthcare plan. Today, McCain is advocating a plan that's radically different from those of Clinton and Barrack Obama, and - if he goes all the way by following Gramm - could revolutionize America's healthcare system. For McCain and Gramm, the problem with our healthcare system - and the reason why over 47 million Americans are uninsured - is that it¹' excessively, scandalously expensive. The solution, they say, is to let Americans shop for healthcare with their own money. McCain advocates giving tax rebates of $2500 per individual or $5000 per family. With that money, families could purchase policies on their own. What's truly radical about the plan is that it eliminates the tax exclusion for healthcare benefits offered by companies to their employees, and replaces it with the $2500 to $5000 rebates. Consumers could then use that cash to buy their own insurance in what Gramm foresees as a vibrant, consumer-driven marketplace for healthcare packages. By contrast, Clinton and Obama want to leave the employer-based system in place; Clinton would make big companies either fund gold-plated packages for workers, or pay a stiff tax to support a new Medicare-like system. The Democrats wouldn't allow insurers to charge lower rates for young workers who cost far less than older Americans. McCain favors allowing insurers to charge rates based on actual cost.

Economy

Facing Reality: Father Feldstein Explains It All  Sometimes life is just full of those funny little coincidences, convergences and serendipities. After a friend asked about the stimulus package and caused us to generate a graphic on where we're at in the business cycle "Father" Martin Feldstein not only appeared on the Charlie Rose show but had a great WSJ column "explaining it all to us". Seriously - not if you can find the time but if you're at all concerned with the economic situation, taxes, Social Security reform and the long-term future of retirement or the long-term prospects for this country don't find, make the 30 min. you'll need to watch this.

Economic Woes Reveal a Long-Felt Unease Even when experts were declaring the economy healthy, many Americans voiced a vague, but persistent dissatisfaction. True, jobs were relatively plentiful over the last few years. It was easy to borrow and very cheap. The sharp rise in the value of homes and plentiful credit cards encouraged a nation of consumers to get out and buy. But to many people, something didn't feel right, even if they couldn't quite explain why. Now the economic tide is receding, and the undertow that was there all along is getting stronger. Take away the easy credit and consumers are left with paychecks that, for most, haven't nearly kept pace with their need and propensity to spend. Americans' declining confidence in their economy is triggered by a storm of very recent pressures, including plunging home prices, tightening credit, and heavy debt. But it is compounded by anxiety that was there all along, the result of a long, slow drip of worries and vulnerabilities. Much of that anxiety is the uncomfortable, but expected jolt of the economic roller coaster. During a downturn, people become less confident about keeping their jobs or being able to find new ones, meeting household expenses and about the prospects for the future. But there may be more to it than just cyclical ups and downs.

Economic Tides, Naked Swimmers and Sharp Rocks Warren Buffett has a famous saying that when the tide goes out you found out who was swimming naked. Well, it's true. Worse you also find out who's about to land on sharp coral and get cut up, or those who already have. And, speaking as somebody who's done a little diving, you also find out how many sharks are around who'll smell the blood. Unfortunately we may be about to find out how many naked swimmers, sharp rocks and sharks there really are after a couple of decades of dodging all that.

Poverty Is Poison To be poor in America today, even more than in the past, is to be an outcast in your own country. And that, the neuroscientists tell us, is what poisons a child’s brain.

Other Policies

US army ‘stretched thin’ by Iraq war The Iraq war has strained the US military to the extent that America could not fight another large-scale war today, according to a new survey of military officers. Nine in 10 officers said the war had stretched the ­military “dangerously thin”. However, 56 per cent disagreed with the suggestion that the conflict had “broken” the armed services, while 64 per cent said morale was high. More than 3,400 current and retired officers, including more than 200 generals and admirals, participated in the survey by Foreign Policy magazine and the Center for a New American Security, a centrist think-tank. The results underscore the concerns of officers about the strain that the wars in Iraq and Afghanistan have placed on the military. Of respondents, 60 per cent said the military was weaker today than five years ago.

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In these weekly reader linkfests we try to provide excerpted summaries of interesting and valuable stories that cover the range of topics impacting our world: Int'l Affairs, Politics & Economics, Science, Culture & Values with the coverage varying by the ebb and flow of news and interests. This time there's been enough that we're going to split them up into three parts with the first one being on Int'l Affairs. Yet at the same time we'll ask you to remember that they're part of a bigger whole and are woven together. Or can be interwoven with a little word and thought magic by looking at the shared themes, linkages and constructs.

Here let's focus on what's going on in the world. We've talked before about a couple of things. First is all the rapid fire changes and second is the fact that in the last 2-3 decades more things have gotten better for more people than at any time in human history. Think about that for a minute - you are literally living thru an evolutionarily important moment. Take a look at the multi-part chart. The top chart shows GDP per person since 1980. It may help to know that a roughly equivalent chart since 1500 a.d. is pretty flat at best. In fact as best we can guess it's flat for the last 10,000 years. Literally.

The bottom chart shows the same data for different regions of the world. You'll notice some significant and profound differences. The question is why. Let's point to a recent paper by Andrei Shliefer:

The Age of Milton Friedman. The last quarter century has witnessed remarkable progress of mankind. The world’s per capita inflation-adjusted income rose from $5400 in 1980 to $8500 in 2005. Schooling and life expectancy grew rapidly, while infant mortality and poverty fell just as fast. Compared to 1980, many more countries in the world are democratic today. The last quarter century also saw wide acceptance of free market policies in both rich and poor countries: from private ownership, to free trade, to responsible budgets, to lower taxes. Three important events mark the beginning of this period. In 1979, Deng Xiao Ping started market reforms in China, which over the quarter century lifted hundreds of millions of people out of poverty. In the same year, Margaret Thatcher was elected Prime Minister in Britain, and initiated her radical reforms and a long period of growth. A year later, Ronald Reagan was elected President of the United States, and also embraced free market policies. All three of these leaders professed inspiration from the work of Milton Friedman. It is natural, then, to refer to the last quarter century as the Age of Milton Friedman. The association between free market policies and social progress notwithstanding, economists remain divided in their assessments of this Age. Two recent books illustrate the divisions.

Click on the link and you can read the whole thing, which is very non-technical, explains that graph and several others and discusses some of the issues and debates (it's also dloadable if you like). We'll give you one more from a major Indian entrapaneur talking sustaining and extending India and the developing country's success to date (btw in the chart above a) India is South Asia roughly and b) it picked up after market reforms in the '90s):

A Challenge for India N.R. Narayana Murthy, chief mentor and cofounder of Infosys Technologies, sees a bright future for developing countries — if they can use their success to address the problems of poverty. Infosys Technologies, one of India’s oldest and biggest software companies, is a dominant player in the outsourcing industry. And its cofounder N.R. Narayana Murthy has helped drive India’s emergence as a global economic powerhouse. He recognizes the enormous growth that lies ahead for India, China, and other developing nations as they take greater part in the global economy, but also sees challenges. For Murthy, who has long eschewed the trappings of wealth in favor of a more modest life, India’s success — and, implicitly, the continued growth of other developing nations — will not be guaranteed until its benefits reach the country's rich and poor alike.

 So we'd ask you to read the following excerpts with all that in mind: what is progress, how does it come about and what kind of political framework is required ? Most of these stories are about folks struggling with one or another or all of those questions. There all interesting (otherwise why post) and probably deserve their own post but they make an interesting set. But we'd like to point to three in particular because they highlight some key issues.

1. China has concentrated it's development efforts on the coasts, just as earlier they started with Agricultural reform to lay a foundation for manufacturing. Now the coast is experiencing rising labor coasts, congestion and pollution while the central provinces have lagged and there's rising social dissent at the income disparities. It's always been the plan to eventually shift to Central China but that's now becoming a major new direction. Remember China has to create something like 60 million new jobs/year just to break even. They can't afford for growth to slow without social collapse, and therefore neither can we.

2. Everybody is worried about the resurgence of aggressive Russia foreign policy but in fact the underlying reality is that their military forces are incapable of projecting power and on a relative scale are not very meaningful. What this is really all about is a bit of posturing for the domestic audience to continue to restore a little pride and faith - a pride which was sadly damaged by the West's not-so-benign paternalism. A little forebearance and civilized charity a decade ago on our and the Europeans part would have done a great deal to have kept a calm bear. As yea sow so shall yea reap.

3. Germany is beginning to undertake the most serious re-consideration of it's socio-economic structure, quietly, without fanfare and without quite meaning to, since the formation of the modern state in the late 19th C. Germany the modern nation was formed by the shape and nature of German corporatism which is often given credit for the post-WW2 "Wirtschaftswunder", or economic miracle. Perhaps but it also leads, and has led, to a lot of cronyism, corruption, malfeasance, lack of adaptation and innovation and general non-responsiveness. All of the things we were lecturing the SE Asian countries about a while back, eh ? :). What most people don't realize is how central the institution and forms of big business are to the central structure of our societies. Nor how the different ones evovled by different choices on industry, structure and governance. The reference work cited along with the article on German changes will take you toward the best discussion ever written, IOHO, to explaining how that's worked around the world over the last 100 years. If you'd like to know what some of the deep currents and structures have been...well...try that...

China & Asia

Central China blazes own path China’s economic ”miracle” has so far been largely confined to the country’s east coast. This is mainly due to the ease of shipping export goods manufactured in the Pearl River and Yangtze River deltas out of ports in Shanghai, Ningbo, Guangzhou, and Hong Kong. Facing wide regional income disparities, the central government is looking for ways to spread of economic development into places like Anhui and Jiangxi – two inland provinces that sit nestled like twin ice-cream scoops in the bowl of rich coastal provinces such as Jiangsu, Zhejiang, Fujian, and Guangdong. In the next five years, central China will grow rapidly, in part by imitating east China’s development model - Jiangxi and Anhui are already capturing the low end of export-processing industries crimped by rising input costs on the coast. But mimicking east China’s export-led approach will not be central China’s main growth engine. Instead, Anhui and Jiangxi aim to become “China’s China” – suppliers of low-cost goods to the rest of China (especially its wealthy east coast) just as China as a whole supplies low-cost goods to the world. In recent years, rising costs for inputs like labour, water and electricity in China’s highly developed east coast have created an opening for central China in the export sector.

• LEADERSHIP: World Class Chinese Troops Of the three "Chinese" armed forces in the world (the others being China and Taiwan), Singapore is the most effective, on a per-soldier basis. Singapore spends the most per soldier on weapons, equipment and training. China and Taiwan look to Singapore as the example of how effective Chinese soldiers can be. But it's not a matter of being Chinese. Singapore has long stressed education for all citizens, and borrows proven training techniques from other armed forces. For decades, Singaporean staff officers have studied military developments throughout the world, and identified technology and techniques that could of use to their armed forces.

Bernanke's Rate Cuts Force Asia to Turn Back to Price Controls, Subsidies Under Bernanke's chairmanship, the Federal Reserve's steepest interest-rate cuts since 1990 are limiting his Asian counterparts' options to curb inflation. Instead of raising their own borrowing costs or letting their currencies appreciate faster, governments are resorting to regulating meat and egg prices in China, stockpiling cooking oil in Malaysia and subsidizing utility bills in Indonesia and the Philippines. Such measures may backfire. Artificial price curbs and subsidies only feed more demand for oil and other commodities, and ultimately will make it harder to contain inflationary pressures worldwide… Stockpiling, subsidies and price controls do nothing to rein in excess demand in Asia's fast-growing economies, which is already pushing up food and energy costs worldwide. The G-7 in Tokyo said governments should avoid steps to artificially lower energy prices. The Fed's rapid rate-cutting leaves Asia's policy makers with few good alternatives. China and other export-driven economies have tried to limit the appreciation of their currencies to keep their goods competitive in world markets, at the cost of higher inflation at home.

Euope & Russia

Europe must unite over a Russia policy Russia is the largest and one of the most important of the European Union’s neighbours. The challenge is for the EU to work out a common policy on how to handle its neighbour – and to implement it consistently. The new Lisbon treaty speaks of the EU’s responsibility to maintain the cohesion of its external operations, but only within the scope of the community’s responsibility. Beyond that, there is a growing tendency for member states and large corporations to act autonomously. There is no cohesion here. On the contrary, diverging interests and even rivalry are common. Second, it is crucial that goals and expectations are realistic. Russia does not aspire to follow a European model. It strives to emphasise its identity and become a pole that attracts other countries. Last but not least, a comprehensive EU-Russia partnership must not be an obstacle to developing EU relations with other neighbours in eastern Europe. The European aspirations of those countries are, at times, seen as part of a power struggle between Russia and the west. This simplistic approach does not take account of the countries’ sovereign will to pursue modernisation based on European standards – which does not rule out a harmonious co-existence with Russia.

• A bear at the throat The European Union is belatedly grasping the riskiness of its dependence on Russian gas, but it is disunited and short of ideas for how to reduce it

RUSSIA: The War With China So far, the attempt at getting back into the superpower business isn't going so well. A flotilla of Russian warships conducting exercises in the Mediterranean were observed to be hesitant and uneasy as they went through their paces. These were crews and officers who were out of practice. One of the support ships broke down and had to be towed to port. The increased number of long range bomber flights are mostly for show. They serve little military purpose. It's all about rebuilding some respect for the Russian military. The government is making a lot of noise about rebuilding the armed forces, and another Cold War with the U.S., but this is all talk, to make the government appear like it's doing something. The military would need massive amounts of money (over $100  billion a year, for a decade or more) to restore any meaningful amount of military power. Nothing near that amount is forthcoming. The government is trying to get the population stirred up, so there is less resistance to the purchase of many expensive warplanes and ships. A lot of this necessary because China is buying less, and starting to offer their own stuff, often containing stolen Russian military technology, on the world market. China is threatening to offer its copy of the Su-27 (the J-11). Currently, half of Russian weapons export sales are Su-27s. The Chinese ignore Russian complaints about the stolen technology. To keep Russian weapons manufacturers in business, the Russian military has to buy more, to make up for the lost Chinese sales. Western firms are also going after the lucrative Indian arms market, which Russia has dominated for decades.  Last year, Russia sold $7 billion worth of weapons overseas, and may have a hard time topping that this year.

German corporatism’s death It was always clear that German corporatism would not survive the first half of the 21st century. What was less clear was how long this process would last and which form its destruction would take. Two important events last week greatly accelerated that process. Germany’s clubby corporatism is a source not only of crime but of restrictive practices. With the help of the government, employers’ organisations and trades unions negotiate minimum wages for their entire sectors, which keep the long-term unemployed and immigrant workers out of jobs. The reason why the ugly face of German corporatism is being exposed now is not a sudden outbreak of criminal activity, but a change in public attitudes. Organisations such as the Berlin-based Transparency International have raised public awareness of corruption. Corruption is becoming less tolerated than it used to be. The laws have also been tightened, but it often takes years for this to have an impact. While Germany’s system of corporate governance continues to be incumbent-friendly, it is not as protectionist as it used to be. It is no longer self-evident that executive chairmen will move over to the supervisory board after their retirement.

• Big Business and the Wealth of Nations by Alfred D. Chandler, et.al. Written in nontechnical terms, this book explains how the dynamics of big business have influenced national and international economies. A path-breaking study, it provides the first systematic treatment of big business in advanced, emerging, and centrally-planned economies from the late nineteenth century, when big businesses first appeared, to the present. Large industrial enterprises play a vital role in developing new technologies and commercializing new products in all of the major countries. How such firms emerged and evolved in different economic, political, and social settings constitutes a significant part of twentieth century world history. These essays, written by internationally-known historians and economists, help one understand the essential role and functions of big business.
• Zumwinkel Tax Evasion Probe Enrages Germans Fed Up With Corporate Greed

Africa & ME

Al-Alamein Resort to Rise From WWII Battlefield Egyptian billionaire Ibrahim Kamel plans to build a $500 million seaside resort near the World War II battlefield of Al-Alamein that will compete with Red Sea vacation sites in Egypt. Kamel's Kato Group will construct 4,000 hotel rooms, a golf course, mall and entertainment complex in Ghazala Bay on the Mediterranean within five years, he said in an interview. Kamel, who is also chairman of Egypt's second-largest publicly traded hotel company, built a $45 million airport at Al-Alamein, a few kilometers from the resort, in 2005. Egypt's Mediterranean coast provides about 500 kilometers of beaches, mostly undeveloped. Emaar Properties PJSC, the biggest publicly traded real-estate developer in the Middle East, is investing $1.7 billion in a resort a few miles from the Kamel site. The Red Sea is the main tourist destination, luring more than half of Egypt's 11 million visitors each year.

Buy Africa Economies are prospering but political stability is fragile. Some hedge funds, brokerages and offshore investors believe that the time is ripe to "buy Africa". It is certainly the case that price-earnings ratios for many African stockmarkets were above their sectoral equivalents in mature markets in 2007, but the ongoing fallout from the subprime mortgage crisis in the US should act as a reminder that what goes up eventually comes down. The markets can turn very quickly—and very substantially. In Africa 1.01: Unlocking Investment Potential, published before subprime realism had begun to set in, emerging-market investment bank Renaissance Capital concludes that the continent "has probably turned the corner on its relative economic decline," thanks to "a supportive global backdrop for commodity exporters", hugely improved national balance sheets and "a political commitment to better economic policies".The binding constraint on most African economies has now shifted, it says, from a lack of foreign exchange and high cost of capital to "chronic infrastructure bottlenecks, reflecting the surge in GDP growth after years of investment neglect".

Kenya Disputed Election Awakens `Old Enmity' of Warring Tribes' Land Grab Bishop Cornelius Korir explains the violence that erupted in Kenya after disputed elections in December with one word: ``land.'' In Kenya's western Rift Valley, the violence -- which has killed at least 1,000 people nationwide -- is driven by decades of animosity among tribes. The Kalenjin and Luo resent the encroachment starting 100 years ago of Kikuyu farmers into what they regard as their ancestral land, said Korir. ``The new enmity, politics, wakes up the old enmity, ethnic competition over land,'' said Korir, 65. ``The worst thing the politicians have done is to awaken this thing, and when people move as a tribe you can't control it.'' Land redistribution is one of the main issues that must be tackled in negotiations being mediated by former United Nations Secretary-General Kofi Annan, said Odenda Lumumba, national coordinator of the Kenya Land Alliance, a lobbying group. Competition for land in the Rift Valley dates to the early 1900s, when white settlers displaced Masais, Kalenjins and Luos and brought in Kikuyus as tenant farmers, allowing them to grow crops and raise cattle in return for labor. As the Kikuyus prospered, the whites tried to restrict their cattle herds and demand more work. That prompted a series of confrontations leading to a Kikuyu-led insurrection known as Mau Mau against British colonialism in the 1950s. Under the post-independence government of Jomo Kenyatta, himself a Kikuyu, more farmers from the tribe moved from the Central Province to the Rift Valley, replacing white settlers by buying farmland and joining government resettlement programs. Now, finding farmland is becoming more difficult for demographic reasons. The Kalenjin birth rate of six or seven children to each woman has put growing pressure on farm and grazing land, said Elias Zulu, deputy director of the African Population and Health Research Center in Nairobi.

The next Dubai A huge Middle Eastern firm wants to remake the developing world in its hometown's image. Bin Sulayem sees Djibouti (pronounced ja-boo-tee) as a future Dubai - a sort of rags-to-riches story in the making. It sits on a strategic port at the mouth of the Red Sea, and has untouched beaches and that bizarre salt lake. Of course it also has little fresh water, a nearly 60% unemployment rate, and a chief export business of skins and hides. But in the past few years Dubai World has invested more than $800 million here, in projects such as a new port and free-trade zone, a luxury hotel, and paved roads. It even bought an airline to be the country's national carrier. It sounds crazy unless you consider what happened in bin Sulayem's hometown. Just 30 years ago Dubai wasn't much more than a struggling stretch of desert with a tiny bit of oil. Today, thanks to companies like Dubai World, it is a bustling mecca of Las Vegas-style tourism and New York-style capitalism with countless luxury hotels, dozens of skyscrapers, and 20% GDP growth in 2006. Bin Sulayem believes he can recreate that magic in Djibouti - and in many other unlikely places.

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Sometimes life is just full of those funny little coincidences, convergences and serendipities. After a friend asked about the stimulus package and caused us to generate a graphic on where we're at in the business cycle "Father" Martin Feldstein not only appeared on the Charlie Rose show but had a great WSJ column "explaining it all to us". Seriously - not if you can find the time but if you're at all concerned with the economic situation, taxes, Social Security reform and the long-term future of retirement or the long-term prospects for this country don't find, make the 30 min. you'll need to watch this.

Meanwhile here's the excerpt from the WSJ column - which we've pulled at some length (key points highlighted):

Our Economic Dilemma Although it is too soon to tell whether the United States has entered a recession, there is mounting evidence that a recession has in fact begun. Key measures of economic activity stopped growing in December and January or actually began to decline. The collapse of house prices and the crisis in the credit markets continue to depress the real economy. The sharp reduction in the federal funds interest rate and the new fiscal stimulus package may, of course, be enough to avert a downturn. Many forecasters still predict that the economy will just slow in the first part of this year and then rebound after the summer. But the hope that monetary and fiscal policies would prevent continued weakness by boosting consumer confidence was derailed by the recent report that consumer confidence in January collapsed to the lowest level since 1992. If a recession does occur, it could last longer and be more painful than the past several downturns because of differences in its origin and character.

  The recessions that began in 1991 and 2001 lasted only eight months from the start of the downturn until the beginning of the recovery. Even the deeper recession of 1981 lasted only 16 months. But these past recessions were caused by deliberate Federal Reserve policy aimed at reversing a rise in inflation. In those cases, the Fed increased real interest rates until it saw the economic slowdown that it thought would move us back toward price stability. It then reversed course, reducing interest rates and bringing the recession to an end. In contrast, the real interest rate in 2006 and 2007 stayed at a relatively low level of less than 3%.

A key cause of the present slowdown and potential recession was not a tightening of monetary policy but the bursting of the house-price bubble after six years of exceptionally rapid house-price increases. The Fed therefore will not be able to end the recession as it did previous ones by turning off a tight monetary policy. The unprecedented national fall in house prices is reducing household wealth and therefore consumer spending. House prices are down 10% from the 2006 high and are likely to fall at least another 10%. Each 10% decline cuts household wealth by about $2 trillion, and this eventually reduces annual consumer spending by about $100 billion. No one can predict the extent to which the coming fall in house prices will lead to defaults and foreclosures, driving house prices and wealth down even further. Falling house prices also discourage home building, with housing starts down 38% over the past 12 months.

But the principle cause for concern today is the paralysis of the credit markets. Credit is always key to the expansion of the economy. The collapse of confidence in credit markets is now preventing that necessary extension of credit. The decline of credit creation includes not only the banks but also the bond markets, hedge funds, insurance companies and mutual funds. Securitization, leveraged buyouts and credit insurance have also atrophied. The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment.

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Warren Buffett has a famous saying that when the tide goes out you found out who was swimming naked. Well, it's true. Worse you also find out who's about to land on sharp coral and get cut up, or those who already have. And, speaking as somebody who's done a little diving, you also find out how many sharks are around who'll smell the blood. Unfortunately we may be about to find out how many naked swimmers, sharp rocks and sharks there really are after a couple of decades of dodging all that. AP has an interesting story that throws all this into a sharp highlight. And below the line you'll find a pointer to another post on the breakdowns in the economic cycle that are part and parcel of this problem.

Economic Woes Reveal a Long-Felt Unease Even when experts were declaring the economy healthy, many Americans voiced a vague, but persistent dissatisfaction. True, jobs were relatively plentiful over the last few years. It was easy to borrow and very cheap. The sharp rise in the value of homes and plentiful credit cards encouraged a nation of consumers to get out and buy. But to many people, something didn't feel right, even if they couldn't quite explain why. Now the economic tide is receding, and the undertow that was there all along is getting stronger. Take away the easy credit and consumers are left with paychecks that, for most, haven't nearly kept pace with their need and propensity to spend. Americans' declining confidence in their economy is triggered by a storm of very recent pressures, including plunging home prices, tightening credit, and heavy debt. But it is compounded by anxiety that was there all along, the result of a long, slow drip of worries and vulnerabilities. Much of that anxiety is the uncomfortable, but expected jolt of the economic roller coaster. During a downturn, people become less confident about keeping their jobs or being able to find new ones, meeting household expenses and about the prospects for the future. But there may be more to it than just cyclical ups and downs.

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We've had so much political news from the campaigns that several posts have gone up over the week, along with some on economics and its' relationship to the elections. So it's time to look at some other areas like Foreign Affairs, Policy (beyond Politics) and Culture. We start with two interesting readings that bookend things rather nicely - one a summary of Davos (which yes, just finished up) on how the poohbah's outlook has gotten understandably grimmer with the worldwide downturn in the offing along with a fascinating piece on the Turkish headscarft controversy. which is not quite what you think it might be so you'll have to read that one. But nicely illustrates the problems of adjusting to the modern world while recovering traditional values and beliefs.

Then there are some interesting pieces on Europe and France where Sarkozy's initial honeymoon is turning into a nightmare. Oddly enough he's beginng to recapitulate Chirac's early career, an earlier post we put up on NATO's failure in Afghanistan and some more stuff on politics including an interesting piece on Obama vs McCain.

Two pieces we particularly like are a NYT discussion of how the Curtis Institute has used a Beethoven string quarter as a central organizing curriculum for this year's courses. The soundclips alone are worth listening to if you've any interest in classical music; or at least in understanding it's role and impact on high culture. Complemented by the surprise of having a major jazz artist win Album of the Year at the Grammies. 

General & Special

Alpine Schadenfreude Not surprisingly, the atmosphere at this year’s World Economic Forum was grim. Those who think that globalization, technology, and the market economy will solve the world’s problems seemed subdued. Most chastened of all were the bankers. Against the backdrop of the sub-prime crisis, the disasters at many financial institutions, and the weakening of the stock market, these “masters of the universe” seemed less omniscient than they did a short while ago. And it was not just the bankers who were in the Davos doghouse this year, but also their regulators – the central bankers. It seemed too good to be true – and it was. Worse, banks failed to understand the first principle of risk management: diversification only works when risks are not correlated, and macro-shocks (such as those that affect housing prices or borrowers’ ability to repay) affect the probability of default for all mortgages. Even the plea of one of central banker that “no one could have predicted the problems” moved few in the audience – perhaps because several people sitting there had, like me, explicitly warned about the impending problem in previous years. The only thing we got wrong was how bad banks’ lending practices were, how non-transparent banks really were, and how inadequate their risk management systems were. This is the third US crisis in the past 20 years, after the Savings & Loan crisis of 1989 and the Enron/WorldCom crisis in 2002. Deregulation has not worked. Unfettered markets may produce big bonuses for CEO’s, but they do not lead, as if by an invisible hand, to societal well-being. Until we achieve a better balance between markets and government, the world will continue to pay a high price.

Defining the limits of exceptionalism The right of faiths to run their own affairs and regulate their adherents' lives has recently become controversial—because of fear of Islam. In every democratic and more-or-less secular country, similar questions arise about the precise extent to which religious sub-cultures should be allowed to live by their own rules and “laws”. One set of questions emerges when believers demand, and often get, an opt-out from the law of the land. Sikhs in British Columbia can ride motorcycles without helmets; some are campaigning for the right not to wear hard hats on building sites. Muslims and Jews slaughter animals in ways that others might consider cruel; Catholic doctors and nurses refuse to have anything to do with abortion or euthanasia. Even in determinedly secular states like France and the United States, the political authorities often find that they are obliged, in various ways, to cope with the social reality of religious belief. America's Amish community, fundamentalists who eschew technology, has generally managed to get around the law with respect to social security, child labour and education. In France, town halls serving large Muslim populations ignore secular principles as they get involved in the ritual slaughter of sheep. Apart from exceptions to existing laws, another sort of problem arises when religious (and other) communities establish bodies that work very much like courts—and may be called courts—that enforce ancient rules that are often called laws.

Int’l Affairs

Europe needs Blair’s leadership and ability The former prime minister is the biggest leader Europe has produced since the era of Thatcher, Mitterrand, Kohl and Delors…Will Tony Blair re-enter politics as the European Union’s first president? This tantalising idea has been dangled in front of Europe’s leaders by Nicolas Sarkozy, the French president. Immediately, the ancient mariner of EU politics, Valery Giscard d’Estaing, stepped forth to say the former British prime minister cannot be EU president because Britain is insufficiently European. He was backed by a former right-wing French premier, Edouard Balladur. Events, time and the emergence of other names will decide whether Mr Blair wants to give up earning pots of gold and mobilise support to start earning the decent but relatively modest emolument of a top EU official. But what is the new president of the EU? For a start, he or she is not the president of Europe. The job is to preside or chair the European Council – the assembly of nation-states that decides whether to allow proposals from the European Commission to become EU law.

Sarkozy's `Free Fall' Jeopardizes Efforts to Revamp Labor, Welfare Systems Public resistance to Sarkozy's proposals on deregulation and pension-spending cuts, plunging approval ratings and dissension in his party have damaged his ability to remake the nation's welfare and labor systems. The prospect of a setback in local elections next month may deepen his political troubles. An Ipsos SA poll this month found only 39 percent of the French think the president is doing a good job, down from 67 percent after his election last May. The 53-year-old Sarkozy's Feb. 2 marriage to pop singer Bruni, 40, after an October divorce from his previous wife, Cecilia Ciganer-Albeniz, hasn't helped his standing, the Feb. 8-9 Ipsos survey suggested. The president's troubles come after French economic growth lagged behind the euro region for a second year in 2007 and the trade deficit surged to a record. Inflation is the fastest since 2004 and consumer confidence is at a record low. It's a far cry from Sarkozy's campaign agenda, which promised to increase consumer purchasing power and spur economic growth.

Europe, NATO and Afghanistan Continuing our Readfest postings we'll focus on the sudden emergence of concerns with Afghanistan and NATO's extremely poor performance with its' commitments there. In a nutshell the European militaries have failed most of the obligations they assummed post-911. They've failed because they lack the infrastructure of transportation, intelligence and logistics. Another problem has been that as a result of drastic cutbacks in troop levels as well as using their military forces as not-so-disguised jobs programs instead of focusing on national security they also don't have enough troops qualified to serve in either a combat or nation-building role. Finally many of these countries lack the domestic political support necessary to assume a combat role; i.e. meet their commitments. This is not, however, a new problem at all. In fact StrategyPage has been following the short-comings for several years now. What makes it interesting is that the issue has moved front-burner in international discussion - literally years after the problem was obvious on the ground. But even on that scale this isn't a new problem as is illustrated by Halbertam's "War in a Time of Peace". If you don't recall the Balkans exploded into ethnic violence but Europe told the US to keep hands off because they would handle it. Which they proved completely unable to do and, after years of ethnic cleansing and the loss of millions of lifes in events as bad as anything that happened in Cambodia; albeit on a smaller scale.

Exxon's wrathful tiger takes on Hugo Chávez AFTER winning a new term as president by a landslide a year ago, Hugo Chávez decided that it would be a nifty idea to squeeze the remaining private oil companies operating in Venezuela. So he ordered the tearing up of the contracts they signed in the 1990s, under which they were investing to develop deposits of super-heavy crude. In their place would come joint ventures in which Petróleos de Venezuela (PDVSA), the state oil company, would wield the controlling share. A year on, however, one of the multinationals, Exxon Mobil, is fighting back. Mr Chávez responded, not for the first time, by threatening to halt oil exports to the United States. These run at around 1.2m barrels a day (b/d) and represent about three-quarters of Venezuela's total export earnings. Under Mr Chávez, Venezuela's economy has become heavily dependent on imports, especially of food. Few believe he can afford to implement his threat, and the oil price rose only slightly. Not so PDVSA's bonds, whose value dipped sharply on investors' fears that lenders may face a higher risk of eventual default. On the face of things, that makes little sense. With around $100 billion in assets worldwide, including refineries in the United States, the Caribbean and Europe, PDVSA can easily pay any compensation award, which is unlikely to total more than $6 billion at most. But there are many signs that the once-mighty PDVSA may be running short of cash.

Iranians Scheme to Elude Sanctions Tough sanctions haven't brought Iran to its knees, but they're rewriting how business is done in the Middle East's second-largest economy. After several rounds of United Nations and U.S. economic and banking restrictions, Iranian businesses are starting to feel the pain. The measures are complicating how they finance operations, pay bills and export everything from pistachio nuts to Persian carpets. But the measures also are having unintended consequences, some not necessarily in American interests: They are strengthening business ties between Iran and some of its neighbors at a time when Washington wants to weaken them. They are providing China and other Asian giants with an opening to win big oil projects in Iran, as Western oil majors scramble for new reserves. They also are rerouting money flows between Iranian businesses and their overseas customers and suppliers, pushing them outside of the regulated global banking system. Businesses are using cash, informal money transfers and banks that aren't monitored by international authorities. That has some economists, banking experts and businessmen wondering whether sanctions are making it more difficult to trace money laundering, drug smuggling and terror financing in the region.

The enigma of Muqtada al-Sadr Neighbourhood reconciliation and security meetings like this are happening across Baghdad, said Mr Hamdoun, as he relaxed afterwards, drawing on another cigarette. But if the meeting had been held six months ago “that SOB from the Jaish al-Mahdi” would have dominated proceedings and dictated everything. Now he sits in the corner “like a puppy”. Iraqis must hope that his boss keeps things that way, said the sheikh, whose tribe includes both Sunnis and Shias. If Mr Sadr's men return to their “old ways”, he said, Baghdad and Iraq could be divided for ever. Last year, on August 29th, Mr Sadr ordered his militia to cease fire and stand down. At that time his men—or at least those proclaiming allegiance to him—were taking control of swathes of the capital, street by street. Their declared mission was to “secure and protect” Shia residents against the mortal threat of violence from Sunni insurgents. In fact, they seemed bent on conquering the city.

Veils of half-truth TO TURKEY'S secular elite it is a step back to the dark ages; to its conservatives, an overdue right. Either way, the constitutional changes approved by parliament to ease the ban on the wearing of the Muslim headscarf in universities will trigger a new battle between the mildly Islamist prime minister, Recep Tayyip Erdogan, and his secular opponents. Even the country's generals have remained silent, for a change. So what is all the fuss about? One answer is that the battle over headscarves is not really about religion at all. Rather it is a power struggle between a rising class of observant Turks from the Anatolian hinterland and an entrenched elite of secular “white” Turks, backed by the generals and the judiciary. “Women with scarves used to be our maids, now they have become our neighbours,” sniffs one Istanbul socialite. But snobbery and power are only part of the story. The headscarf debate reflects a clash between tradition and modernity as much as one between Islam and democracy. Many Westernised, middle-class Turks, especially women, fear for their lifestyle.

Politics and Policies

When Reality Bites There’s a big difference between the Republican and Democratic campaigns: The Republicans have split on policy grounds; the Democrats haven’t. There’s been a Republican divide between center and right, yet no Democratic divide between center and left. But when you think about it, the Democratic policy unity is a mirage. If the Democrats actually win the White House, the tensions would resurface with a vengeance. The first big rift would involve Iraq. Both Senators Hillary Clinton and Barack Obama have seductively hinted that they would withdraw almost all U.S. troops within 12 to 16 months. But if either of them actually did that, he or she would instantly make Iraq the consuming partisan fight of their presidency. Which brings us to second looming Democratic divide: domestic spending. Both campaigns now promise fiscal discipline, as well as ambitious new programs. These kinds of have-your-cake-and-eat-it-too vows were merely laughable last year when the federal deficit was running at a manageable $163 billion a year. This is the debate that Democrats have been quietly rearguing during the entire Bush presidency. The left wing of the party is absolutely committed to winning it this time. It will likely demand the clean energy subsidies and the education spending, the expensive health care coverage and subsides to address middle-class anxiety. But no Democratic president can afford to offend independent voters with runaway spending. No president can easily ignore the think tank establishment, which is rightfully exercised about the nation’s long-term fiscal health.

Major Policy Issues: Thinking About National Security All the major policy issues we're going to be facing in this election and dealing with for decades can, in our humble opinions, be grouped into three major categories: 1) Foreign Affairs, 2) Economics, 3) Social Policy. Some day we'll break those down into sub-topics and walk thru 'em but of now we'dlike to throw up the National Security sub-topic in FA and point to a selection of readings from StrategyPage.com that illustrate a bunch of stuff going on that never makes it to the MSM or general public discussion. Below you'll find selections on the War in the Heavens, the War in the (Cyber) Clouds and strategic posturings by Russia and China.

Obama-McCain Would Be a Matchup for the Ages John McCain is a solid favorite to win the Republican presidential nomination. Barack Obama is an ever-so-slight underdog on the Democratic side. Obama-McCain, however, would be a dream general-election matchup, the most defining American presidential race since at least 1980. Just think of the contrasts. More than any other Republican or Democrat, they appeal to independent-minded voters while still parting ways on crucial issues. On Iraq, taxes, health care and the Supreme Court, the differences between these two men are profound. McCain would want to focus a race on national security and terrorism, Obama on domestic concerns and economic insecurity. It would be change versus experience, the audacity of hope versus the faith of our fathers. As the 2006 episode suggests, there would be pettiness in any McCain-Obama contest; there is in every election. Both sides understandably would demonize the other -- the prospects of four more years of the dreaded Bush presidency and an endless quagmire in Iraq or an inexperienced and untested leader facing a dangerous world. Still, there may be the stuff of good and important dialogues. Perhaps they would even emulate the plan for the 1964 election, when another Arizona Republican senator, Barry Goldwater, was preparing to run against another young Democratic icon, President John F. Kennedy. They liked each other and, before Kennedy's Nov. 22, 1963, assassination, talked about engaging in extensive debates around the country, perhaps even flying around on the same plane.

Totally Spent WE’RE sliding into recession, or worse, and Washington is turning to the normal remedies for economic downturns. But the normal remedies are not likely to work this time, because this isn’t a normal downturn. The problem lies deeper. It is the culmination of three decades during which American consumers have spent beyond their means. That era is now coming to an end. Consumers have run out of ways to keep the spending binge going. The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power — and not just temporarily. Much of the current debate is irrelevant. Even with more tax breaks for business like accelerated depreciation, companies won’t invest in more factories or equipment when demand is dropping for products and services across the board, as it is now. And temporary fixes like a stimulus package that would give households a one-time cash infusion won’t get consumers back to the malls, because consumers know the assistance is temporary. The problems most consumers face are permanent, so they are likely to pocket the extra money instead of spending it. Another Fed rate cut might unfreeze credit markets and give consumers access to somewhat cheaper loans, but there’s no going back to the easy money of a few years ago. Lenders and borrowers have been badly burned, and the values of houses and other assets are dropping faster than interest rates can be lowered. The underlying problem has been building for decades.

Back To The Future The U.S. Army is publishing a new edition of its "how to fight" manual (Field Manual, or FM, 100-5). The 2008 edition puts nation building (as in Iraq and Afghanistan) on an equal level with conventional warfare. That's a major change. For nearly a century, FM 100-5 was revised every 5-10 years to reflect changes in technology, experience and perceived threats. The 1993 edition put more emphasis on peacekeeping, counter-insurgency and nation building. That has grown steadily over the last few editions. A trend, so to speak, that has reduced the emphasis on conventional warfare to parity with "operations other than war". The new 100-5 implies a need for more infantry, military police, civil affairs, engineer and intelligence units. This reflects the experience of the last seven years.  What the new FM 100-5 does is make it possible to establish many temporary changes as permanent modifications to army organization, tactics, training and equipment.

Culture and Science

What’s in a Beethoven Quartet? A Full Curriculum It is Distillate of Beethoven: 21 minutes of sharply compressed music that shows him in all his violent, tragic, angry, plaintive, contemplative guises. For four months it has haunted the halls of the Curtis Institute of Music, the elite conservatory here. In an unusual educational experiment Curtis has established Beethoven’s String Quartet No. 11 in F minor (Op. 95) as the touchstone of the academic year for its 160 students. Imagine a year of medical school revolving around the liver, or a car repair course centered on the Chrysler LeBaron. Written in 1810, the work is considered a culmination of Beethoven’s second period and looks forward to the late quartets “in its dominant qualities of conciseness, directness and instant confrontation of contrast,” the musicologist Joseph Kerman wrote in “The Beethoven Quartets.” It is called the “Quartetto Serioso,” a rare instance in which Beethoven himself bestowed a subtitle. “The F minor Quartet is not a pretty piece, but it is terribly strong — and perhaps rather terrible,” Mr. Kerman wrote. “Everything unessential falls victim, leaving a residue of extreme concentration, in dangerously high tension. But strength, not strain, is the commanding impression.” [NOTE:The online excerpts are wonderful music and if you’d like to hear what goes into learning to “make music” try this audio/visual session].

A Victory for Jazz, or Just Grammy Being Grammy? When something newsworthy or popular or positive happens to a jazz musician — a big award, say — many in the jazz world feel astonished for about four seconds, then quickly act very smug. You know: We’ve been sitting here patiently, full of our aesthetic virtue, so used to being ignored, and the world has finally come around to our point of view. Are we happy about it? More to the point, what took you so long? Are we entitled to feel that way about “River: The Joni Letters,” by Herbie Hancock, being named album of the year at the Grammys on Sunday ? We could, but it would be silly. Some of what “River” accomplishes as a jazz record is serious indeed. Mr. Hancock’s version of Duke Ellington’s “Solitude” is the modern jazz process itself: a complete reharmonization of a familiar song, with rhythm that keeps vanishing and reappearing. Wayne Shorter’s saxophone playing on many tracks, including his own “Nefertiti” and Ms. Mitchell’s “Edith and the Kingpin,” is casually brilliant — some kind of strange, subconscious vernacular. And though Ms. Mitchell has never called herself a jazz singer, her vocal performance on “The Tea Leaf Prophecy” has a rhythmic assurance that a lot of self-identifying jazz singers could use. It’s a cool-tempered album, almost drowsy. In so many ways it does seem a strange choice, not just in its modest commercial profile but in that it’s the first album to win this particular award for either Mr. Hancock or Ms. Mitchell. Yet it is also august and exquisitely acceptable: precisely the qualities that this category of the Grammy Awards tends to orient itself around.

Posted by dblwyo at 05:04 PM | Permalink | Comments (0)

Looking back over the immediate prior posts there's a bunch of political stuff and a bunch of policy stuff, particularly economics. All in all not surprising given the time of year. Instead of waiting for the weekend there was so much, and some of it key, that we broke it up as things went along and to call it out. In some ways the tide is now racing in Obama's direction instead of Hillary strolling to her coronation. In the process we're now finding out who she is and what she really wants to stand for. Contrawise we're finding out more about Obama's policy positions.

On the whole, and again we're not talking about normal folks here or even the best in your local neighborhood, these are all exceptional folks even though we talk about them like we were critiquing the local school board. But then again, that's the game. So, on the whole, the Hillary I'm seeing is pretty much the one I expected - brittle, hard, disciplined,hard-working, no vision and business as usual. More importantly our suspicions that she wants to be President not because she has things to get done but because she just wants the job is scary. I don't mind ambition as it takes some to get this job - but the shape of it is important.

On the other hand we're finding out more about Obama's policy positions, somewhat biased by what he think he needs to win. Amazing how the economy is moving center stage too, isn't it ? In his case we think it's clear he's going for the job more for what he can do with it than just for personal glory; if not he sure talks a good game. The last visionary communicator though was a lot less naive about the big bad world we live in. Barrack approaches this as if it were all a community organizer's problem where patience, good communication skills, seeing the other as people and turing the other cheek will eventually get you want can be gotten. The last President who had to really go thru the big bad world learning experience to this extent brought us Afghanistan, the Iranian revolution (literally) and the foundations for much of the mess in the ME today. Bottomline it looks like Barrack could stand a lot more seasoning.

So how much seasoning is enough - with Mitt doing the 2nd 'great thing' of his campaign and endorsing McCain John-boy is beginning to look like the Man. Though he's getting a bigger and bigger pushback on the far right. He's certainly not naive about international affairs nor inexperienced. His grasp of economics is still pretty unclear, even by the standards of political campaigns though.

This is beginning to shape up as a classic dilemma - or should we say trilemma ? Republicans strong on foreign affairs and national security, middlin fair on economics and, this is progress, o.k. on domestic policy. McCain certainly has recognized the need for serious efforts in, for example, education. Contrawise the Dems are looking more thoughtful on on Social Policy - particularly Healthcare, middlin fair but the other side of the coin on economics and dangerously weak on foreign affairs and national security. We repeat dangeoursly weak. On the character, integrity and leadership thing it's nearly impossible to comment on McCain. This is the same guy who turned down repatriation from a North Vietnamese prison camp in the name of honor and he's lived his public career that way. Sorry to say Hillary's track record seems equally clear except the bottomline for her appears to be any expedient choice to win no matter who gets hurt or what princples get twisted and broken. Barrack is hard to judge - great vision, his notion that all sides have a public responsiblity to bring their positions into the public square and defend them and adhere to the results we think is a bedrock American principle which he expresses as well as anyone. At the same time he hasn't been thru the fires - I'd be happier to break him and see what we get back. My friends used to call this the 60 lb pack test. Take your girlfriend camping - if the real her was somebody you could still get along with after a heavy pack and a steep trail well...

So there you have it - policy dilemmas and character dilemmas. Choice will depend on weights and evaluations. Not sure mine are in yet but let met trial balloon them:

Policy Weights: Foreign Affairs (50-60%), Economics (30%), Social Policy (20%).

Leadership: Vision (20%), Communication (20%), Character(30%), Integrity (20%). (Character means Values and not family life styles either but what the Romans meant by it).

Balance: Leadership (60%), Policy (40%). In other words I'd rather have somebody who'd stand for the right things, be smart enough to figure them out, adapt to circumstances and who's word is good than somebody with a bunch of brilliant wonkograms that probably aren't worth the paper they're printed on.

And your choices ?

Prior Posts: Fights, Disses and Issues: Onward to Camelot ? This one is worth going back to 'cause it builds on the introducotry thems, sets up the readings that follow and has David Brooks fantastic discussion of the key policy issues and how the candidates might have to handle them. Perfect fit.

Political Readings

Obama Sweeps Three Democratic State Contests; Huckabee Challenges McCain Barack Obama swept Democratic contests in three states yesterday, gaining an edge on Hillary Clinton in their seesaw battle for the party's presidential nomination. There are six more primaries and caucuses in the next 10 days. Obama won Louisiana's Democratic primary with 57 percent of the vote and bested Clinton in the Washington and Nebraska caucuses by a 2-1 margin. Arizona Senator John McCain's drive to seal up the Republican nomination was slowed by Mike Huckabee's victories in Kansas and Louisiana. McCain prevailed in Washington, according to an Associated Press projection, with 26 percent of the vote, followed closely by Huckabee and Texas Representative Ron Paul. The three states voting yesterday had 158 delegates to the Democratic National Convention at stake, with the biggest portion coming from Washington, with 78. They are awarded proportionally based on vote totals statewide and in congressional districts. Obama also won three pledged delegates available in territorial caucuses in the U.S. Virgin Islands.

·         Clinton Picks New Campaign Manager After Losing Three Contests to Obama Democratic presidential candidate Hillary Clinton replaced campaign manager Patti Solis Doyle with another longtime adviser a day after losing three contests for the Democratic presidential nomination to Barack Obama. Solis Doyle, who has run Clinton's campaign since she entered the race in January 2007, will remain as a senior adviser. In a note to the staff today, Solis Doyle said she was stepping aside as Maggie Williams takes over and cited the strain of the extended fight for the nomination. ``This has already been the longest presidential campaign in the history of our nation, and one that has required enormous sacrifices from all of us and our families,'' Solis Doyle said

·         Obama Poised to Sweep Into Lead Over Clinton in Democratic Contest Today

But could he deliver? THIS has been an extraordinary week for the man who could become America's first black president. Barack Obama has now won all eight of the primaries and caucuses held since Super Tuesday on February 5th, which ended, more or less, in a dead heat with Hillary Clinton. He has won by much larger margins than most people expected, trouncing his rival not just in heavily black states, such as Louisiana, but in ones that are almost completely white, such as Maine. Whatever happens, Mr Obama is already that rare thing—a political phenomenon. It is not just that he has managed to survive the Clintons' crude onslaught with grace. He has persuaded huge numbers of people around the world to reconsider politics in an optimistic way. To many Americans, a black man who eschews both racial politics and the conservative-liberal divide is a chance to heal the country's two deepest divisions. To many foreigners, he represents an idealistic version of America—the hope of a more benevolent superpower. Why should independent voters, who have often backed Mr McCain in the past, turn to the less proven man? Anyone can get experts to produce policy papers. The trick is to forge consensus to get those policies enacted. But what policies exactly? Mr Obama's voting record in the Senate is one of the most left-wing of any Democrat. Even if he never voted for the Iraq war, his policy for dealing with that country now seems to amount to little more than pulling out quickly, convening a peace conference, inviting the Iranians and the Syrians along and hoping for the best. On the economy, his plans are more thought out, but he often tells people only that they deserve more money and more opportunities. If one lesson from the wasted Bush years is that needless division is bad, another is that incompetence is perhaps even worse. A man who has never run any public body of any note is a risk, even if his campaign has been a model of discipline.

Obama Drive Gets Inspiration From No Ordinary White Woman Born in Kansas  Barack Obama's mother was most at home a world away from her Midwest roots, trekking the old Silk Road or arranging small loans for weavers in Indonesia. Dunham was born in 1942 in the American heartland and spent her teen years near Seattle. In 1960, she began college in Honolulu at a time when a multicultural student body, Hawaii's recent statehood, a burgeoning civil-rights movement and, soon, the looming Vietnam War made for a heady atmosphere on campus. In 1986, Dunham did a one-year development project in Pakistan. That year, mother and daughter took a two-week journey along the old Silk Route to China. Dunham's work for the Agricultural Development Bank of Pakistan was followed by stints at People's Bank of Indonesia and Women's World Banking in New York. She also did consulting work for the World Bank and USAID. ``She was getting to pretty high-powered positions, working in world organizations as an expert, but she always liked the people at the bottom,'' says Dewey, the granddaughter of the philosopher John Dewey.

Clinton, Iron Lady, Needs Another Game Plan: The task for the Clintons after a shocking third-place finish in last month's Iowa caucuses was formidable: Convince the country that the guy they had fallen in love with was wrong for them. Clinton saw the New Hampshire result as her political resurrection, where she finally found her ``voice.'' But if the voice was different, the message was the same. Her Lazarus-like win kept her from looking any further into why she lost so badly in Iowa. It put off any move to change her insular staff and validated her original strategy in which the primaries were a mere formality. Voters would coronate her partly because she had been first lady, because she was a Clinton, and because it was her turn after all she had been through. It wasn't as much a matter of competing as it was waiting until Super Tuesday to accept the crown. Now the days ahead look darker than they did on that flight from Des Moines to Manchester. On Feb. 12, Clinton was whomped in Virginia (64 percent to 35 percent), Maryland (60-37) and Washington, D.C. (75-24). Obama has now won 23 of their 35 contests. She has an explanation for why each of Obama's victories is inferior to hers.

Sexual Politics Enlighten the Hedge-Fund Trader: Michael Lewis There comes a time in the life of every successful hedge-fund manager when he realizes that his political opinions are seriously undervalued. That was the moment I realized that I might be the one man left in America willing to come out and say what every other man was just thinking. And so for the past two weeks, as a kind of public service, I've paid closer attention to our presidential campaign, so that I might share my views of it with you. I now have two of them. Opinion No. 1: Before this thing is over, every straight male in America is going to realize that if Hillary Clinton wins he's looking at years of sexual famine. The American Female's lack of humor about anything regarding Hillary Clinton has a momentum all its own, with the women inching their backs ever closer up against the wall and the men growing ever more certain that this Clinton woman is a serious problem. It reminds me of a stock market crash, without a natural bottom. Which brings me to my second point: the so-called issues of these campaigns are overrated. The only two subjects that mean anything in politics, as in life, are sex and money.

Romney Backs McCain as Republican Nominee, Asks Delegates to Support Him Mitt Romney endorsed former rival John McCain for the Republican Party's presidential nomination and asked his delegates to throw their support behind him. Romney's action will move McCain close to amassing the 1,191 delegates needed to secure the nomination nine months before the November presidential election, giving the Arizona senator the chance to focus on campaigning against the Democratic contenders.

Posted by dblwyo at 06:39 PM | Permalink | Comments (0)

All the major policy issues we're going to be facing in this election and dealing with for decades can, in our humble opinions, be grouped into three major categories: 1) Foreign Affairs, 2) Economics, 3) Social Policy. Some day we'll break those down into sub-topics and walk thru 'em but of now we'dlike to throw up the National Security sub-topic in FA and point to a selection of readings from StrategyPage.com that illustrate a bunch of stuff going on that never makes it to the MSM or general public discussion. Below you'll find selections on the War in the Heavens, the War in the (Cyber) Clouds and strategic posturings by Russia and China.

Now let's be careful here as well. In NO case are we arguing that these facts swamp the bigger picture of needing to have a coherent foreign policy driven by national interest that emphasis a stable world order, peaceful progress and a balance between military efforts & capabilities, diplomacy and more proactive engagment with the world. In fact neither Russia nor China are significant threats for the foreseeable futures. In fact the policies they are pursuing make perfect sense in their own contexts.

Rather we're arguing that we need to understand those contexts and fit them into our own strategies, vision and framework. When Bill Clinton took office, unlike any of his predecessors he thought he could ignore foreign policy and did. Only with genocide in the Balkans did he learn there was a reason that historically President's spend 50% of their time and energy on FA, in the good times. In the bad well....

BtW the best example of a comprehensive and integrated framework on Foreign Policy that recognizes the world as it is, and our policy as it should be is/was Rudy Giuliani's. Which is ably summarized and introduced by Austen Bey on StrategyPage and reflected in an interesting series of columns which we highly recommend (A Diplomacy of Neighborhoods  ,War and Peace With Cultural Anthropologists, and G's piece: A Revolution In Diplomatic Affairs).

For a general view before we get our own up try his essay: Goodwill and Armed Vigilance 

Now for a perfect compare and contrast between seeing the world as it is and as many would like to pretend it is (we'd point to the French or the Germans of course but that wouldn't be true. What they pretended was what they wanted us to do while they went on with their own ruthless Realpolitik. The French for example have had a decades long activist intervention program in Africa where the French Foreign Legion has been active. And the Foreign Legion can, on occaision, still make the USMC look like a bunch of Boy Scouts) are the first two articles. The US has announced it's shooting down one of its' own satellites to prevent environmental damage. Well actually that's true but only a small part. What we've really got going on is a highly secret spy sat who's working shouldn't fall into other hands. And a perfect chance to demonstrate the extremely sophisticated anti-satellite capabilities deveoped by the USN. Which, in turn, is important because the Chinse need a multiple order of magnitude improvement in their command of the shipping lanes but can't get it short of a multi-decade, multi-$T effort at building a major regional blue-water Navy. An alternative is interditing USN effectiveness which depends on satcom so last year they demonstrated a capability to shoot down satellites. And the NYT was wondering why (though not StrategyPage !). The really fun and odd thing here is that the Chinese are utterly dependent on the USN for protecting the sea lanes for their energy supplies and will be for decades. What a funny world we live in, eh ?

War in the Heavens

U.S. to Try to Shoot Down Satellite The Pentagon will in coming days try to shoot down a malfunctioning U.S. spy satellite carrying a potentially lethal type of toxic fuel, a move likely to spark new international concerns about the militarization of space. President Bush ordered the military to devise a method for destroying the satellite after growing concerned it might otherwise crash in a populated area and release large quantities of hydrazine, a gas that burns the lungs when inhaled and can be deadly. Pentagon officials said a Navy ship in the Pacific Ocean will fire a missile at the satellite shortly before it re-enters the Earth's atmosphere and attempt to knock it into the water, the first such shoot-down ever attempted by the U.S. military. The officials declined to say where the intercept will take place or where the wreckage is likely to land. Although the scenario seems like a Hollywood plot, Pentagon officials said the satellite -- which stopped working almost immediately after reaching orbit in December 2006 -- poses real safety risks.

SPACE: Ships That Sink Satellites A U.S. spy satellite is falling out of its orbit in an uncontrollable fashion, and is due to land on earth, somewhere, during the first week of March. The U.S. Navy has offered to blast the satellite apart, with some of its anti-satellite missiles. These are launched from a warships equipped with the AEGIS anti-missile systems. Normally, worn out spy satellites, use the last of their fuel to "deorbit" to a particular location (like deep water areas of the Atlantic or Pacific). These big (up to 15 tons) birds don't completely burn up when they return to earth, and could do some serious damage if they hit anything. But what worries U.S. intel officials the most is that, whatever pieces do survive the plunge to earth, could reveal valuable secrets of how the U.S. spy satellites series birds work, or because some of the fuel carried in the satellite will contaminate the atmosphere, or because the U.S. Navy wants to show off its Aegis anti-missiles system. Take your pick. But the target for this mission appears to be a different type of bird, because KH-11 and Lacrosse satellites weigh 14-16 tons. The target for the navy missiles weighs 2.5 tons, and is some kind of secret design, on a secret mission. So far, the Aegis system has knocked down 85 percent of the missiles fired towards it.

USAF Wants A Blank Check For Defense The U.S. Air Force is asking Congress for more money to defend U.S. military satellites from potential attack. This is largely in response to the Chinese test of an anti-satellite satellite last year.

War in the (Cyber) Clouds

Cyber War As The Ultimate Weapon There hasn't been a proper, all-out Cyber War yet. There have been lots of skirmishes, but nothing approaching what an all out battle, via the Internet, would be. What would the first Cyber War be like? Let's be blunt, no one really knows. But based on the cyber weapons that are known to exist, and the ones that are theoretically possible, one can come up with a rough idea. First, there are obviously three kinds of Cyber War possible. Right now, we have limited stealth operations (LSO), as Chinese, Russian, and others, use Cyber War techniques to support espionage efforts. China is the biggest practitioner, or at least they have been caught most often.

The Chinese Three-Headed Monster Ten years ago, the Chinese Defense Ministry established the "NET Force." This was initially a research organization, which was to measure China's vulnerability to attacks via the Internet. Soon this led to examining the vulnerability of other countries, especially the United States, Japan and South Korea (all nations that were heavy Internet users). NET Force has continued to grow. NET Force was soon joined by an irregular civilian militia; the "Red Hackers Union" (RHU). These are several hundred thousand patriotic Chinese programmers and Internet engineers who wished to assist the motherland, and put the hurt, via the Internet, on those who threaten or insult China. The RHU began spontaneously, but the government has assumed some control, without turning the voluntary organization into another bureaucracy. Starting in the late 1990s, China  assembled what has now become 30,000 Ministry of Public Security employees  manning the Golden Shield Project (also known as The Great Firewall of China), and monitor Internet use throughout the country. In the last decade, over a billion dollars has been spent on this effort. China Counterfeit Surprise

Web Vandals Impress the CIA The CIA has revealed that in several foreign countries, criminals have used Internet hacking to take control of power transmission facilities and used this power (to turn the lights out) to extort money from the power companies. It's interesting that the CIA did not name the countries or the power companies, or provide other details. An urban myth is suspected.   The CIA revelations were made in order to speed up U.S. efforts to make American utility companies more resistant to this kind of extortion. Cyber criminals have actually been using similar extortion scams for several years now. The most public examples have been commercial web operations that were threatened with being shut down, or damaged by a penetration of the web site defenses. Many companies have increased their Internet defenses, but the criminals keep coming up with new forms of attack. The criminals operate from countries where the local police are unable, or unwilling, to help crack down on such crimes. The extorted money is transmitted to accounts in such countries, and then on to several more accounts, making it very difficult to track down.

Russia the Evil Hacker Haven The most powerful Internet weapon on the planet is being protected by the Russian government. The weapon in question is the Storm botnet. This is the largest botnet ever seen, and while the United States has traced its creators to Russia, the government there refuses to cooperate in shutting Storm down. The Storm network is believed capable to shutting down any military or commercial site on the planet, or do some major damage in ways that have not yet been experienced. There's never been anything quite like Storm.  The Storm computer virus had been spreading since early last year, grabbing control of PCs around the world. Storm infected millions of  computers with a secret program that turned those PCs into unwilling slaves (or "zombies") of those controlling this network (or botnet) of computers. Many of you may have noticed spam directing you to look at an online greeting card, or accompanied by pdf files, or directing you to a site with pictures of a huge storm that hit Europe a year ago (thus the name). That was Storm, the largest single spam campaign ever. Early on, it was  believed that Storm was owned by a Russian criminal syndicate, but once more detailed proof was available, the Russian government refused to cooperate, treating Storm like some kind of secret military resources. And to the Russians, that's apparently what Storm is. Meanwhile, the investigation indicates that the Storm crew have some American members, and now the search is on for them, or any other non-Russians who worked on Storm, and are not inside Russia.

The Greatest Story Never Told But the biggest news on the Cyber War front is that it rarely makes the headlines. It's not that Cyber War isn't important, it's just that all this geek stuff is hard to explain and just does not sound that scary. In the competitive news business, Cyber War is not good news. But to the intel and security people, the U.S. has been under heavy assault for several years now. The losses of information have been huge, and it's not certain just how much has been stolen. All this will be big news in a decade or so when more details emerge about the extent of the losses. But for now, it's just one of those stories no one could wrap their heads around. In the middle of all this you have military users of exploits. These are the shadowy organizations, particularly in China and the United States, where exploits are stockpiled (and soon replaced as the exploit is rendered ineffective via a software patch) for use in wartime. China, and probably the United States, are already using their exploits arsenals for espionage, and counter-espionage. Many criminal gangs also do contract work, usually for espionage operations. Some corporations have been caught doing this as well. Only small players have been caught so far. Any large corporation going this way would put a premium on not getting caught. Chinese firms are particularly energetic in stealing technology, and producing their own versions. They are often quite blatant about it, especially if it's military technology (which means government protection from retribution.) The Russians are trying to force the Chinese government to crack down on this, without much success so far. The United States, and many other Western nations, are also going after China for the use of Internet based espionage. Again, so far, the Chinese are refusing to admit to it, much less slack off. Western Cyber War experts are urging some retaliation in kind. That could get interesting.

USAF Creates Cyber War Central The U.S. Air Force is building a Cyber Control System. This would e a hardware and software system that would enable the Air Force Cyberspace Command to monitor, in real time, the security state of all air force networks. If any of these networks were attacked, the Cyber Control System software would immediately alert Cyberspace Command controllers, and recommend a course of action. Think of this as a war room for Cyber War. Many people, deluged with TV and movie representations of high tech military command centers, believe such a Cyber War center already exists. It doesn't, and the air force is building it. If the Cyber Control System can prove itself, the air force hopes to run the show for all Department of Defense networks.

Posturings, Positionings, and Maneuvers

STRATEGIC WEAPONS: Russian Missiles Aimed at Ukraine Russia threatened that, if Ukraine joined NATO, and allowed parts of a U.S. missile defense system to be built in Ukraine, Russia would aim some of its ICBMs at Ukraine. The Russians are serious about this. There are numerous reasons why. Many Russians are still upset about how they lost the Cold War, and are no longer a superpower. The current crop of Russian leaders have been playing the nationalism card heavily. This includes making a lot of noise about NATO, and Cold War archenemy the United States,  plotting to surround Russia and destroy it. Westerners are perplexed at all this, but the nations of East Europe are not. These nations were tightly controlled by the Soviet Union from 1945 to 1989, and fear that the Russians are really serious about reestablishing that control, in order to provide a "buffer" against another invasion by some West European nation, or the Americans. East European nations want to join NATO in order to obtain more protection from Russia aggression. The Russians dismiss this as nonsense. Russia has been vague about exactly who they are aiming their ICBMs at these days. The U.S. missile defense system is to protect Europe from nuclear missiles launched from the Middle East, most likely Iran (in another 5-10 years.) The Russians believe that this is just a cover story, and that the U.S. has another agenda that is not entirely clear just yet.

Ignore the Present and Reinforce the Future In the last 30 years, China's GDP has become ten times larger. During that period, the Chinese armed forces actually shrank, in terms of troops, and didn't increase its combat power in the same proportion. China has bought many new weapons in the last thirty years, in relatively small quantities. Yet China is still largely a force equipped with weapons and equipment several decades behind what the United States possesses. What China is doing is creating the ability to develop and manufacture a wide range of weapons and equipment in the future. Such a capability requires skills and industries that only advanced industrial economies possess. This includes the development and manufacturing of jet engines, nuclear submarines, microelectronics, space satellites and the like. Officially, the U.S. expresses shock, surprise and uncertainty at what China is doing with its armed forces. But in fact, the Chinese are not building new weapons in large quantities, with the exception of short range ballistic missiles (aimed at Taiwan). However, China is building a capability to, within a few years, manufacture large quantities of new weapons based on newly developed technologies. Thus China is investing heavily in the ability to become a military superpower, but it has not yet used that capability, and may never do so. Long term, the Chinese strategy is far more likely to make China a formidable military power in the future, than if China simply tried to update all the weapons and equipment they currently have, and continue doing so. China is not trying to become a military superpower now, but is laying the groundwork to do so in the future, if it believes it needs to.

Murphy's Law: The Chinese Dilemma China recently held military exercises off its southeast coast. They included naval, air and ground forces. Despite the fearsome appearance of all this, China isn't looking for a fight . But they do have armed neighbors who might want one (Vietnam, a reunited Korea, Japan, even Russia), and there's always Taiwan, which is really the only point of dispute with the U.S. China knows it's the biggest nation in the region, with lots of dormant disputes with powerful neighbors. And for most of the last two centuries, China has been unable to defend itself effectively. Even their nuclear weapons are more of a bargaining chip than an effective defense. Until quite recently, the basic Chinese military defense was a massive guerilla war, which would cede large portions of the country to any invader. From China's point of view, their military buildup is long overdue, and way behind schedule. Most Chinese are perplexed at foreign anxiety over growing Chinese military power.

Posted by dblwyo at 12:23 AM | Permalink | Comments (0)

Back in the saddle again - here we go once more in harm's way (alt. version). On my other blog just posted a plug for a friends blog and it turned into a long riff on macroecon, business cycles and why it matters (can you spell social collapse). Given that all our choices are conditioned by the state of the economy, that most of the issues facing us in this election have their roots in policy failures reaching back to the '60s and our prosperity in the '90s was the other side of the coin you might be interested. The excerpt and link are below the line.

Giving ourselves a break today and taking care of chores and errands we had lunch at our favorite little local family resteraunt where business wasn't as good as it might be. Partly because of the weather, partly because of the snowbirds who're south right now but largely because of the impacts of energy, et.al. on people's spending money. In two hours we had the same conversation at the tobbaconist, the video store, the barber AND the wine shop !

If you don't think the next President is going to be faced with a major economics challenge which is, now, inescapably painful for all of us then you are sadly mistaken.

And there's, on the one hand, an enormous amount of terminal unsinn running around and placebo marketing to go with it. Otherwise known among wannabe Hawaiians as kuki moi, or bat guano to the rest of us. For example Robert Reich has a recent NYT editorial that correctly diagnoses the severity of the problem but is mis-leadingly disingenuous in it's recommendations. Partly because he recommends short-term fixes for structural problems that have been accumulating for decades (as he does correctly point out). Mostly because his income re-distribution placebos are feel good policy entrapaneur nonsense and don't address the structural problems he starts with.

If you want to read a set of policy recommendations by somebody who is actually an economist and a darn good one at that try Larry Summer's short, pithy and to-the-point Fortune/CNN interview. Now that's dead on target. Given that Obama(Obama unveils $210B econ plan) and Clinton(Clinton Cites Her Economic Credentials, Attacks Obama, both came up with major policy initiatives we'd suggest taking a look there and below. And then thinking it thru.

Let me put that another way - this really....really...really matters to you and yours.(Obama, Clinton Seek to Gain Edge on Economic Issues)

The good news, while I'm ranting away here, is that things are enormously better than they were in the '60s,'70s and '80s for sound advisors and advice (we're talking moving from a 1 to a 5 on a 1-10 scale here, maybe counting what Volcker, Greenspan and Bernanke have done a 7/8). Considering historical examples it doesn't take much to go the other way.

Economics is the world's largest experimental science because it gets to play with whole societies. If you don't believe me look at the collapse of Zimbabwe for stupdities we know better than. Or what Chavez is doing in Venezeula. Better yet look at what China has done for it's people and eventually India. All by moving big...big steps in the right direction.

Believe that water runs uphill all you want or that the tides can be turned back but don't be too surprised or upset when the backwash turns out to be worse than avoiding the original problem. Of course your kids and grandkids inherit most of that so...

Social Notes: Be Your Own Economist and Related Readings

Presumably if you're visiting this site you've got some concern with the direction of the world, particularly the direction of the economy, markets and buisness ? Mike's book is as good an introduction to the data sources (which are largely on-line now) and how they're reported in the WSJ as anything ever written IMHO. His old web site (I understand a new one is under construction is BeYourOwnEconomist.com ) as well as his blog carry pointers and guidelines to the data sources. More important is it'll provide you a guide to understanding the business cycle and how the data fits each part. And beneath that how it should look - or conversely what it means. His blog does a nice job of taking a macro-issue and working thru clearly, cleanly and directly using some nice, relatively simple charts.

Posted by dblwyo at 11:43 PM | Permalink | Comments (0)

Well it looks like we're sorting down to the candidates and the issues. And the fight is getting pretty serious. On the Democratic side Obama has some major wins in recent primaries but the real test will be in Texas and Ohio. Similarly McCain is winning primaries as well and, if you believe the headlines, pulling away. As usual when you look under the covers there's more to the numbers and Huckabee is staying in the fight.

What we're seeing in both contests is rather what one would expect from our model of voter distribution - that is the electorate is looking for a centrist, pragmatic candidate while the Faithful on either side are holding out for their respective agendii. NOW in our humble opinion that's the real issue in this campaign. Will we continue to see a politics based on the relative extremes or will we have a campaign that addresses the real issues we face. Which are more challenging than anything we've seen since 1980.

On the Democratic side, and this how the Dems turn themselves into the Dimowacks (or Dims for short) the fighting is getting ugly. Paul Krugman has a nice column this week which is excerpted below. Paul has a bit of a bias (ask us sometime about the stories regarding Paul's early disappointments with not getting a post in the first Clinton administration). The other side of the argument is that is serious business and we need serious people. So let's find out who you are, what you stand for and what you mean to do. A question that is still very unclear in our minds with regard to the Billary and Barrack.

On the other hand we're starting to get to the point where positioning and posturing need to move on to serious debates about those serious issues. David Brook's recent column analyzing how the key issues might play out is as good a piece of work as we've seen. Both are excerpted below but we strongly urge you to read his whole column. But with our usual tongue-firmly-in-cheek approach we'll leave the last word to Kiptin Kirk and Monty Python. But any second thoughts ? After all Camelot is a pretty silly place.

When Reality Bites There’s a big difference between the Republican and Democratic campaigns: The Republicans have split on policy grounds; the Democrats haven’t. There’s been a Republican divide between center and right, yet no Democratic divide between center and left. But when you think about it, the Democratic policy unity is a mirage. If the Democrats actually win the White House, the tensions would resurface with a vengeance. The first big rift would involve Iraq. Both Senators Hillary Clinton and Barack Obama have seductively hinted that they would withdraw almost all U.S. troops within 12 to 16 months. But if either of them actually did that, he or she would instantly make Iraq the consuming partisan fight of their presidency. Which brings us to second looming Democratic divide: domestic spending. Both campaigns now promise fiscal discipline, as well as ambitious new programs. These kinds of have-your-cake-and-eat-it-too vows were merely laughable last year when the federal deficit was running at a manageable $163 billion a year. This is the debate that Democrats have been quietly rearguing during the entire Bush presidency. The left wing of the party is absolutely committed to winning it this time. It will likely demand the clean energy subsidies and the education spending, the expensive health care coverage and subsides to address middle-class anxiety. But no Democratic president can afford to offend independent voters with runaway spending. No president can easily ignore the think tank establishment, which is rightfully exercised about the nation’s long-term fiscal health.

Hate Springs Eternal The bitterness of the fight for the Democratic nomination is, on the face of it, bizarre. Both candidates still standing are smart and appealing. Both have progressive agendas (although I believe that Hillary Clinton is more serious about achieving universal health care, and that Barack Obama has staked out positions that will undermine his own efforts). Both have broad support among the party’s grass roots and are favorably viewed by Democratic voters. Supporters of each candidate should have no trouble rallying behind the other if he or she gets the nod. Why, then, is there so much venom out there? I won’t try for fake evenhandedness here: most of the venom I see is coming from supporters of Mr. Obama, who want their hero or nobody. I’m not the first to point out that the Obama campaign seems dangerously close to becoming a cult of personality. We’ve already had that from the Bush administration — remember Operation Flight Suit? We really don’t want to go there again.

And here are two just really excellent posts from Josh "BigJ" Moore on outcomes and tactics. For a big, dumb jock he's doing a pretty astute job. Actually he's doing a pretty good job period or we wouldn't post these: 

Obama Sweeps Hillary, Builds Bridge To Nowhere?

Obama takes Maryland, VA, & D.C. for 10th Straight...

Posted by dblwyo at 09:57 AM | Permalink | Comments (1)

One of my e-friends has suggested that, from time-to-time, that if I insist on babbling away about economics, the Economy and the rapidly metastizing crisis that it would be helpful to put it more clearly and simply. While it's not entirely clear that such is within my circle of competencies fortunately there are alternative. Especially altnerative sources.

He also mentioned not making my posts so long and detailed - which is another little thing to be worked on at some future date. But in pursuit of both objectives we've found three excellent vid clips that put the current economic problems simply, clearly and in some Nuts Shells.

We'll start with this little gem from Jon Stewart and CNN's financial editor who basically encapsulate the whole thing:

Now for an even simpler perspective we give you Elton John, indirectly anyway, with this rendition of Benny and the Feds:

 And finally the piece de resistance' the best explantion of how the Investment Bankers got themselves and us into this mess we've heard. This one you really...really have to watch - if nothing else for the wonderfully pointed, dry British humor.

 And, oh yeah, underneath all the humor in this last one they actually get it exactly right. Only it's not just loaning money for houses to people who can't afford them. Other bankers did the same thing for companies that can't pay back their loans either.

We hope this was helpful and a small step in the right direction. Enjoy !!  

Posted by dblwyo at 07:12 PM | Permalink | Comments (0)

Continuing our Readfest postings we'll focus on the sudden emergence of concerns with Afghanistan and NATO's extremely poor performance with its' commitments there. In a nutshell the European militaries have failed most of the obligations they assummed post-911. They've failed because they lack the infrastructure of transportation, intelligence and logistics. Another problem has been that as a result of drastic cutbacks in troop levels as well as using their military forces as not-so-disguised jobs programs instead of focusing on national security they also don't have enough troops qualified to serve in either a combat or nation-building role. Finally many of these countries lack the domestic political support necessary to assume a combat role; i.e. meet their commitments.

This is not, however, a new problem at all. In fact StrategyPage has been following the short-comings for several years now. What makes it interesting is that the issue has moved front-burner in international discussion - literally years after the problem was obvious on the ground. But even on that scale this isn't a new problem as is illustrated by Halbertam's "War in a Time of Peace". If you don't recall the Balkans exploded into ethnic violence but Europe told the US to keep hands off because they would handle it. Which they proved completely unable to do and, after years of ethnic cleansing and the loss of millions of lifes in events as bad as anything that happened in Cambodia; albeit on a smaller scale.

While Europe has enjoyed a historically unprecented period of peace since the end of WW2 there are two things, the dirty little secrets if you will, that made that possible. First, was the massive presence of US forces who's hidden purpose was to keep the French and Germans apart and give a certain level of comfort that the Germans wouldn't return to their roots. The 2nd, partly true during the Cold War and much more so after it's end, is that it was/is/will be massive US worldwide military presence that provides the underpinnings of the international systems and has allowed all the posturing. (As a sidebar bear in mind that it's the USN whose protection of the sea-lanes from the ME to the Far East which allows all that oil to be moved to Japan, China, India, et.al. A service which everybody takes for granted and is in our self-interest but nonetheless....)

So the bottomline here is that Europe can't backup it's claims to influence or backup its' policies. Consider what happened last year when the notion of putting UN sponsored European troops on the ground in Lebanon was the "answer" to the collapse of the Lebanese state and the continued rise to power of Hezbollah. Unfortuntely nobody had the capabilities despite all the rhetoric. Until Europe develops these capabilities it's abilities will be severely constrained. 

And Europe's role in the emerging new world will be severely constrained until they are willing to step up and be positive contributors.

NATO Stumbles Into The Future NATO released its annual report on defense expenditures. Nothing much has changed. Most NATO members spend about 1.5 percent of GDP on defense. At the high end we have the U.S., which spends four percent. Several nations spend more than two percent. These include France (2.4 percent), Bulgaria (2.3), Greece (2.8), Turkey (2.7) and  Britain (2.3). Greece and Turkey have high spending because they have not yet completely gotten over a war they fought with each other 90 years ago. French and British spending is high because these two nations have nuclear weapons and still maintain strategic intervention forces that can be deployed around the world. Bulgarian spending is still high for traditional reasons (it's in a rough neighborhood) and because the troops are often deployed on peacekeeping missions throughout the world. Bulgaria is also eliminating conscription, which will mean all the troops will require a raise, in order to remain competitive with the civilian job market. Most NATO nations cut their defense spending (as a percentage of GDP), by 30-40 percent after the Cold War ended. These nations also reorganized their forces, putting more emphasis on providing jobs for their citizens, and less on maintaining military capability. As a result, combat capability of most NATO nations has fallen by more than half since the end of the Cold War. Now that peacekeeping has become popular, many NATO nations are struggling with the need to spend more on the troops, before sending them off on these humanitarian missions.

• Nato must find a fix in Afghanistan It is time for all Nato leaders to make good on pledges to Afghanistan and provide troops with minimal restrictions so they can be deployed where needed.
• Where the sniping has to stop MIGHT Afghanistan’s “forgotten war” yet defeat the most successful military alliance in history? Last year saw NATO-led troops engage in their deadliest fighting yet in support of the government of Hamid Karzai. The winter snows that blanket Afghanistan’s mountains have for now quietened the frontlines. But roadside bombings and suicide attacks—tactics the Taliban have picked up with increasingly lethal effect from al-Qaeda operatives in Iraq—still take their toll among Western forces and ordinary Afghans. Yet it is not the spectre of military defeat that haunts NATO. It is a failure of political will. This week, as alliance defence ministers gathered in Vilnius, and Condoleezza Rice, America’s secretary of state, and David Miliband, Britain’s foreign secretary, dropped by unannounced in Afghanistan, all could agree that the job of stabilising the country needs more troops and a better co-ordinated reconstruction effort. But the political sniping over who should be doing what has reached an intensity that only the Taliban can celebrate.

Gates Says NATO at Stake In Afghan Mission Debate Survival of the North Atlantic Treaty Organization alliance, a cornerstone of U.S. security policy for six decades, is at stake in the debate over how the U.S. and Europe should share the burden of fighting Islamic extremism in Afghanistan, U.S. Defense Secretary Robert Gates said Sunday. "We must not -- we cannot -- become a two-tiered alliance of those willing to fight and those who are not," Mr. Gates told the Munich Conference on Security Policy, where Afghanistan was a central topic. "Such a development, with all its implications for collective security, would effectively destroy the alliance." Washington has had innumerable disputes with its NATO allies in the 59 years since the alliance was founded as a bulwark against the former Soviet Union. But today's debate over the importance of the mission in Afghanistan and how to accomplish it was portrayed by Mr. Gates as among the most difficult ever.A central theme of Mr. Gates's speech was his assertion that al Qaeda extremists, either in Afghanistan or elsewhere, pose a greater threat to Europe than many Europeans realize.

Posted by dblwyo at 10:05 AM | Permalink | Comments (0)

Over the course of the week we put up a bunch of politically related posts - some serious and some humorous. They're all linked/excerpted below where appropriate. As would be natural there's a bunch of other stuff besides all the primary results you should skim over. Though the results of the primaries are pretty well captured in the In-Trade political markets which show the odds of Clinton, Obama and McCain winning after last week. Pretty startling changes, eh ? There was so much stuff that not only do we have this seperate post but we split it into deep changes and stuff on the candidates.

And call out an interview with Mario Cuomo to start with because, for our taste, he outlines some of the practical realities of moving from the poetry of campaigning to the practical prose of actually getting something done. His views are complemented by our earlier post that takes a pretty deep dive on the structure of the American electorate. A post that provides machinery for you to use in explaining a lof of the rest of what goes on. With that machinery in mind the two other posts in that section talk about a change to re-align politics in the US (which in our model would mean returning to a more centrist politics) by a Brit columnist of all people. And another on CA. as the future of American politics - that is centrist, pragmatic and looking to solve real problems not masage hurt feelings or "values".

The key question in this campaign is rapidly getting to become are we prepared to keep playing the same old games, or allow those who want to, to keep dominating the discussion. Or are we going to find a joint path forward based on the realities we face. While we've still got some big windows of manuvering room. Historically it usually takes a crisis of monumental proportions, e.g. the Revolutionary and Founding, the Civil War and the Derpession and WW2 to generate a new, centrist and forward-looking political coalition prepared to be innovative and adaptive. But not always. Twice in our history we made major adjustments without being entirely forced to it. Once big time when the Progressives found a way to deal with Industrialization. And another, smaller, when Reagan brought us out of the malaise of our own self-inflicted wounds.

Poetic Campaigns and Prosaic Policy: Realities of Change Earlier we put up several posts on some small aspects of the economy and the elections as well as walked thru the comparison of this election, particularly Obama's campaign to a revival of the '60s. One of our key points was that we squandered all those opportunities for change and improvement when the idealists discovered how hard it was. The question that was left hanging was...and then so what ? Well that's one we still intend to hammer on, and keep hammering on. But trust our friends at Doonesbury to speak to the inspiration, the Poetry of Politics. But further on you'll find Gov. Mario Cuomo who speaks truth to power, the voter (and we hope the reading public insofar as we reach it here).

Politics: SEE Changes and Structure

Super Tues.: Barrack & Billary "Tied", John-Boy in Front ? Now the theory of politics in the US, or for democracies in general, is that the voters are distributed around a bell-curve with the bulk in the middle and tailing off to the ends. By and large that's true - particularly when you allow for the curve shifting left or right over the years as the major issues and concerns shift, society changes and so forth. What was the Center when Lincoln was running in 1850 wasn't the center when he ran in 1859. And it certainly moved when FDR won his first election. And none of those is really where we're at today, though 1932 is a lot closer. But that little map explains a lot of these primaries. In fact taken all together it explains a lot of the last 20 years or so. Have you ever wondered why gas stations tend to cluster together ? Or resteraunts, home furnishing stores or any other similar stores tend to be co-located ? Well according to the gas-station theory of political economy anybody who doesn't locate near the center of mass of their target market can be out-manuvered. It works like this. Suppose somebody puts a gas station up around the #2/3 spot on the spectrum. Fine as long as they're the only game in town. But when they do some whippersnapper comes along and locates at 3.25. That second station is closer to all the customers from that point all that way out to #10 and will tend to get more of those customers. Of course markets and electorates are structured on more than one dimension but the principles remain the same. As a result when you go into NYC you'll find resteraunts all clusterred together because nobody wants to leave the middle abandoned and get to cut off. It's the same in politics - on the whole, and all else being equal, politicians tend to get driven toward the middle of the electorate. But thruout and since the '90s we've been the "beneficiaries" of extremist, partisan politics. In fact it's gotten so bad that Obama has built his campaign around finding commom (middle) ground. What happened to our gas-station theory ?

Chance to redesign US politics Sometimes we overlook the obvious. Lost in all the excitement are some extraordinary shifts in America’s political landscape. Look at the struggle for the Democratic nomination from another perspective: the politician with the best chance of becoming the 44th president of the US will be a woman or an African American. Try that again: a woman or an African American will most likely deliver next January’s presidential inaugural address. Whether it is Mrs Clinton or Mr Obama who eventually emerges as the Democratic nominee, the primaries are changing the way America looks at itself and the way the world looks at America. With either of them in the White House, it would be another country. What makes this prospect all the more remarkable is that it is already beginning to seem, well, pretty unremarkable. The change in the political terms of trade has also been profound on the Republican side. John McCain’s emergence this week as the strong favourite for his party’s nomination was widely predicted. It is no less of a political earthquake for that. The maverick Mr McCain is the most electable of the Republican contenders in a country fed up with the bitter partisanship of recent years. His reputation for principled politics passes the character test applied by voters to all presidential candidates. There are those who say the ideological struggle now in prospect condemns Republicans to a generation in the wilderness. When you hear Mr McCain’s conservative critics proclaim that they would rather vote for Mrs Clinton than see him represent them in the White House you can understand why. But such political determinism is probably as foolish now as it was in those now forgotten days when Mr Rove was thought a strategic genius. What all this says is that the party has a generational opportunity to do more than win the presidency. The Republicans’ disarray offers Democrats the chance to redesign the contours of American politics. But it will not just happen. It requires a leap of imagination, ambition and a national mood of excitement as well as a plan to fix healthcare. There lies Mr Obama’s strength.

California and the Future of Politics Presidential candidates converging on California over the past week have been testing messages on voters who represent emerging trends across the country: independent voters, Hispanics and voters eager for bipartisanship. To travel across California these days is to see the unfolding contours of the future of American politics. To the north, in Tracy, a growing bloc of independent voters is swinging between Democrats and Republicans, prompting California politicians to seek bipartisan compromises even as the state legislature is riven by deep ideological divides. To the south, in Orange County, a surging bloc of Hispanic voters is loosening the Republican grip on what was once known as Reagan country, tipping the state further into blue territory. Presidential candidates converging on California over the past week have focused on its large delegate haul, which accounts for about a fifth of all delegates up for grabs from Super Tuesday states. But they have also been testing messages on voters who represent emerging trends across the country: independent voters, Hispanics and voters eager for more bipartisanship. California, which has a population of about 37 million, has long been a bellwether for political trends. These days, the trend is moderation. Republican Gov. Arnold Schwarzenegger, who last week endorsed Arizona Republican Sen. John McCain, has worked with the Democratic-controlled legislature on several measures. Up next: trying to achieve bipartisan cooperation to address a massive budget deficit being fed by falling housing prices and an economic slowdown. California is seeing a rise in independent voters. Since the 2000 presidential election, the number of voters registered as Democrats or Republicans in California has fallen by 800,000, while the "decline to state," or independent, rolls have grown by 700,000. Independents now account for one in five voters in California and have injected a new level of uncertainty into state politics.

Politics and Policies: Campaign ‘08

Super Tuesday Outpolls the Accepted Wisdom: Every election proves the press is no better than the guy or girl on the street at predicting the future and probably worse. Hothouse specimens of the Genus Beltway, with almost identical customs, habitats and native costumes, we get too lost in consultants, experts, micro-targeters, admen and other engineers of the modern campaign to get a clear picture of the grassroots. We get stupid enough to insist that the Democrats would have a nominee early and the Republican race could go on until the convention. Barring some big blowup by McCain, the Republicans will calmly coronate the Arizona senator in St. Paul, Minnesota. Clinton and Obama probably will arrive in Denver to deals being made in smoke-free Democratic backrooms and a floor fight over seating delegates. Here are just a few things Super Tuesday proved wrong this week:

When Will the Wounds Heal? A basic law of primary seasons is that the longer they go on, the nastier they get. With Super Tuesday past, that law seems to be in full effect, especially for Democrats. Whatever else yesterday's voting may have done, it did a good job of laying bare the divides within each party. More than that, it may have exacerbated the splits. The Democratic fight between Sens. Barack Obama and Hillary Clinton seems certain to continue, and it is showing a clear divide between whites and blacks, between Hispanics and non-Hispanics, between women and men, and between older and younger voters. Among Republicans, the primaries may have tilted the race toward Arizona Sen. John McCain, but they also have widened the gap between his party's moderates, who see him as a champion, and the conservatives who have lined up behind former Massachusetts Gov. Mitt Romney or former Arkansas Gov. Mike Huckabee. Sen. McCain may have won enough states yesterday to carry him to the nomination, but he hasn't earned sufficiently large margins to claim a partywide mandate. To some extent, of course, these divides are natural and predictable, and hardly unprecedented in a primary season. The question both parties face is whether the wounds the primary season is inflicting are superficial or deep, and whether they can be healed by November. The problem for Democrats is that the race is opening up the kind of sensitive divides that go to the party's very identity as an institution that unites races and genders. Among Republicans, the split that is becoming both more obvious and more nasty is between the party's core conservatives, who often are distrustful, if not disdainful, of Sen. McCain, and more moderate party members who often are enamored of him. It has gotten personal. Mr. Romney has come to attack Sen. McCain as not just an ersatz conservative, but one whose claims to be an heir to the Reagan legacy are dishonest. Sen. McCain has returned the favor, implying Romney policy reversals show he isn't to be trusted.

Issues Recede as Voters Focus on Character Voters appear to be focused on character over candidates' positions on key issues heading into Super Tuesday. Democrats and Republicans have reached the biggest primary day in the nation's history with this much in common: No major candidate on either side has yet offered up ideas or policies that amount to a new ideological course for the country.As voting unfolds today on this Super Tuesday, the two hottest candidates at the moment -- Republican John McCain and Democrat Barack Obama -- are most striking for their ability to appeal to independent voters in the middle of the ideological spectrum, and for their willingness to compromise to get there. In other words, the election of 2008, thus far, is less about ideology and ideas and more about governing style and leadership ability -- intangible qualities on which voters are placing a higher priority than on issues. The tenor seems a reflection of the country's mood: Many voters are in revolt against the partisan wars and bouts of gridlock that have gripped Washington in recent years, and are seeking effectiveness above all. That makes the election debate so far quite different from, say, 1980, when Ronald Reagan settled a debate within the Republican Party by offering a new conservative course of giant tax cuts and big defense spending. It's also different from 1992, when Bill Clinton molded a different Democratic Party by moving to the right on trade, the budget deficit and welfare reform. Those were big policy ideas that also happened to have big political impact.

Billary Goes Back to Washington (II): It's All About Character Well we just finished amusing ourselves with a set of political cartoons at Billary's expense. Let's hope she's laughing with us. In a more serious earlier post we argued that there are three things that voters look for in a President - never getting what they want of course but settling for the best tradeoffs they can get. The three were: 1) Vision & Leadership, 2) Character (Integrity & Values) and 3) Workable Policies/Positions. Let's focus now on the Character question and appeal to that noted doyen of American politics Pres. Andrew Shephard - who as much as anyone captures or represents what we want in a President. (In fact somebody once described the movie "American President" as depicting who we wished we'd gotten instead of what we did get - thereby proving my point):

John-Boy Wrestles the Swamp Monster:McCain & the Right It's probably about time we were an equal opportunity disser and poked a little fun and a little harm at the Rips, the far-fight conservatives and John McCain. Fortunately we don't have to look to far for the fun as the nation's political cartoonists again stepped into the breach. Now, political cartoons don't work if there's not an element of truth for them to riff on - whoever's truth that might be. Notice that while the set of Hillary cartoons were all about her these McCain cartoon are none about him. Rather they're about somebody else's reactions ! I wonder if the folks who're the subject of the cartoons would recognize themselves ? Not only to appreciate the humor and laugh but to realize where they stand in the spectrum of politics and in the regard of the electorate.A couple of serious points after you've stopped chuckling about John-Boy vs the Cons. First, Hillary and Barrack may still be wrestling for the Dem. nomination but the MSM is discovering that the Rep. are even worse split under the covers of McCain's lead than they are. By a large margin.

Romney's missed chance That mantle belongs to former Massachusetts governor Mitt Romney, a wealthy and hugely successful businessman. Yet Romney's chances of becoming the next Harvard MBA in the White House appear to be dwindling. What happened? His 2004 book, Turnaround: Crisis, Leadership, and the Olympic Games, is devoted entirely to the story of how he not only fended off disaster in Salt Lake, but finished the Olympics with a $100 million surplus. The book was clearly intended to serve as a forerunner to his presidential campaign, which is telling. While McCain's autobiography recounts his military heroics and Barack Obama's focuses on his multicultural upbringing, Romney's campaign manifesto is essentially a business book. In Turnaround, Romney lays out four guidelines he used as president and CEO of the Salt Lake Organizing Committee. First rule: Know why you're taking on a job. Second: Assemble the right team. Third: Carry out a strategic audit. And fourth, communicate the vision and challenge the team. Romney tried to apply those principles when he returned to Massachusetts and was elected governor in 2002 - with mixed results. Not until the beginning of this year did Romney even start emphasizing his economic experience on the stump. Until then, he had effectively repudiated his entire career by presenting himself as the candidate for social conservatives rather than economic ones. Which may explain why Republican voters aren't choosing Romney. It's unclear that he can be trusted not to abandon his positions for the sake of political expedience. Romney's pragmatism served him well in business. But in this election at least, voters seem to want a president who will stand up for his beliefs.

Posted by dblwyo at 06:17 PM | Permalink | Comments (0)

This week Paul Krugman's column drew attention to a recent paper by Reinhardt and Rogoff, both of whom are distinguished economists with wideand deep practical experience in the real world of policy making. Once he'd posted the blogosphere (i.e. two my favorite econ/finance blogs) proceeded to go to town on the topic. Here's what Prof. Krugman had to say, which needs no further embellishment from me. The point YOU need to take from this is that the next President will be facing severe economic pressures that result from an accumulation of dodged problems that will HAVE to be dealt with. As you weigh candidates and issues we suggest, therefore, that you put the economic situation rather high on your priority list. In addition to Krugman's column we also point to some other concerns, e.g. another column by Ken Rogoff about the fragilities in China which could have even more severe consequences.

A Long Story It’s still not a certainty that we’re headed into recession, but the odds are growing greater. The economic news has been fairly dire this week. The credit crunch is getting worse, and a widely watched indicator of trends in the service sector — which is most of the economy — has fallen off a cliff. It’s still not a certainty that we’re headed into recession, but the odds are growing greater. And if past experience is any guide, the troubles will persist for a long time — say, into the middle of 2010. The problems now facing the U.S. economy look a lot like the problems that caused the last two recessions — but this time in combination. On one side, the bursting of the housing bubble is playing the role that the bursting of the dot-com bubble played in 2001. On the other, the subprime crisis is creating a credit crunch reminiscent of the crunch after the savings-and-loan crisis of the late 1980s, which led to recession in 1990. Now, you may have heard that those recessions were short. And it’s true that the last two recessions both officially ended after only eight months. But the official end dates for those recessions are deeply misleading, at least as far as most peoples’ experience is concerned. If the slump is still going on, which is likely, this will offer a chance to consider other, more effective measures. In particular, now would be a good time to think about the possibility of going beyond tax cuts and rebate checks, and stimulating the economy with some much-needed public investment — say, in repairing the country’s crumbling infrastructure. But we won’t get any innovative action to help the economy unless the next president has a couple of key attributes. First, he or she has to be free of the ideological blinders that make the current administration and its allies fiercely oppose the idea that the government can do anything positive aside from cutting taxes. Second, he or she has to be knowledgeable about and interested in economic policy. Presidents don’t have to be their own chief economists, but they do need to know enough to take the right advice.

• Is the Current Financial Crisis So Different?
• 5 Historical Economic Crises and the U.S.
• Global Financial Crises, Part II: Norway 1987

It's probably about time we were an equal opportunity disser and poked a little fun and a little harm at the Rips, the far-fight conservatives and John McCain. Fortunately we don't have to look to far for the fun as the nation's political cartoonists again stepped into the breach.

Now, political cartoons don't work if there's not an element of truth for them to riff on - whoever's truth that might be. Notice that while the set of Hillary cartoons were all about her these McCain cartoon are none about him. Rather they're about somebody else's reactions !

I wonder if the folks who're the subject of the cartoons would recognize themselves ? Not only to appreciate the humor and laugh but to realize where they stand in the spectrum of politics and in the regard of the electorate.

A couple of serious points after you've stopped chuckling about John-Boy vs the Cons. First, Hillary and Barrack may still be wrestling for the Dem. nomination but the MSM is discovering that the Rep. are even worse split under the covers of McCain's lead than they are. By a large margin.

Second, run these posts in your head back by the spectrum of politics post (Super Tues.: Barrack & Billary "Tied", John-Boy in Front ?). We'll pick up the idea later but it seems to still be holding togther pretty well indeed.

Now for the more serious point, which oddly enough, exactly dovetails with the cartoons. We'll let Dan Henniger of the WSJ make part of it for us in the accompany vidclip. And the rest of the point is largely made by the following excerpts.

We will however ask a question - if the Far-right Conservatives aren't willing to bring their principles into the public forum and present them and defend them convincingly to the rest of us do they deserve to have their concerns allowed for ?

Election, McCain and the Right

In GOP Race, Calculations Turn Complicated Messrs. Huckabee and Romney, who seem to hold one another in great disdain, suddenly have a common cause of sorts. Mr. Huckabee has called Mr. Romney a flip-flopper and a phony; Mr. Romney has said Mr. Huckabee is a tax-and-spend liberal. Yet both want the nomination battle to continue in hopes that some change in fortunes will swing it their way. Mr. Romney won more delegates and more states on Super Tuesday than Mr. Huckabee did, but because expectations were higher, Mr. Romney's performance was widely seen as disappointing. The Romney camp said it wasn't surprised by Mr. McCain's performance Tuesday, but it was caught off guard by Mr. Huckabee's strong showing. Since losing Florida Jan. 29, the campaign tried to cast the race as a two-person contest. Voters didn't agree. Mr. Huckabee's camp was overjoyed at his showing Tuesday, winning five states, including a competitive race in Georgia. Mr. Huckabee was traveling to New York City today for, among other things, meetings regarding fund raising. Mr. Saltsman said the campaign isn't cash-starved, but it has long been a low-budget affair and could use an infusion. Some interested in stopping Mr. McCain see their best chance if both Messrs. Romney and Huckabee stay in the race and, between them, continue to take delegates away from the front-runner.

Posted by dblwyo at 06:28 AM | Permalink | Comments (0)

Well we just finished amusing ourselves with a set of political cartoons at Billary's expense. Let's hope she's laughing with us. In a more serious earlier post we argued that there are three things that voters look for in a President - never getting what they want of course but settling for the best tradeoffs they can get. The three were: 1) Vision & Leadership, 2) Character (Integrity & Values) and 3) Workable Policies/Positions. Let's focus now on the Character question and appeal to that noted doyen of American politics Pres. Andrew Shephard - who as much as anyone captures or represents what we want in a President. (In fact somebody once described the movie "American President" as depicting who we wished we'd gotten instead of what we did get - thereby proving my point):

President Shephard: For the last couple of months, Senator Rumson has suggested that being president of this country was, to a certain extent, about character, and although I have not been willing to engage in his attacks on me, I've been here three years and three days, and I can tell you without hesitation: Being President of this country is entirely about character. We have serious problems to solve, and we need serious people to solve them. And whatever your particular problem is, I promise you, Bob Rumson is not the least bit interested in solving it. He is interested in two things and two things only: making you afraid of it and telling you who's to blame for it. That, ladies and gentlemen, is how you win elections.

Building on Pres. Shephard's comments below are excerpts from three very recent stories detailing Hillary's character over the span of her career. One from the failed Healthcare initiative that points out there were in fact workable alternatives, from her own party, which she went to extravagent lenghts to crush mercilously. Another from today by Peggy Noonan which asks, as it looks as if Hillary's position continues to deteriorate (if it does) whether or not she has the strength of character to conceed gracefully. And the final one, which is new news to me and we suspect many, about her tenure on the Watergate committee where her behavior can only be described as partisan, unethical and win for her side at any cost. If it turns out to be true it's both sad and extremely damaging.

The real question is has she, like any of us, risen to the challenges of her life by learning anything ? And more importantly growing her moral character. Or is that earlier Hillary, again if accurately portrayed, the person we might have in the White House facing some of the most turbulent times we've seen in decades.

You be the judge - but judge you must whether you will or nill. If nothing else by default.

The Cooper Concerns There are certain moments when Hillary Clinton’s dark side emerges and threatens to undo the good she is trying to achieve.  Her campaign tactics before the South Carolina primary were one such moment. Another, deeper in her past, involved Jim Cooper, a Democratic congressman from Tennessee. Cooper is one of the most thoughtful, cordial and well-prepared members of the House. In 1992, he came up with a health care reform plan that would go on to attract wide, bipartisan support. A later version had 58 co-sponsors in the House — 26 Republicans and 32 Democrats. It was sponsored in the Senate by Democrat John Breaux and embraced by Daniel Patrick Moynihan, among others. But unlike the plan Hillary Clinton came up with then, the Cooper plan did not include employer mandates to force universal coverage. Moreover, the debate Clinton is having with Barack Obama echoes the debate she had with Cooper 15 years ago. The issue, once again, is over whether to use government to coerce people into getting coverage. The Clintonites argue that without coercion, there will be free-riders on the system. They’ve got a point. But there are serious health care economists on both sides of the issue. And in the heat of battle, Clinton has turned the debate between universal coverage and universal access into a sort of philosophical holy grail, with a party of righteousness and a party of error. She’s imposed Manichaean categories on a technical issue, just as she did a decade and half ago. And she’s done it even though she hasn’t answered legitimate questions about how she would enforce her universal coverage mandate. Cooper, who, not surprisingly, supports Barack Obama, believes that Clinton hasn’t changed.

Can Mrs. Clinton Lose? If Hillary Clinton loses, does she know how to lose? What will that be, if she loses? Will she just say, "I concede" and go on vacation at a friend's house on an island, and then go back to the Senate and wait? Is it possible she could be so normal? Politicians lose battles, it's part of what they do, win and lose. But she does not know how to lose. Can she lose with grace? But she does grace the way George W. Bush does nuance. We know she is smart. Is she wise? If it comes to it, down the road, can she give a nice speech, thank her supporters, wish Barack Obama well, and vow to campaign for him? It either gets very ugly now, or we will see unanticipated--and I suspect professionally saving--grace. I ruminate in this way because something is happening. Mrs. Clinton is losing this thing. It's not one big primary, it's a rolling loss, a daily one, an inch-by-inch deflation. The trends and indices are not in her favor. She is having trouble raising big money, she's funding her campaign with her own wealth, her moral standing within her own party and among her own followers has been dragged down, and the legacy of Clintonism tarnished by what Bill Clinton did in South Carolina. Unfavorable primaries lie ahead. She doesn't have the excitement, the great whoosh of feeling that accompanies a winning campaign. The guy from Chicago who was unknown a year ago continues to gain purchase, to move forward. For a soft little innocent, he's played a tough and knowing inside/outside game.

Posted by dblwyo at 12:00 PM | Permalink | Comments (0)

Well things are beginning to sort down rapidly in these primaries. Not least of the Super Tues results is that Billary may have been weakened. As we pointed out in a prior post (And Then there Were...Two: Vision ? Leadership ? Politics !) on digging underneath the numbers their results were strong in the traditional Dimowackic strongholds but when you look beneath the surface Obama was closer than the surface would indicate. We'll pick up that theme more in a later post but to give all this a little perspective we thought we'd look back on how the political cartoonists have seen her campaign with a sampling of our collection to date. If nothing else, besides being pretty pointed, they're very funny. And have that painfully cutting edge of a true ring to them as well.

The composite at right, if you've been following along, is a sampling from the early days to last summer or so.

Hillary's been the presumptive Democratic candidate for the last several years but it's been a long, rocky road that's not gone as predicted. Largely due to Obama and her own mistakes. But we certainly went thru a period when it was Hillary and the Six Dwarves, at least at first.

I believe they call that "entitlement"; or the annointing of the Queen. An attitude that, again IMHO, just wafted off the campaign. And in fact a lot of her dark side strikes us an outraged sense of entitlement. After all the Dwarves were perfectly free to challenge her. That was politics and a game she played better, had more money, a better machine, etc. etc. After all it was her turn, right ? :)

And then all of sudden it got down and dirty - not in a real dirt sense but she was being legitimately challenged. First by Edwards who, whatever else one may think, forced some key issues onto the national agenda and got all the candidates to have to recognize them, particularly Healthcare. And then there was Barrack who was doing the Vision thing - which she seems constitutionally incapable off. Talk about failing to develop a competitive response !

My memory is that she didn't much care for that. How 'bout yours ? Of course she likes it even less now but that's the way the game is played; or should be. 

But life is change. And this campaign has certainly undergone its' own rapid evolutions up to and including last week's Super Tues results. Which as we mentioned weren't quite what she was anticipating. Now we'll find out what she's really made of; and Barrack too of course.

The tougher it got the more Bill came out of the closet, and made it clear he'd be a major player. In fact more than once it was clear that his ego and general neediness won't allow him to put general issues up front. Instead he'll put himself there first. Speaking of experience Hillary's been campaigning on her vast legacy. Granted she's been a Senator, and by all accounts a good and effective one who served her constituents and the country well while also learning to play the Senate game and earning respect for it. All of that line of argument amuses us greatly since the last candidate to win office as a young and inexperienced governor with no substantive foreign policy or national security credentials was Bill. Not just ironic but sad considering how he neglected foreign policy issues to all our detriment. A luxury nobody has now and a major squandered opportunity.

It's also clear that Bill isn't just needy but has a different set of zipper problems as well. Back to that outraged entitlement thing ?

And it's also not entirely clear that Hillary has learned much if anything about new approaches to policy making since here Healthcare disaster. While her plan is fairly sensible on balance there are certain elements that are pretty old-skul Big Government. And not much more workable than when she blew it last time.

Not encouraging for an electorate, including me, who'd like both a new vision of the future and practical, workable alternatives for getting there. But you make up your own mind. Here's we're raising questions.

And amusing ourselves - but then we laugh at our own jokes. But ya gotta admit they're pretty funny. Wonder if Hillary would laugh ? Think about - Reagan could tell a joke on himself. Even Bush can and does - check out the National Press club roast of him sometime. 

Posted by dblwyo at 10:35 AM | Permalink | Comments (0)

Earlier we put up several posts on some small aspects of the economy and the elections as well as walked thru the comparison of this election, particularly Obama's campaign to a revival of the '60s. One of our key points was that we squandered all those opportunities for change and improvement when the idealists discovered how hard it was. The question that was left hanging was...and then so what ? Well that's one we still intend to hammer on, and keep hammering on. But trust our friends at Doonesbury to speak to the inspiration, the Poetry of Politics.

But further on you'll find Gov. Mario Cuomo who speaks truth to power, the voter (and we hope the reading public insofar as we reach it here).

One thing that particularly struck us was his reference to Adam Smith - particularly his first work, "Theory of Moral Sentiments" and his exposition of Lincoln's policies. After you finishing chuckling over Doonesbury try Mario on for size. And then check out an example from Greg Mankiw's blog on debt and the polemics of political manuvering and deception. We'll let you draw your own interpretations but if you'd like Change, this time around, let's focus on what we need to really do to make it happen. Not just talk about it and get all warm and fuzzy. [BtW - try a friend's post on his blog for the same argument put a little more directly: Romney Bows Out!]

Here's an excerpt from Greg's blog on the posturing and distortion that goes on with regard to policy in general and economic policy in particular. Highly recomment you read the whole thing as it's an eye opener. You don't have to think that this is the most overwhelming issue per se. Rather what I'd ask you to do is to wonder who's telling you what tells for their own self-interest. Not a surprise but very disappointing - and not in the general public interest. Though Greg doesn't draw that conclusion we will !

Debt and the Real Threat

An econonerd friend in the White House emails me his analysis of the budget picture:

At a press conference Monday, Senate Budget Committee Chairman Kent Conrad's (D-ND) said:

This is easiest to analyze if we look at the simplest statement made by Chairman Conrad: "That is almost a doubling of the national debt on [the President's] watch." The chart above purports to make that same point, as gross federal debt increases from $5.8 Trillion in 2001, to $10.4 T in 2009. (By the way, that's a 79% increase, which is a bit far from "almost doubling". But I'll set that aside.)

I'm going to disprove the statement: "That is almost a doubling of the national debt on his watch." I don't dispute the factual accuracy of the numbers, but instead the presentation and the conclusion.

This presentation misleads in three ways.

For the entire e-mail exchange and the substance of the analysis by Greg's friend and colleague please goto http://gregmankiw.blogspot.com/2008/02/debt-and-real-threat.html  .

Posted by dblwyo at 07:31 PM | Permalink | Comments (0)

Our posting title pretty well captures the headline reporting in the MSM and, to some extent it's fair. But when you dig thru the numbers a bit it doesn't strike us as accurate on either side. In fact we'd argue despite all the hoopla and expectations nothing much was settled nor a lot new learned.

Much as it pains me (for lots of reasons, some of which may be obvious if you've read along in this blog from time-to-time) the NYT deserves credit for a nice graphical summary of the elections and a good summary page overall. Sad when a worshipper of evidence-based decision-making ends up fighting his own feelings wouldn't you say ? :). But to give credit where it's due please take a moment and examine their stat page, particularly the respective results page/maps. (NYT Results ). 

But before diving in there you might take a moment to examine the little graphic we threw off in an idle moment or two. And ask yourself what it's depicting. (PAUSE.....).

Now the theory of politics in the US, or for democracies in general, is that the voters are distributed around a bell-curve with the bulk in the middle and tailing off to the ends. By and large that's true - particularly when you allow for the curve shifting left or right over the years as the major issues and concerns shift, society changes and so forth. What was the Center when Lincoln was running in 1850 wasn't the center when he ran in 1859. And it certainly moved when FDR won his first election. And none of those is really where we're at today, though 1932 is a lot closer. But that little map explains a lot of these primaries. In fact taken all together it explains a lot of the last 20 years or so.

Have you ever wondered why gas stations tend to cluster together ? Or resteraunts, home furnishing stores or any other similar stores tend to be co-located ? Well according to the gas-station theory of political economy anybody who doesn't locate near the center of mass of their target market can be out-manuvered. It works like this. Suppose somebody puts a gas station up around the #2/3 spot on the spectrum. Fine as long as they're the only game in town. But when they do some whippersnapper comes along and locates at 3.25. That second station is closer to all the customers from that point all that way out to #10 and will tend to get more of those customers. Of course markets and electorates are structured on more than one dimension but the principles remain the same. As a result when you go into NYC you'll find resteraunts all clusterred together because nobody wants to leave the middle abandoned and get to cut off. It's the same in politics - on the whole, and all else being equal, politicians tend to get driven toward the middle of the electorate.

But thruout and since the '90s we've been the "beneficiaries" of extremist, partisan politics. In fact it's gotten so bad that Obama has built his campaign around finding commom (middle) ground. What happened to our gas-station theory ?

Well there's one other little thing that goes on. It's expensive to be a voter - if not in money then in time and effort, even in emotional energy. In fact people are generally notorious for spending more time on researching a new car than they spend on who to vote for. And for spending far more time on investigating a new house. Which when you stop to think about it makes perfect sense. When you buy a car that'll be your car and it directly influences how happy and satsified you are. When you vote you're one of millions of voters on the margin who contributes to influencing the election but can't control it. In other words it's just plain old common sense that people spend a lot more time buying a car than picking a candidate (BTW - this is important. All that hectoring and lecturing from the punditocracy and do-gooders will never overcome the basic sense of simple economics. The only elections where 99% of the voters participate are places like Iraq under Hussein :) ).

But that's not the whole story. Some people care a whole lot more about politics or particular issues. In fact that explains all the time, money and effort that goes into lobbying. For the groups, companies or organizations who're subject to legal or regulatory impacts the outcome of legislation determines, in as fundamental sense as possible, how well they're going to do. Some drug companies have lobbyists, so do environmentalists, the AARP, the Teacher's Union and so on. For these folks politics really....really matter.

When you stop to think about it and work it thru these simple little charts are powerful explanations for a lot that goes on around us. Bill Clinton ran and won as a centrist candidate in '92. But his first major political initiative was Hillary's abysmal Healthcare reform effort which can charitably be called  "socialism", or at least Big Government run amok. That po'd so many people that Newt the Grinch was able to put together a rightish conspiracy to "let the bastards freeze in the dark" and put a Reb. majority into Congress. It turned out we didn't like that either so we got a do-nothing Presidency instead of what the Brits got when, as John Major puts it, Tony Blair stole his clothes while he was swimming the river; that is he move the Labor party to the middle with market-friendly policies and made it stick. Despite the fact that they proceeded to lynch him in effigy every year or so (which explains, partly, why they were so po'd at him. Nothing like having your ideals compromised by having to work with the rest of the eletorate).

Karl Rove temporarily changed the game because there are a lot of extremist partisans in both parties so he introduced the notion of running off the base and only going as far toward the middle as required to get 50 + .01%of the vote. Now that's brilliant electoral tactics and terrible for building a sustainble foundation for a democracy. But we try and show this in the graphic by showing how the parties are distributed at the extremes of the general curve. BECAUSE THEIR ISSUES MATTER MORE TO THEM THAN THE AVERAGE VOTER. And they were willing to get out and participate more. That in a nutshell is American politics from '90 to now. And explains why all the right-wing nutjobs can't stand John Boy while the voters are more happy with his moderate positions. 

Another little BTW - put these two "theories" together  (I have sources and references) and you can not only explain a lot, you can do better than 98.5% of the talking heads and political scientists pundering away out there (& no that's not a typo). You too can amaze your friends at parties ! But just for the record this ain't all me - just put some pieces together and I have sources and references to proof it. They just happen to be stuff the pundits don't bother to read.

So now if you'll go back to the NYT results maps and take a look at the Rep. and Dem. outcomes we've got an interesting little tool for thinking things thru a bit better.

Rep. Outcomes - McCain Wins ?

Hmmm...not really. If you thru on a state by state basis Huckabee showed pretty strong results in several major Southern states while Ron Paul did pretty well on the Northern fringes. You can take fringe anyway you want and it was intended btw. And nowhere, at least on my quick inspection did he overwhelmingly whip our boy Der Mittganger. In fact if Der Mitt would re-discover his inner idealist, i.e. stand for something instead of just getting elected he could put up a hell of a good fight here. This is enormously ironic because in his business book on saving the Olympics he talks about a) having to have a compelling vision of the future and b) communicating, selling and motivating your team behind you. Instead he's the Man for All Reasons - as long as he thinks it'll get him some votes. Mitt's sold his own principles down the river to win. But he's still in the game no matter what today's headlines or the McCain camp would have you take away.

And think about who Ron Paul and Mike Huckabee represent on our political maps. Voters more conservative, narrow issues oriented and populist than McCain's more centrist bent. You'd have to figure that more than 50% would go for Mitt. In either case both men could come into the national convention with enough support to cause John Boy to have to accomodate their positions, whatever you or I might think of them. Which also explains his pandering to the right wing. Yet such pandering would tend to erode his support from the middle in a general election as well. An interesting tactical dilemma wouldn't you say Mr. Rove ?

Dem. Outcomes - a Split ? Well Maybe.

When you perform a similar surgery on Billary vs Barrack the results are even more interesting indeed. Even fascinating - and the maps are very helpful. First off they each took the states you'd really expect: AK & NY for her and IL for him. Boy could that have been embarrassing. Clinton's greatest strengths were in the traditional Dem. big states (CA, NY, MA) and the margins were ~52+% to 42%. Strong but not overwhelming. Barrack tended to win key Southern states with larger black populations - which is really important. And the northern mid-tier states (ID, CO, KS, et.al.) where voters tend to be more pragmatic and centrist rather than wedded to long-standing, traditional Democratic positions (the nuts and berries votes on the Left coast and the white whine and bray crowd in the East. Sorry, couldn't resist).

In fact a little personal anecdote to illustrate my point. My mom spent WW2 helping to organize heavy bomber squadrons for the Army Air Corps; that is in picking the officers to staff certain key positions. A very interesting thing she told me that's stuck in my mind for years - they always picked a Midwesterner for the Intelligence Officer because they were less parochial than the Coasters. And more open to investigating and letting the facts on the ground influence their decisions rather than distort them with pre-concieved notions. Think about it FWIW. The cultures haven't changed that much, oddly enough, in 60-70 years for the argument to still have some weight.

But those will, again, be the folks in the middle in the general election.

Now we've been arm-waving in broad generalities but there are two other things going on here that could also influence things big time.

1. The younger voters are really....really....really tired of all this one-issue burnt offerrings on the alters of ideological purity. The think the older folks have kinda screwed things up - and they have a pretty good case don't they ? - and are looking for the New Jerusalem (that's Camelot to the older generation)
2. Black voters have been swinging over to supporting Barrack big time for the first time ever. While I haven't seen any particpation stats they normally vote for the candidate who best represents their views AND who they think has a real chance. Aside from its' immediate impacts this is indeed history in the making here folks.

Posted by dblwyo at 01:46 PM | Permalink | Comments (0)

Here's the final posting of last week's intereseting readings. mostly about International Affairs since we put several other posts on politics and the US elections. Along with some on key policy issues, particularly economics. This post has several other interesting readings on policies as well.

Mostly this election has been about personality, i.e. mostly about character, vision and leadership. While Edwards managed to get several interesting policy choices tabled, e.g. Healthcare, by and large the primaries have not been policy-driven so far. But there are several major and distinct differences between the Republican and Democratic candidates. Whom I like to refer to in my lighter and/or more cynical moments as the Publicans and the Dimowacks. You know - Publican as in "publicans and sinners" from your h.s. English class ? :)

Well the US is not the only place facing major changes - Europe seems to be finally beginning to go thru a serious re-thinking. Highlighted here by an interesting story about Bernard Kouchner, the Fr. Foreign Minister (we'll leave the stories on Sarkozy's marital re-arrangements others, only commenting that he must have a lot of energy in all aspects of his life). Closer to home Latin America continues to face troubles and turmoils as well as sufferring from continued benign neglect on the part of the US. A situation that could blow up in our faces at any time.

Meanwhile the worldwide struggles for more representative government (notice we avoided saying democracy) saw both a historical moment with the passing of Indonesia's Suharto and the US's pragmatic acquiscience with Central Asian police states. And therein lies a fundamental dilemma. Suharto most likely saved Indonesia from collapse and/or a Communist takeover back when that really matterred. But left a legacy of crony capitalism and corruption from which it has yet to progress.

Similarly, after over a decade of increased participation by Islamic religionists in Turkish politics there's beginning to be a secularist backlash. Wherein lies the path forward for all these countires to a stable system with peace, justice and economic progress ? Recent winter storms have shown us how potentially fragile the Chinese socio-economic system is and how how vulnerable to disruptions. There's a particularly interesting excerpt by a Chinese journalist working for the WSJ on the differences in attitudes and circumstances between US and Chinese middle classes the highlights these issues in a more down-to-earth way that relates to the way most of us live our lifes.

And, for ME news, the Iranian theocratic kleptocracy continues to have an accelerating economic implosion while progress continues to be made in Iraq. In fact below you'll find the best single summary of the evolution of the Iraq situation from a US perspetive, though it neglects the nation-building and politico-economic aspects. 

The two prior posts listed in the General section below on all the folks looking to compare Obama to the Kennedy's and on the kind of world we'd want to live in put all this in a certain set of perspectives.

General & Special

·  Times Are A'Changin: Will the 60's (Now) Be Good For Us ?

·  The Sage of Omaha: Values, Integrity and the World We Want

Int’l Affairs

A Statesman Without Borders Can Bernard Kouchner, a 60-something, high-energy, danger-loving doctor turned foreign minister, make France a global player again? It is easy to make fun of French foreign policy, but not so easy to think what you would do if you were France. Europe’s other traditional great power, England, threw in its lot with its former colony across the pond. Germany, a 20th-century power, is largely shaped by “never again.” What, then, of France? After World War II, which precipitated the dissolution of its vast colonial empire — the last vestige of global power — France under Charles de Gaulle sought a new identity for itself by standing at a remove from the United States and the Atlantic alliance. De Gaulle removed France from NATO’s integrated command in 1966. (He suggested a ruling “Directorate” to consist of France, the U.K. and the U.S., but the Americans were not amused.) Since that time, French presidents of all parties have hewed to what Hubert Védrine, a former Socialist foreign minister, calls “the Gaullo-Mitterrandian-Chiracian consensus.” Védrine defines this consensus as “autonomy of decision” and “autonomy of thought.” France drew its own political map. The map was not so very different from the Italian or the German one, but the important thing was that it was theirs. The foreign policy of France, like its cuisine, should be unmistakably, ineffably . . . French. However, the increasing integration of Europe and the globalization of so many formerly domestic issues have made specially flavored foreign policies increasingly quaint.

'Forgotten Continent' Why doesn’t the U.S. pay more attention to Latin America? Our mostly Spanish-speaking neighbors have reason to suspect that except for occasional military and economic interventions, American leaders don’t pay them much mind, let alone give them the respect they’ve earned. Michael Reid, a longtime Latin America correspondent and the editor of the fine Americas section of The Economist, takes exception to such benign neglect, and worse, in “Forgotten Continent: The Battle for Latin America’s Soul.” In a brilliantly researched and annotated work of scholarship, Reid makes a cogent case that the battle has become more internal — but of necessity, not by choice. Since Latin American nations are beginning to get their true democratic bearings, he argues, now would be a good time for old hands at stable democracy — particularly in Washington and Europe — to come off the bench and enter the game. The consequence of not doing so would be to forfeit this critical relationship to China and India, both eager to assert themselves, at least economically, in the region. Latin America has undergone dramatic change since 1977, when all but four countries were dictatorships. Today, with the exception of Cuba, each has evolved into a democracy — though sometimes the results have been so flawed that, like Barry Bonds and his home run record, they require an asterisk, to explain that the leader was elected but under less than ideal circumstances.

Argentina Rises, Minus Its Swagger Argentines, still struggling under a faltering economy, look for some new economic lessons from Brazil. EARLY in the last century, Argentina was one of the world’s 10 richest countries. Its fabled beef and other farm exports were building an industrial economy. In 1928, it had more cars than France and more telephone lines than Japan. The dream of its Spanish founders — to transform a wild land tucked near the bottom of the world into a great country of European culture and education inhabited by white-skinned people — was coming true. But those days are deep in the past.

Seeking a Path in Democracy’s Dead End The Bush administration has quietly come to terms with the police states in Central Asia. It was the latest signal of an undeclared shift in Washington’s foreign policy across the stunted democracies and outright dictatorships that lie to Moscow’s southeast, from the Caspian Sea to China’s borders. In the last three years in these former vassals of the Kremlin, the exuberant vision of nurturing pluralistic societies and governments responsive to popular will — enunciated by President Bush’s public calls for democratization — has met so many obstacles that it has been quietly recalibrated. Throughout the region, journalists and opposition figures have been harassed, threatened, beaten, imprisoned and sometimes killed. American policy has accepted less ambitious goals. Democracy promotion is not gone. But it has taken its place in a wider portfolio of interests. These include access to oil and gas, improving trade and transportation infrastructure and expanding military, counter-narcotic and counter-terror cooperation — all informed by a sense that in the competition with Russia and China for regional influence, the United States has lost ground. If the shift seemed abrupt, it was not. The erosion of the ambitious vision began almost as soon as it was declared.

Suharto's Legacy Will history treat Suharto kindly? Many of his countrymen today do not. Last year, students protested in Jakarta over the government's decision not to prosecute him for corruption, even as the former Indonesian president lay on his sickbed. Abroad, too, it is fashionable to sneer. Many mention him in the same breath as Mobutu Sese Seko, another officer turned strongman, who plundered Zaire from the mid-1960s to the late 1990s. Suharto is accused of similar avarice, and vastly inflated estimates of his family fortune are blithely tossed around. But the pendulum of condemnation has swung too far, and Suharto's death yesterday should be the impetus for a reappraisal. The positive contributions of the man who made Indonesia a respected member of the international community deserve at least equal emphasis.

Suharto's Corrupt Legacy Lives On in Indonesia On Jan. 27, Suharto died of multiple organ failure at the age of 86. Yet just ask Transparency International why the word ``finest'' shouldn't apply to the man who ruled Indonesia with an iron fist for 32 years until his 1998 ouster. In its 2007 Corruption Perceptions Index, Indonesia ranked 143rd -- behind Gambia, Pakistan and the Philippines.  Or ask the United Nations. In September, its Office on Drugs and Crime alleged Suharto stole as much as $35 billion, 1.3 percent a year on average of Southeast Asia's biggest economy's gross domestic product, during his repressive tenure (Suharto's lawyer dismissed the report as fiction). Or check with World Bank President Robert Zoellick. While visiting Jakarta in December, Zoellick said Indonesia needs to reduce corruption and focus on ``effective'' public spending to boost growth to the 9 percent level needed to raise living standards for its 235 million people. When officials in Jakarta wonder why Moody's Investors Service rates their foreign-currency debt three levels below investment grade, corruption is a principle reason. It also explains why Yudhoyono hasn't attracted the $22 billion needed to build ports, roads and power plants and pull 37 million people out of poverty by adding jobs. By saying Suharto deserves the ``highest respect,'' Yudhoyono reminded many investors why they avoid Indonesia.

Beautiful Country Li Yuan ponders middle class in America and China. Middle class is a new concept in China. Thirty years ago everyone was poor, and the Chinese government still avoids the term -- the National Bureau of Statistics uses the term "middle-income family" to describe households with annual income between 60,000 and 500,000 yuan, or $8,300 to $69,420. (As a socialist country, we're not supposed to have classes.) The cost of living is much higher in Beijing and Shanghai than in most Chinese cities, yet millions of Chinese have moved to those places for job opportunities and the excitement of city life. So it is here: People like me would rather live in New York City than most anywhere else. But it strikes me that what's happening in Manhattan epitomizes the growing income disparity and decline of a true middle class in the U.S. An increasing number of middle-class Americans can't afford health care and some have become working poor, with their salaries not enough to pay bills. Some Americans think their country has become a winner-take-all society. I wonder how they would feel if they were middle class in China, where income disparities are even bigger and the middle class doesn't have much of a safety net to fall back on. I wonder when China's middle class will have a voice in policy-making, and if they will have any way to ensure that economic benefits are more evenly spread. Maybe we should spend more time discussing these issues instead of focusing on the exact income level that makes one middle class.

• Winter Storms Threaten China's Economy Severe winter storms, which have hit much of central, eastern and southern China with snow and freezing temperatures, are threatening a national economy already strained by serious energy shortages and mounting inflation.

IRAQ: The War So Far The basic U.S. strategy in Iraq was, historically, sound. You help the locals get organized so they can take care of themselves. That means elections and help to rebuild local institutions. But there's never a guarantee that will work. The U.S. Marines were in Haiti for nearly 30 years (from 1914), and the country still reverted to dictatorship and poverty when the marines left. This exposes a truth that many refuse to acknowledge. Fixing countries isn't easy. The "civil society" that we in the West take for granted, cannot just be conjured up. The harmonious relationships that enable some democracies to work, are not a given. Those relationships often require a lot of bad habits to be changed. This is not easy. Just check a history book. Iraq, and most of the countries in the Middle East, are broken. They have been for a long time. We in the West have generally ignored it, because there were no workable solutions that were easily available. Then came the latest wave of Islamic terrorism. This got worse, until September 11, 2001, and then the  prospect of mass murder in our own backyard became a reality. But at that point, the West became divided over the solution. Do we keep treating the terrorists as a police problem, and wait them out? That is known to work. But the threat of even deadlier terrorist attacks made more dramatic moves attractive to many, especially in the United States. That resulted in Iraq, confronting the Arab problems up close and personal. It ain't pretty. But unless the Arab problems are solved, the ugly aftereffects will still be there, and so will the threat of mass murder on the street where you live. The war on terror, and the war in Iraq, are all part of a struggle within Islam. Do we keep on with the same pattern of rebellion and repression, or do we try developing a civil society. Until the Iraqis decided what kind of country they wanted to live in, the war went on. Iraq can either be a turning point in Middle Eastern history, or the democracy can be corrupted, as it was in 1958 when the constitutional monarchy was overthrown by the Sunni Arab dominated military. To that end, the Iraqis are trying to negotiate a long term treaty with the United States that would include an American promise to "coup-proof" elected Iraqi governments. That's novel, but depends on the election process remaining uncorrupted. Nothing is simple in the Middle East.

A Frail Economy Raises Pressure on Iran’s Rulers In one of the coldest winters Iranians have experienced in recent memory, the government is failing to provide natural gas to tens of thousands of people across the country, leaving some for days or even weeks with no heat at all. Here in the capital, rolling blackouts every night for a month have left people without electricity, and heat, for hours at a time. The heating crisis in this oil-exporting nation is adding to Iranians’ increasing awareness of the contrast between their growing influence abroad and frailty at home, according to government officials, diplomats and political analysts interviewed here. From fundamentalists to reformists, people here are talking more loudly about the need for a more pragmatic approach, one that tones down the anti-Western rhetoric, at least a bit, and focuses more on improving management of the country and restoring Iran’s economic health. The mounting domestic challenges, the most serious of which is a grinding period of stagflation, with inflation growing and the economy weakening, have apparently deepened tensions between President Mahmoud Ahmadinejad and the religious establishment he ultimately answers to. And they have helped spur a collective rethinking of Mr. Ahmadinejad’s stewardship as Iran prepares to celebrate the 29th anniversary of the Islamic Revolution this month and to hold parliamentary elections on March 14.

Merck Aids Failure Signals Doom for Africa, U.S. Projects to Prevent HIV The failure of Merck & Co.'s experimental AIDS vaccine may put an end to HIV prevention projects by the U.S. and GeoVax Labs Inc. Merck halted a study, called STEP, in September after an unanticipated finding: people who got the vaccine were more likely to contract HIV than those who didn't. The result, to be discussed at an international AIDS meeting next week in Boston, has stalled human studies of similar vaccines, including one from the U.S. government that shares features with Merck's product. The Merck vaccine was the most advanced of several preventatives against HIV, the AIDS-causing virus infecting more than 33 million people worldwide. Now, Anthony Fauci, the U.S. government's top infectious disease scientist, is waiting for more data from Merck and an international network of HIV researchers to determine whether the government's leading vaccine candidate, called VRC, will be safe enough to test.

Huge pro-secular protest in Turkey More than 100,000 Turks took to the streets on Saturday to protest against government plans to lift an Islamic headscarf ban at universities and to defend the country's strong secular tradition. Protesters called on the government to resign as they gathered at the mausoleum of modern Turkey's founding father Mustafa Kemal Ataturk, a symbol of secularism in the overwhelmingly Muslim country. Military authorities who manage the mausoleum said 126,500 people demonstrated. Turkey's Islamist-rooted ruling party submitted to parliament this week a draft amendment to allow the Islamic headscarf in universities, making good on a six-year-old electoral promise. It was to be voted on next week. The reform was agreed to after weeks of bargaining between Prime Minister Recep Tayyip Erdogan's governing Justice and Development Party (AKP) and the far-right Nationalist Action Party (MHP). The two parties easily have the two-thirds parliamentary majority required to amend the constitution, but debate over the potentially explosive issue is far from over. Defenders of the country's strict separation of church and state, including the army and senior judges, see the headscarf as a symbol of defiance against Turkey's secular system. Leading Turkish academics Friday also warned that the country's secular system was under a "serious threat."

Politics and Policies

You, Economics and the Elections

And Then there Were...Two: Vision ? Leadership ? Politics !

America sours on free trade We are a nation crawling into a fetal position, cramped by fear that America has lost control of its destiny in a fiercely competitive global economy. The fear is mostly about jobs lost overseas and wages capped by foreign competition. But it is also fueled by lead-painted toys from China and border-hopping workers from Mexico, by the housing and credit crisis at home, and by the residue of vulnerability left by 9/11 and the wars that followed. Americans were willing to experiment with open borders during the exuberant 1990s. Today that mood has darkened. We are turning inward. Especially now, as the U.S. economy sputters, we are on the verge of becoming a country of economic nationalists. That may be hard to imagine if you are reading these words from the aisle seat of a packed business-class cabin on one of those new nonstop flights to Guangzhou or Mumbai or Abu Dhabi, the numbers on your company's latest deal flashing on your laptop screen. It may be hard to imagine, too, if your factory can't keep up with orders for diesel engines flooding in from Beijing or electronic parts requests from Brazil. Despite a continued massive trade imbalance, U.S. exports grew 12% last year, providing a cushion against the painful housing downturn. Yet for several years average Americans have increasingly felt that they're running in place. Median household income in 2006, at $48,201, was barely ahead of where it was eight years earlier. So the prospect of a recession has made the anxious middle class even more so. Coming in a presidential election season, the approaching storm clouds have turned the economy into the No. 1 issue on the campaign trail. Fear is a potent force in American politics, and Democratic Party leaders have astutely tapped into rising voter unease about globalization.

The Faith to Outlast Politics Politicians from both parties have come to realize that faith-based programs are indispensable even if they are not miraculous. The president’s original plan called for making federal grants and vouchers more readily available to the thousands of religious nonprofit organizations that provide job training, affordable housing, after-school programs and other social services. The initiative prescribed $8 billion in tax credits and new spending, including at least $700 million in a “compassion fund” to benefit exemplary programs. It was designed so that small congregations and ministries that had long served needy neighbors on shoestring budgets — and not just large, national religious charities — could get their fair share of government aid. It did not happen. The number of faith-based organizations receiving a federal grant rose from 665 in 2002 to only 762 in 2004, according to a Rockefeller Institute study. A program that was projected to finance mentoring for 100,000 children of prisoners has so far paid for only 33,000, according to the White House. Over the past six years, federal grants to faith-based programs have shifted away from the local “armies of compassion” praised by Mr. Bush and toward large, national organizations with religious affiliations. Every nonpartisan study has concluded that the initiative has not delivered the grants, vouchers, tax incentives and other support for faith-based organizations that the president originally promised.

Posted by dblwyo at 12:53 PM | Permalink | Comments (0)

About Spring of last year all the various candidates were running around comparing themselves to Harry Truman, who for those who don't recall, left office in disgrace after having not only stood up for his principles but being proven right in the long run on most of his calls. This Winter the new standards of comparison is Ronald Reagan, who as much as I disagree with some of his policies and all of economics, nonetheless not only stood for principle and won the Cold War. But did as much as any President short of a major national crisis restore our Faith in ourselves and willingness to dig in and work.

If you look back at Reagan his principles, and as it turns out his policies - which much more subtler and well thought thru than he was given credit for at the time, were based on years on of reading, thinking and giving speeches and testing his ideas in the public forum. If you look back at the great Presidents of past trials (Washington, Lincoln, Roosevelt/Wilson, FDR, Harry/DDE) they, by and large weren't looking back to a golden age and promising to be the second coming. Their principles and actions were the result of years of sustained action in a gradually evolving direction. And they adapted to the times, adopted the new when they had to, but steered a course according to a pretty constant start. Now that's Vision and Leadership. Not whatever we're getting now.

BtW - don't just take my word for it. Check out the Wiki post Historical rankings of United States Presidents and see where these various folks, including Reagan stand historically. Particularly some of the more recent surveys as we've learned more about Truman, Eisenhower and Reagan. So consider the following as a template for evaluating the readings below. And the candidates we get down to the final stretches.

In Search of Reagan Despite their valiant and transparent efforts, the 2008 G.O.P. candidates have been unable to recreate the alchemy that transformed Ronald Reagan from a 1940s B-movie actor into an icon of the Republican Party. It is not just that Messrs. Huckabee, McCain, Romney, Thompson and Giuliani lack Mr. Reagan’s charm. None has applied himself as long and as assiduously to marshaling ideas and developing a political base as Mr. Reagan did, honing an ideology that both fed on and nourished the growing conservative movement of his time. Of the main Republican contenders, none has built a national movement. Mr. Reagan came to the 1980 campaign as a known quantity with a studied consistency of views dating back more than two decades. He had a record of electoral success in the nation’s most populous state and valuable experience from two losing campaigns for the Republican presidential nomination. He was also blessed with an unpopular opponent in Jimmy Carter, the Iran hostage crisis, a stagnant national economy and a restless electorate. He was also consistently underestimated by his opponents and by many analysts, who dismissed him as a washed-up actor, an ignoramus and a tool of the rabid right. Unlike today’s candidates, Mr. Reagan, in his career, did not hark back to some imagined golden Republican era two or three decades earlier, nor did he invoke the name of some sainted G.O.P. forebear. (It’s hard to imagine who that might have been.) He took a clear message, honed in hundreds of after-dinner speeches and radio commentaries, and adapted it to his time.

General & Special

Gail Collins: A Voter’s Guide The Democrats: One minute they’re not even speaking. The next thing you know they’re at Thursday’s debate smiling and whispering in each other’s ear. (Use of the word “agree”: Obama, 7; Clinton, 5.) He says they’re friends forever. Which is actually more than we, the voters, require. The Republicans: The unbending John McCain takes on the deeply bendable Mitt Romney. Think G.I. Joe vs. Gumby. Hard to believe that so many of us actually get to vote in a presidential primary Tuesday. If you’re in Virginia or Texas, we are hoping that this thing goes on long enough for you to get your turn, too. Feel free to ask last-minute questions. I am an independent and looking for a president with integrity. Should I vote for John McCain or Barack Obama? Didn’t we all swear to stop picking the candidate who would be most fun to go on a picnic with? You’re torn between the guy who’s been against the war from the beginning and the guy who’s willing to stay in Iraq for 100 years? Between the guy who wants to pay for a $50 billion-a-year health care program by eliminating tax cuts for the wealthy, and the guy who wants to keep the tax cuts and pay for them by cutting the budget? Get a grip.

Politics and Policies

Why I Love the Horse Race Though I watched the Democratic debate, I’ve read very little post-debate commentary today. So I don’t know who “won.” But as I was watching them last night, I stopped thinking about who was winning or losing. Instead, I found myself marveling at their combined performance. The entire debate – certainly the most substantive one in my lifetime – was a collective advertisement for the Democratic Party. Whatever else it achieved, the clash of these Titans made the Republican field look small, petty, and tired. Democrats should feel proud about both the caliber of the candidates and the level of the policy discussion on display last night. It confirmed how much I enjoy primaries – especially this one. Frankly, I’ve never agreed with those who belittle primary races, or feel above picking sides. For obvious reasons, these races are extremely important – and historically consequential. But what’s less obvious is how interesting they are from a purely aesthetic perspective. The horse race we’re witnessing is drama of the highest order – pure political theater. And while emotions will surely run high in the weeks to come, political junkies in particular should take a step back and enjoy the beauty of it. Not beauty in the sense of flowers and butterflies, but in a higher, more human, aesthetic sense.

• The Voters Revolt A funny thing has happened this primary season. Conservative voters have not followed their conservative leaders.
• A Look at the Numbers Common themes have emerged, despite a still forming consensus about nominees.

Charlie Rose (video): A discussion about the Presidential election with Joe Klein of Time and Jonathan Alter of Newsweek. Today (January30, 2008) Democrat John Edwards has left the race for the White House, leaving only Obama & Clinton as candidates for Democratic nomination.

Gen-Y in Sync on Hot Issues Gen-Yers may be as divided as their parents when it comes to choosing the next president but on the “hot button” issues they’re surprisingly in sync. A survey of 18- to 29-year-olds showed nearly 32%, across all political persuasions, preferred Sen. Barack Obama of Illinois. His main rival for the Democratic nomination, Sen. Hillary Clinton of New York, followed closely with 26%, according to Peanut Labs Inc., which conducted the survey via social networking sites. On the Republican side, former Arkansas Gov. Mike Huckabee came in third at just about 8%, while Rudy Giuliani, the former mayor of New York who withdrew from the race on Wednesday, came in fourth. The poll of 1,070 has a four percentage point margin of error. While the horse race mirrors national uncertainty in choosing a presidential candidate, Gen-Y tended to be more unified when it came to controversial issues from abortion to Iraq.

Across parties, 55% agreed abortion should be kept legal, 55.1% opposed a ban on same-sex marriage and 76% strongly opposed the war in Iraq. Though the economy tends to be the No. 1 issue on the campaign trail, domestic issues — health care, education and poverty — were most important to 30% of the younger crowd. Economic concerns were second, with 24% ranking it as most important. Of those eligible to vote, 91% said they planned to do so; Peanut Labs noted that “would make them the deciding demographic in November.” Gen-Y tends to lean Democratic, with nearly 45% identifying themselves as Democrats; nearly 28% independent and 27% Republican.

The Party Animal Either Plays Well or Fights Well On the eve of Super Tuesday, pulling apart consensus and orthodoxy, two perennial styles of politics and government in the United States. SOMETIMES the simplest of arguments can reveal the deepest of divisions. Take the dispute between Senator Barack Obama and the Clintons over the legacy of Ronald Reagan. The episode began in Reno, Nev., you will recall, when Mr. Obama told an editorial board that Mr. Reagan was a president of ideas who had moved the country’s politics. His ideas weren’t necessarily good ideas, as Mr. Obama framed it, but they were transformative. That may sound like a straightforward statement of history. But the Clintons pounced on Mr. Obama for presenting the icon of the red team in a positive light. It all might have sounded like a parody of our constricted political discourse had the controversy not been so revealing of a profound split that is now quite apparent in both parties on the eve of the largest day of delegate selection ever (half of all the Democratic delegates and better than 40 percent of the Republican delegates to their respective nominating conventions will be picked on Tuesday).

Call it a split between whether politics should be a pursuit of consensus or an effort to enact a party’s fundamental ideas, its core orthodoxy. Each party’s nominating fight boiled down last week to a choice between two candidates: one who argues for a politics that reaches across party lines and looks to identify common ground within the broader electorate; and one who states his or her first principle as representing the traditional party base by drawing firm ideological lines.Mr. Obama versus Mrs. Clinton in the Democratic campaign.

The Case for McCain One year ago, when voters' roundly repudiated Republican representatives and put Nancy Pelosi in the Speaker's chair, it was hard to have much optimism about the future of the Grand Old Party. Not only had the G.O.P. been bested on the hustings, but many loyal Republicans thought that this defeat was deserved. The party of Lincoln that had once stood for able integrity didn't seem all that able or all that honest. Twelve months later, Republicans have more right to be optimistic. The Democrat primaries have become a nasty brawl focused on the politics of identity. The party of Jimmy Carter will nominate a candidate for the world's most important executive position without significant executive experience. By contrast, the Republican field is led by three extraordinary men who have all had important achievements. Just as importantly, these three candidates are moving the G.O.P forward, creating the hope that the Republican Party will again be associated with freedom, competence, and honor. Frank Rich: The Billary Road to Republican Victory, McCain Hangs With Moderates , Volcker Joins List of Obama Backers

• The McCain Transition But somehow in the midst of all this frenzy, McCain has to transition from being an underdog to being a front-runner. He has to transition from being an insurgent to being the leader of a broad center-right coalition. He has to transition from being a primary season scrambler to offering a broader vision of how to unify the country. By the end of next week, McCain could be the de facto leader of the Republican Party. The McCain staff is acutely aware of the responsibility this entails, and what it will take to operate at the next level.

Obama Makes `Defining Moment' With Rhetoric Evoking Kennedy, King, Reagan Barack Obama is making his mark on U.S. politics as the most memorable orator since Ronald Reagan, even if he doesn't win the Democratic presidential nomination. The Illinois senator has energized crowds, garnering praise from Democrats and Republicans alike for an oratorical style that focuses on his sense of mission and touches only glancingly on policy. Obama and longtime front-runner Hillary Clinton are locked in a tight race, with two primary wins each. His appeal to voters is fueled, in part, by his speeches, which have earned him comparisons to John F. Kennedy and Martin Luther King. By contrast with Obama, Clinton, 60, largely devotes her speeches to detailed descriptions of policy, from the alternative minimum tax to health insurance for self-employed realtors to U.S. policy toward Bolivia. As he prepares to compete with her in the Feb. 5 Super Tuesday primary contests in 22 states, Obama may need to take a page from her playbook and use his speeches to display his own grasp of policy rather than his command of rhetoric.

• The Kennedy Mystique Something fundamental has shifted in the Democratic Party, now that a throng of Kennedys has endorsed Barack Obama.
• The Edwards Effect So John Edwards has dropped out of the race for the presidency. By normal political standards, his campaign fell short. But Mr. Edwards, far more than is usual in modern politics, ran a campaign based on ideas. And even as his personal quest for the White House faltered, his ideas triumphed: both candidates left standing are, to a large extent, running on the platform Mr. Edwards built.
• Susan Eisenhower, `Lifelong Republican,' Backs Obama as Candidate of Unity

CAMPAIGNING IN POETRY: IS THERE INFORMATION CONVEYED IN THE CANDIDATES' CHOICE OF WORDS?*

The process by which voters choose a candidate may be driven by policy differences but can also be driven by appearance (Benjamin and Shapiro [2006]), gut feelings, likeability, or even subconscious reactions and associations. The 2008 campaign has been particularly notable for its vigorous debates, closely contested primaries but also a lack of strong policy differences within each party. In fact Fred Barnes of the Wall Street Journal went so far as to dub this "the Seinfeld campaign," implying that it's about nothing, at least as far as substantive policy differences go. Following methods developed in political science and the humanities, we use textual analysis to unearth additional information about each candidate. In particular we try to quantify which candidates are running the more negative campaigns and we try to identify which candidates have word choices that make them most like historical political figures (and in some cases great orators) like Martin Luther King, Ronald Reagan, John F. Kennedy, Winston Churchill, Lyndon Baines Johnson, and Joseph Stalin.

Posted by dblwyo at 03:42 PM | Permalink | Comments (0)

Well if the polls are to be believed the state of the economy is not only first place but pulling way ahead. While the primary purpose of this blog is to focus on current affairs in general that means being responsive to the issues at hand as well as pursuing lines of inquiry that need some attention. So we've already put up a couple of other posts with links, references and pointers. The week's interesting readings/links on economics and economics policy are below as well as some links to prior posts. But a blogging friend recently sent me a question and it made so sense to post my response since it provides some context. And the readings beyond the break provide a pretty good survey, IMHO, as to the issues, stakes and consequences. Notice btw that while the economy is strengthening its' hold on the #1 position you're not hearing much from the candidates about. At least that makes sense (no Canute telling the tide to stop won't keep it from coming in).

Q: So far the best I’ve been able to come up with is that “the new stimulus plan is reparations for the people that don’t work as hard as other” lol but quickly abandoned that line when the thought of offending anyone popped into my head lol.

A: EEEkkk - don't do that. Not least of which it's wrong. There's two kinds of economics - small-scale (micro) and large-scale (macro). Both have a set of principles that have been painfully learned and tested but it's not science in the sense that physics is. It's more like biology - things move and change.

The big problem with the macro-economy is it moves in cycles - think of tides - to certain natural rythms. Everytime everybody thinks they've repealed the laws they discover it's like ordering the tides to halt.

In the long-run there's  a certain natural limit to the speed of the economy. It was generally taken to be about 3.5%/yr but has likely dropped closer to 3% or less. If you push too far above that limit you get inflation. If you fall too far below it you get too much idle equipment and unemployed. While we've learned that unemployment can't be completely eliminated, otherwise you trigger inflation, it can be "mitigated", that is keep the damage from getting to be too bad.

Every onece in a while (think Great Depression) the machinery really seizes up and all the gears grind to a halt. For reasons we only partially understand. Japan got itself in trouble with a bubble in the 80s which burst but has now spent 15 years not recovering and damaged their society badly. We could have had the same problem after the tech boom but sidestepped it but at a cost.

The cost was two seperate bubbles in housing and credit which are now in the process of leaking. We're going to do thru a downturn but what the stimulus package is designed to do is keep it from tipping over into a major problem but won't prevent it. The problem is is this a 3-bucket fire when the package is 1-bucket and the Fed rate cuts another. Which leaves us a bucket short.

If you'd like to get a little more background on business cycles and how the economy works try this posts on another blog:

http://llinlithgow.com/bizzX/2007/12/weigh_the_world_works_understa.html

http://llinlithgow.com/bizzX/2007/12/wtw_part_deux_patterns_cycles.html

http://llinlithgow.com/bizzX/2007/11/slowmotion_slowdown_more_on_gd.html

Prior Posts

WRFest 20Jan08(Economics): Oops...Recession Ahead

Pump Priming, Rates Cuts and Crameritis: More on Economic Outlook

Economics & Public Policy Readings

U.S. Economy Grew at 0.6% Pace in Fourth Quarter, Dragged Down by Housing The U.S. economy teetered on the edge of a recession in the fourth quarter as home construction fell the most in 26 years and Americans cut back on spending. Gross domestic product increased at an annual rate of 0.6 percent, down from 4.9 percent in the prior three months, the Commerce Department said today in Washington. The pace of growth was half that forecast in a Bloomberg News survey and the slowest since the first quarter of last year. ``We're on the verge of a recession,'' said Nariman Behravesh, chief economist at Global Insight Inc., a Lexington, Massachusetts-based forecasting firm. ``The consumer really is tapped out. The housing numbers are going to keep getting worse, at least through mid-year.''

Is US entering Japan's nightmare? Japan's bust started with a real-estate boom, lax lending and the propping up of financial firms -- and its recovery took a decade. The Fed's rate cuts keep the US on the same path. Japan's bust started with a real-estate boom, lax lending and the propping up of financial firms -- and its recovery took a decade. The Fed's rate cuts keep the US on the same path. Ben Bernanke's Federal Reserve increasingly looks like it's headed toward a repeat of the errors that took Japan into a decade-long banking crisis and economic slump, beginning in the early 1990s. Welcome to the United States of Japan, where growth slows to a crawl, the stock market goes nowhere and savings earn nothing. Just in time for the retirement of the baby-boom generation, too. It would take Japan's economy, stock market and real-estate prices five more years to recover. The final result was more than a decade of slow or no growth in the Japanese economy and in Japanese asset prices. By giving banks the hope they can dodge rather than bite the bullet, the Federal Reserve has created the possibility that what would have been a very painful but short lesson for the banks could turn into a long-term drag on the financial markets and the economy. If banks lend less because they're spending so much time watching their past mistakes that they shudder at the idea of adding loans to their balance sheets, if nobody trusts the prices for distressed assets, so big parts of the financial markets remain frozen in place, if consumers and corporations with decent credit can't get new loans to fix bad ones or to expand production or consumption, then the economy will run slower than its potential. And if the Japanese experience is any indication, it will run slower for a very long time. Slower economic growth and the accompanying low returns to investors from bonds and stocks would be a big problem for a U.S. economy that faces the huge challenge of paying for the looming retirement of the baby-boom generation. All of which puts me in the very odd position of hoping to see another round of painful write-offs from the big banks at the end of the March quarter. That would help me believe we're still on the road to putting this mess behind us in a matter of quarters, rather than years.

Stop behaving as whiner of first resort It is easy to lose sight of the overall picture. Main Street consumers have overspent and over-borrowed and are unable to meet their obligations. The fact that households may have so behaved because they were enticed by “teaser loans” does not change the facts; it only assigns blame. Consumption has been above sustainable levels and needs to adjust down, whatever view one has about the responsibility of adults over their financial decisions. The adjustment of private consumption to sustainable levels is necessary, but is likely to have a negative influence in the short run on the growth of aggregate demand, of which it represents more than 70 per cent. It is hard for this adjustment to take place without bringing down the rate of growth of gross domestic product, possibly to negative numbers. It will also lower the US external deficit and put downward pressure on world growth. That is a consequence of the imbalances accumulated over five years of unprecedented world growth. Returning to a sustainable path is good for the US and the world economy over any horizon that assigns some value to what happens after 2008. Sustainable growth is not the consequence of an unsustain­able consumption boom but of the progress and diffusion of science, technology and innovation – which show no sign of slowing down. An efficient adjustment to the US over-consumption imbalance (and Chin­ese under-consumption) in a way that does not hurt longer-term growth should be based on compensating for the decline of US consumption with an increase in domestic investment and in consumption abroad. It should not be based on giving the US consumer more rope with which to hang himself.

America’s middle classes are no longer coping The fact is, middle-class families have exhausted the coping mechanisms they have used for more than three decades to get by on median wages that are barely higher than they were in 1970, adjusted for inflation. Male wages today are in fact lower than they were then: the income of a young man in his 30s is now 12 per cent below that of a man his age three decades ago. Yet for years now, America’s middle class has lived beyond its pay cheque. Middle-class lifestyles have flourished even though median wages have barely budged. That is ending and Americans are beginning to feel the consequences.

Two Cheers for Wall St. There is roughly a 100 percent chance that we’re going to spend much of this year talking about the subprime mortgage crisis, the financial markets and the worsening economy. The only question is which narrative is going to prevail, the Greed Narrative or the Ecology Narrative. The Greed Narrative goes something like this: The financial markets are dominated by absurdly overpaid zillionaires. They invent complex financial instruments, like globally securitized subprime mortgages that few really understand. They dump these things onto the unsuspecting, sending destabilizing waves of money sloshing around the globe. Economies melt down. Regular people lose jobs and savings. Meanwhile, the financial insiders still get their obscene bonuses, rain or shine. The morality of the Greed Narrative is straightforward. A small number of predators destabilize the economy and reap big bonuses. The financial system is fundamentally broken. Government should step in and control the malefactors of great wealth. The Ecology Narrative is different. It starts with the premise that investors and borrowers cooperate and compete in a complex ecosystem. Everyone seeks wealth while minimizing risk. As Jim Manzi, a software entrepreneur who specializes in applied artificial intelligence, has noted, the chief tension in this ecosystem is between innovation and uncertainty. We could live in a safer world, but we’d have to forswear creativity. The Ecology Narrative is not morally satisfying. I wouldn’t bet on its popularity as a backlash against Wall Street and finance sweeps across a recession-haunted country. But the Ecology Narrative has one thing going for it. It happens to be true.

My Birthday Wish: Not Burdening Our Children My birthday wish is for all of us to stop asking what the government can do for us today and to focus instead on what we can do to prepare the economy for our children. What worry me are the problems that we will bequeath to our children. Long before I was born, Franklin D. Roosevelt established a compact among the generations. Families had long cared for their elderly members, but Roosevelt federalized that responsibility in the form of the Social Security system. Social Security is sometimes viewed as a pension plan, but it is mostly pay-as-you-go. Around the time I started grade school, Lyndon B. Johnson expanded the generational compact to include health care for the elderly. The Medicare system increased the payroll tax, but only modestly at first. Health care technology was far more primitive back then and, as a result, less expensive. By 1968, when, like my younger son today, I was in third grade, the payroll tax for both programs had risen to 8.8 percent. Today, the payroll tax for these programs is 15.3 percent, far higher than the programs’ creators ever imagined. More worrisome is that this 15.3 percent is nowhere near enough to maintain solvency in the future. When my generation of baby boomers retires in large numbers and starts claiming benefits, spending on these programs will far outstrip revenue at the current tax rate. Two problems are working in concert. The first is demographic. Because people are having fewer children and living longer than past generations, the number of working-age people supporting each elderly person has fallen and will continue to fall. (But I am doing my part to fix this: I have three children.) The second problem is that the cost of health care has risen significantly and is expected to continue rising.

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