Current Affairs « The Ramblings of An Eternal Student of Life

Sunday, May 17, 2009

Current Affairs ... Politics ...

OK, just two minor points for today.

1.) I must admit that I’m generally impressed with Barack Obama thus far. I don’t agree with 100% of his policies and actions to date, but it’s becoming clear that he is quite intelligent AND politically skilled. A smart guy who knows how to use it. I believe that he is inspired by the fearful responsibility that he was given, and will generally try to do what is best for the nation; I think he is becoming what you could call a “patriot”, and not just another scheming, posturing politician e.g. Pelosi and Specter.

I do wonder, though, about Obama’s relative youth. I wonder if he is overestimating the power of his position and of the system that he is there to direct. He is moving to take on all of the big problems at once; global warming, education, economic recovery, the financial system, the auto industry, health insurance, energy supply, terrorism, Iraq, Iran, Pakistan, Afghanistan, North Korea, Russia, etc. And he’s right that everything is inter-related; you really can’t separate out any of these situations. Still, I wonder what Harry Truman might say if he could be in the White House today. I suspect it might be something like this: “there’s a lot for us to do, and we can’t ignore any part of it, like the previous Administration was doing. But by the same token, we can’t solve it all at once; we’re gonna have to set some priorities as to how and when we tackle these situations”. Yea, a bit of Missouri plain talk might be refreshing right about now.

2.) I haven’t seen the new Star Trek movie yet, but it’s heartening for an old guy like me to know that young people today are getting interested in the Trek concept once more, just as the geeks within my generation did about 40 years ago. » continue reading …

◊ posted by Jim G @ 12:04 pm Read Comments (2) / Leave a Comment

Sunday, May 3, 2009

◊ Swine Flu: Cost of Pigging Out

Current Affairs ... Society ...

The Mexican swine flu, which scared the jeebers out of millions of people, doesn’t seem so scary after all. It’s starting to look like your run-of-the-mill flu. It got off to a nasty start in Mexico, but that may be because a lot of people there avoid or have trouble getting to a doctor. There’s still a lot of folk medicine going on in those little villages. So, the American supermarkets and drug stores may soon be able to restock their shelves with anti-microbial hand lotion and face masks. As a sidebar, this reminds me of the run on duct tape a few years ago, after the government released a report about how to survive if a terrorist releases radiation or deadly germs near your home. (I.e., the report said to tape big sheets of plastic around your windows and doors.)

There’s another little side-bar going on in the liberal blogosphere right now about the pig farm in Mexico where the current swine flu might have originated. (I can’t say whether this side-issue is also happening on in the twitter-osphere; the attention spans there are probably too short for it.) Some reporters and Mexican officials are tracing the new flu to a village named La Gloria, which is near an industrial food production farm run by Smithfield Foods – yes, an American corporation that produces and sells pork. Actually, Smithfield Foods is the largest pork producer in the world. Smithfield denies that their pigs were involved, saying that they are clean — none of them showed any signs of having the latest flu strain. Of course, you’ve got to wonder just how thoroughly they looked and tested; and whether the local health officials were willing to risk angering the gringo outfit that probably comprises 90% of the local job market and economy.

Personally, I don’t seek to blame Smithfield Foods alone for the flu; they’re probably running their pig farms like most any other industrial pig farm, no better and no worse. Who I do blame is us, we Americans who can’t think outside the box about our diets. I am a former meat-eater who became a vegetarian about 15 years ago, and over time I’ve seen more and more evidence of the stress that meat consumption places upon the world. Meat consumption today is big business, a product of international corporations which grow, process and serve most of the meat eaten in America and in other developed nations. The stress from it includes poorer health in old age and the resulting burden on medical resources (reflected in soaring health care and Medicare costs); and increased energy use (fuels needed for growing animals, transporting them and refrigerating them) and the global warming greenhouse gases they produce. It’s a bit harder to get fat on a balanced vegetarian diet; and grains, beans and veggies certainly use less fuel and have a smaller “carbon footprint” per calorie consumed. And now, it’s starting to look as though ham and bacon and spare ribs encourage the development of super-bugs that could take down a whole lot of people.

Why is this? Modern pig farms, like any other kind of industrial food-animal facility, try to maximize their efficiency by jamming animals as close together as possible. Also, pigs have genetic DNA structures that in certain ways are closer to human genetic structures than with most other animals (hmm, what does that say about us???). A whole bunch of pigs jammed together, tended by low-paid human workers who may not have such good sanitary habits, become a central hub for infectious diseases that could affect humans. They present a lot of opportunity for viruses to do what they do naturally — i.e., mutate, change their own genetic codes a bit. So you have all these pigs exchanging germs with humans and each other, each pig incubating millions and millions of different types of germs. This gives these germs new chances to develop even more variations, which affect their ease of transmission and what they can do to you once they reach you. Most of these virus variations are failures; they die off quickly. But every so often, by luck of the draw, a new combination occurs that can spread easily and can do some real damage to humans.

If you had a pig in the forest who developed this new super-bug, it probably wouldn’t get far. But a pig jammed together with hundreds or thousands of other pigs will almost assuredly spread it to the other pigs, who in turn will then spread it to the humans who tend them (or who live near-by in villages like La Gloria, possibly by insects). Oh, and another thing — pigs crammed together in farms also interact with birds, and we know that birds are also pretty good at developing flu viruses that can affect humans. The pig farms can’t keep birds from landing near their pigs (or roosting in their living areas) and depositing their droppings so that pigs can breath or ingest the more successful avian germs strains. Well, that’s another head-start that these pigs get in developing germs that can really knock human beings for a loop.

It’s kind of like having a house with a door that opens with a six-digit code number. Every day you punch in six numbers on the door panel, and if use the right code, it lets you in. You set the code number, which can be any number from 000000 to 999999; i.e., there are one million possible number combinations. Let’s say that there’s a bad guy in the neighborhood who wants to get into your home and rob everything and then kill you during the night. The house is pretty secure, and the only way the robber can get in is to punch in the right code number. Let’s also say that the robber only gets one chance each night to punch in one number; he doesn’t know the number, so he guesses. And he’s very persistent; he keeps coming back each night, trying another number.

If we assume that he has no idea about what number you would use, nor whether you would use some kind of pattern (like 212121) or just select a number randomly (like 598830, perhaps), then on average it will take him 500,000 nights to come up with the right code. Let’s see, that’s 1,369 years. I’m not a good math guy, but you could also come up with probability bands, e.g. something like a 90% chance that it will take him at least 100 years, etc. (Not sure of the exact number, but it would be something like that). Obviously, there’s only a one-in-a-million chance that he will finally break in and kill you on any given night. So you decide, OK, I can live with that.

But let’s say that things change, so that the robber can try out a whole lot of numbers every night; then his chances get better and better. And let’s say that he also gets some info about you, on what kind of number you might select. Based on your past decisions, he knows that you are likely to use a subtle pattern in the numbers, e.g. 791827 (the second, fourth and sixth number are in descending order). Say that the bad guy figures out what that pattern is, and is smart enough to use it to narrow down the list of possible numbers. Now this robber is a whole lot more dangerous. That’s the difference between a thousand pigs wandering around in a forest, occasionally being hunted and eaten by a human, and a thousand pigs jammed together in an industrial factory-farm in a third-world country. Viruses have a much better chance with such a pig farm of finding the right code to “break in and rob the human house”. The odds are being stacked in their favor.

So perhaps we got off light this time. The birds, pigs and people in Mexico have cooked up (thru the enhanced trial-and-error process going on at pig factories such as Smithfield Foods) another new virus, which has some “legs”. It has the right “code” to spread around in people; but it doesn’t have the punch to do more-than-average damage. In reality, humans are like a house with more than one door and door code; the robber (virus) might figure out the code to get in thru the outside door, but might not get the code to the master bedroom where you sleep. Thus you won’t be killed. BUT, with pig farms giving these “robbers” more and more chances and more head-starts regarding information structures (from the viruses they exchange with humans and birds), sooner or later a really deadly virus will emerge.

That’s the trade off for those delicious spare ribs at Chili’s or that affordable Easter ham from the local supermarket or that bacon / ham McMuffin at Mickey D’s. Don’t blame us vegetarians when the big avian-pig-human virus finally does come knocking at your door.

◊ posted by Jim G @ 11:19 am Read Comments (2) / Leave a Comment

Wednesday, April 29, 2009

◊ Three Twittery Thoughts

Current Affairs ... Politics ...

Tonight I just have three quick thoughts to offer. First off, kudos to President Obama for his commitment to increase government funding for scientific research, made in an address this past Monday to the National Academy of Sciences. President Obama is increasing the government’s role and the government’s cost quite radically, and the only way for such spending levels to be sustained without triggering a taxpayer revolt is to grow the economy. Scientific research is a good long-term investment to support such growth, something that pays for itself many times over. So, good move, Mr. Obama. I also like his proposal on developing a fast train network; that can also help meet the goal of stimulating economic growth while cutting down on energy use and carbon emissions.

Second, regarding Senator Arlen Specter’s conversions to the Democrats: that certainly was NOT a profile in political courage. Specter is pretty much just a rat jumping off a sinking ship. I’d have much more respect for the man if he had stayed in the Republican Party and had taken his lumps (i.e., getting beat in the upcoming GOP primary in Pennsylvania), and at the same time devoting himself towards moving the Republicans back towards a more centrist position. He would have done the nation more good that way.

The Republicans seem mostly interested in pursuing the niche agendas being put forth by the party’s conservative rump. That cost them dearly in the last election, and may cost them even more dearly over the next 4 or 8 years. Eventually, the moderates will win out and the GOP will start singing a different tune, a tune that admits the importance of most Democratic priorities (e.g. health care, global warming, energy independence, education, poverty) but proposes “lighter government” solutions. If Spector had the bravery and foresight to have affiliated himself with the younger Republicans who are beginning to question the failed Reagan / Bush paradigms, if he committed himself to providing mentorship and support for a new generation, I would have taken my hat off to him. But no, that just wasn’t Arlen Specter. As to the Democrats: when you bring a dog with fleas into your house, you know what happens.

Finally, just a note about Twitter, currently the rage on the Internet. I don’t pay much attention to it, but I do agree with other commentators that it reflects many of the worst things about the net and about modern life in general. I.e., extremely short attention spans and thinking horizons. Maureen Dowd of the NY Times recently took time off from her on-going love letters to Barack (and hate letters to his critics), to interview Biz Stone, the founder of Twitter. It’s a great article, where Ms. Dowd artfully and humorously shows just how wonderful it is not to be restricted to bleeps of under 140 characters. And today, I heard on the radio that around 60% of people who register with Twitter quit within one month. But hey, that’s what happens when you cultivate your customer base among people who don’t have much patience. What you planteth, you eventually soweth.

As to swine flu — let’s just hope that it turns out to be not so bad after all, at least for a relatively well-off population having the benefit of good public health measures and modern health care. Of course, the fact that increasing numbers of Americans don’t have affordable access to modern health care is not a positive factor. Let’s hope that a relevant benefit of universal health care — i.e. the ability to better control an unfolding epidemic and avoid what Mexico is already going thru with swine flu — will NOT be grimly illuminated because of this disease.

◊ posted by Jim G @ 9:16 pm Read Comments (2) / Leave a Comment

Friday, April 24, 2009

◊ Cap and Trade? Not Yet

Current Affairs ... Economics/Business ... Public Policy ...

I’ve been getting up to speed lately on the carbon cap and trade issue. Up to now, I generally thought it was a good idea, given that something has to be done about greenhouse gasses and global warming. I wasn’t sure that now was the right time, given the big economic mess that we’re in; it seemed better to wait another two years to take on an expensive government program. But overall, cap and trade sounded like a good way to go, once our nation is fully back on its feet.

Since then I’ve learned more about cap and trade. And I’ve become convinced that the whole damn thing needs to be chucked. It sounds like a good idea from a distance, but once you get a close-up look at how it would work and what it could do to our economy over time, it becomes clear that there are some HUGE downside risks. President Obama needs to go back to the drawing board regarding global warming.

I won’t fully explain C+T right here; a good starter explanation is available on this web site, as a PowerPoint slide show. And there are some variations to it. Basically, under the Obama version, the US government would set a number of tons of carbon emissions that could be released from US territory each year into the atmosphere (mostly from combustion of fuels, but farm animal flatulence is actually a significant source). Every year over the next 40 years or so, the target amount would go down. And (in theory), everyone who causes carbon gasses to be released into the atmosphere would need to buy a permit from the federal government to do that. Those permits would be sold by the government at auction, but you could also buy them on a secondary market, sort of a big EBay. If you put out more carbon gas than your permit allowed, the government would fine you, maybe send you to jail. That’s the theory.

So the government only issues permits good for so many tons per year. That’s the “cap” part (and also the TAX part, since you have to pay the government for them; this is how Obama intends to pay for the big expansion of government that he is now carrying out, without raising income taxes). The “trade” part comes with the secondary market; some people or corporations who buy them then decide that it’s cheaper for them to reduce their emissions, so they sell their excess permits at a profit (to others who aren’t so lucky as to be able to cheaply reduce their carbon gas footprint). Supposedly that makes the scheme most efficient, from the overall social welfare perspective.

Unfortunately, there are plenty of things that make the scheme quite inefficient. First off, to truly reduce carbon emissions in the least-cost manner, a cap-and-trade system would need to apply to everyone. And I mean EVERYONE, because virtually everyone burns or does something that throws carbon up into the air. But Obama’s system will not apply to EVERYONE. So not everyone will have the same incentive to reduce carbon. And that will cause economic distortions, inefficient uses of resources.

First off, here in the USA, the politicians will draw a line as to who does and who doesn’t have to buy permits to create carbon gasses. The average person who drives a car or cooks a meal or owns a home and heats it with anything but electricity creates on-site carbon gasses. I do it everyday, you probably do too. But Obama would not be very popular amidst the voters if he told us that we now need to figure out our yearly carbon impact and buy permits for it, or face fines and punishments for driving to work or cooking a meal on the stove or keeping warm in the winter. So the average citizen will be exempted. (A straight-up tax on carbon fuels based on their greenhouse gas content would get around this problem; but it would get shot down because it is clearly a TAX; Obama’s Auction/Cap/Trade system might get by, but only because it doesn’t SOUND like a tax, even though IT IS).

Obviously, the big carbon sources such as utility electricity generators and chemical manufacturing plants will be subject to the permit system,. They would have the technical know-how as to calculate their carbon impact. But what about the in-between cases? Where will President Obama draw the line? What about the bakery up the street? They burn a lot of natural gas (which produces greenhouse gasses, although not as much per BTU as coal does), and maybe some oil too, right on site. And thus they generate a fair amount of greenhouse gas. What about the average restaurant, with all the gas and oil and maybe wood that they burn? What about small charter bus companies? Small construction companies, with all their oil-burning equipment? What about the small dairy farmer or chicken farmer, whose animals spew methane and CO2 just like the corporation ranchers’ animals do? Are owners of mom-and-pop businesses like these going to need to enter the cap and trade market? Will they need to estimate and track their carbon impact each year? Will an EPA / IRS auditor hassle them for allegedly spewing three tons when they only bought a 2.5 ton permit? Ah yes, how will the EPA and IRS monitor gas emissions from each source? In addition to price and resource distortions from exempting the average citizen, the government can either exempt small businesses, and thus allow even more resource allocation distortions; or go after them, with less distortion but at a huge enforcement cost.

Another “EVERYONE” problem in the cap and trade scheme regards how the economic impact will be spread between the rich and the poor. The biggest impact of Obama’s C+T, with its taxation component, will be the price increases it causes for electricity, gasoline, fuel oil and food. Those are products that are made or processed in America by big producers (electric utility companies, oil refining plants, and food processors who use a lot of fuel to make fertilizer, cook / cut and grind farm products, package them in plastic, transport them and keep them cool), and will be most vulnerable to the C+T system. The poor spend much more of their available funds on those basic items than the middle class and the rich. SO, the C+T system will affect the poor in an unfair fashion; as a tax, it is quite “regressive”.

But the biggest gap in the EVERYONE equation is the international gap. Most of the developing economies in the world (the “BRIC” countries, i.e. Brazil, Russia, India and China; plus most of the Middle East, Africa, Latin America and eastern Asia) basically have no interest in making sacrifices to control carbon gas emissions. And they are the ones whose emissions are climbing much faster than America’s and Europe’s, and will soon eclipse the developed world in overall carbon impact. They now manufacture much of the stuff that America used to, e.g. TV’s, refrigerators, washers, machinery, steel, cement, etc. Manufacturing requires burning a lot of fuel, mostly carbon-based fuel. The developing world has access to a lot of cheap coal, which creates a lot of carbon gas when burned; and they want their shot at the good life, as America and Europe have enjoyed over the past 50 years. From what I’ve read, we need to assume that the developing nations aren’t going to get serious about carbon reduction until they have achieved average standards of living equivalent to what we have in the USA and western Europe. And that may be another 10 or 20 years down the road (although it is finally foreseeable, something that could not be said even as late as 1990).

So over the next generation or so, the USA will continue to depend on goods manufactured in China and business services rendered in India, and these goods and services will NOT include a price component to account for their carbon damage. The remaining things and services that we still produce here in the USA will take a beating, as they WILL include carbon damage in their prices. More and more things and services will be bought from overseas, b
eing cheaper, and more and more US jobs will be lost. (Two industries that still make their products in the USA, but might not if the price differential with foreign manufacturers goes up due to cap-and-trade, are the chemical and paper industries; and the already-battered US auto industry might only contract further from this).

That will NOT go unnoticed by the politicians. At some point, it’s clear that they will respond to cries of unfairness from the public, and will set up tariffs on imports as to account for what India and China (and most every other developing nation) SHOULD be charging, if they followed our lead with carbon cap and trade. In the short run, that will save US jobs; but in the long run, it will cause an overall loss of jobs, as everyone becomes poorer when international trade is slowed down. I.e., the developing countries will in turn reduce their buying from the USA, e.g. entertainment, fashionable clothes, education, specialized computer applications and equipment, etc.

But the biggest worry is this: we are extremely dependent right now on loans from those developing nations. China, along with the Middle East, is financing a lot of the US government operating deficit. With the economic crisis requiring stimulus packages and deficit spending, we need their loans more than ever. If we put up tariffs that slow down their exports to us, they may well slow down their loans to us. That would cause interest rates to jump up and stay high, which would keep the stock market from growing for maybe a decade or two (as in the 1970s and early 1980s in response to all the inflation and corresponding interest rate jumps caused by oil price spikes). If the stock market stalls over the next two decades, a lot of Baby Boomers — myself included — are not going to be able to retire when we reach 65 or 70 (or 75 or 80, etc.). We’re will try to work until we drop, which will keep new jobs from opening for young people. EVERYONE would be hurt by this.

What I’ve just outlined is the worst-case scenario. Under that scenario, the USA would take a big economic hit over the next 25 years just as China and India are rising in power, economically and militarily. The USA would lose its status as a world superpower. We would not be able to support the world-wide military establishment that we now do. We’d need to get used to being pushed around by other nations, as we would no longer be the big kid on the block.

Some people, perhaps many Obama supporters, think that might not be a bad thing. But it certainly would be different than today. It certainly would affect the lives of we average Americans, often in the wallet and pocketbook, and mostly for worse and not for better. And it would certainly limit what the USA could do in terms of spreading its ideals and values (such as liberal democracy) throughout the world. Again, some people think that our overall civic values and virtues have been permanently corrupted, and that we really don’t have anything to teach the world regarding politics, economics and philosophy at this point. I believe that these people have a point; but from what I’ve seen in my lifetime, the alternatives out there can be so much worse. Our ideals of personal freedom and open markets as guided by laws and regulations promulgated by a limited representative government, might take a real hit if the USA grows weaker and poorer — they might even decline right here at home (some will argue that they already have).

There is also a best case scenario, of course. Should things fall into place, the US and its expanded government would lead the way to cost-efficient, low-carbon energy and industrial technologies. BRIC and all the other developing nations will soon adopt and adapt these technologies, on competitive economic grounds. Our advanced solar panels and wind turbines and other high-tech green-goodies will turn out to be the lowest cost way to make power and products. The need for protective tariffs in the USA will thus fade away. At that point, maximum world trade will resume, and at the same time carbon-based greenhouse gasses will subside as global warming is contained. Global prosperity will jump and standards of living will resume their growth track in the USA, after a pause for a decade or so. American youth and the the science-technology establishment will rapidly respond to President Obama’s challenge to come up with green technology that beats the old carbon-based way of life. The USA would thus still be a great world power, if no longer THE world power. The world would be grateful for our foresight and our bravery in leading the way to a much better and fairer economic system; they would then take us much more seriously in terms of adopting our democratic political institutions and our visions of freedom.

My point is, Obama is taking a HUGE crap shoot with his cap and trade proposal. The future of our nation really is on the line here. The gains could be tremendous, if the dice roll the right way; but the losses could have equal magnitude. The world, including our comfortable life here in suburban USA, could become much poorer and darker if the green technologies that we develop aren’t as wonderful and transforming as we hope. Some intelligent people are arguing that wind and solar and bio fuels have inherent energy limits, and will never get so cheap as to convince people in Asia and Latin America and the Middle East to voluntarily put aside all the cheap and dirty coal, oil and wood that they have access to. In a well-thought out article, Peter Huber of the Manhattan Institute argues that we should assume that the developing world will continue to burn carbon, and that we in turn will have to follow (or risk severe economic decline and political diminution on the world scene); about the only thing we can do to fight global warming is to direct our collective techno-genius towards airborne reduction schemes on a massive scale.

As I’ve written in my blog many times, the global warming problem is real, and the consequences for our world are great. But we also need to consider what conservatives like Huber speak of, i.e. the need to “keep the fire burning” behind our nation’s best and most enlightened social values. The conservatives are not wrong in contending that the world around us is still a dark, cold and hostile place, in so many ways; and that a weakened American could do less and less to counter that. Before our nation rolls the President’s cap and trade dice, we might want to stop and think about this some more — let’s make sure we’ve considered all the alternatives and scenarios and side-effects, BEFORE we take such a HUGE gamble on our future and the world’s future.

◊ posted by Jim G @ 10:40 pm Read Comments (2) / Leave a Comment

Sunday, April 19, 2009

◊ ECONOMICS and INJUSTICE

Current Affairs ... Economics/Business ...

On my daily commute to and from the office, I try to find some intelligent discussion of contemporary issues on the radio. There’s talk radio, that certainly qualifies as “discussion of contemporary issues”. But it fails the “intelligent” test. I’ve found there to be only two good sources: NPR and Bloomberg Radio. So, throughout my 30 to 40 minute drive each way, I find myself constantly pushing the channel button on the radio, trying to dodge the commercials on Bloomberg and the fundraising and “progressive music” breaks on NPR.

Thus, by the time I get to work or get home, I’ve heard a blend of two different views on what is important in this country. On Bloomberg, the important things are economics, investing, finance and business management. On NPR, by contrast, you hear a lot about injustice. You hear stories about exploited workers, both in the USA and around the world. You hear about people struggling without health care. You hear about migrant workers and community activists angry with utility companies. NPR certainly does not ignore the current economic crisis; but their stories and interviews generally have a different slant than on Bloomberg. NPR likes to focus on the injustice of an economic downturn that is punishing working class families who live within their humble means, comparing them to the extravagantly compensated corporate leaders whose unreasonable financial risks helped to cause the crisis, yet whose firms are being “bailed out” by the public (while those leaders continue to demand compensation over a hundred times greater than what the working class family gets by on). The commentators on Bloomberg generally acknowledge such sentiments, but in the context of dangerous populist over-reaction to necessary government stabilization measures.

My heart is with all the NPR reporters and commentators who believe that they are helping to bring about a more just world by streaming a constant parade of woe stories (with the regular Obama accolade slotted in). But the Bloomberg people know the nuts and bolts of the world better. NPR and its clients make a meritorious effort to appreciate the nitty-gritty; but I don’t think they could run a container ship port or a distribution warehouse or replace a sewer system or design a mini-steel mill or finance a computer software start-up firm.

For better and for worse, our economy is directed by a mix of greed and politics; and it’s generally good that NPR questions this, and it’s not always good that Bloomberg doesn’t. But our (partially) market-driven economy must ultimately shape itself around millions of people like you and me who try to spend and save our money wisely and try to earn enough to get by on. The Bloomberg people focus on the stuff that will affect these millions of people in their everyday lives. The Bloomberg people better know the forces and mechanisms of world commerce that have brought millions of Chinese and Indians out of poverty (and which now might cast a lot of them back into poverty, along with too many Americans). The Bloomberg people tell you how the world works (in case you’d like to make some money off of it); the NPR people tell you about the injustices of those workings (in case you’d like to stage a protest or change the government — or go down trying, anyway). But unless the rabid NPR fans arrange a return of the Bolsheviks, or Obama manages to nationalize the major corporations, Bloomberg’s topics will affect more of the masses in more ways than NPR ever can.

It’s a complex and confusing world, and if you want to fully experience that complexity and confusion, flip back and forth between Bloomberg and NPR some morning. You will arrive at your destination more enlightened about both the wonders and pitfalls of the crazy-quilt economic and political systems that somehow keep our world turning.

◊ posted by Jim G @ 5:45 pm Read Comments (2) / Leave a Comment

Thursday, March 19, 2009

◊ Let ’em Have Their (Undeserved) Bonuses

Current Affairs ... Economics/Business ...

It looks as though President Obama has got the country all riled up about the infamous AIG bonuses. To be honest, I’m not terribly upset about them, and I find the current level of public indignation to be rather ironic. Over the past 20 years or so, our politics have become more and more pro-capitalist and a good bit less socialistic. We elected leader after leader who promised to free the business class from the bindings of government regulations and controls; and those leaders made good. As a result, our nation experienced a lot of economic growth over that time. It hardly seemed to bother most people that the lion’s share of the expanding wealth was going to CEO’s and hedge fund managers and others already quite well off, with barely a few crumbs falling down where the most needy reside.

But now, those tigers of industry, who the public willingly unleashed over the past generation, have fallen into a pit and need the public’s help to get out. And in the process of helping them, we are noticing that they are still acting just like — just like unleashed capitalists! Well OK, so what should we expect? We loved them during all those years when unemployment was low and mortgages and credit cards were plentiful, when entertaining and affordable new consumer products were flooding the market. Who cared if the CEO made almost 1,000 times what the janitor was making? Or if your cousin lost her job because she was making 10 times what someone in India wanted to do the same work? Back then, she could always get another job.

Now our economy is in a pit, a pit that almost no one foresaw and most everyone, rich and poor and in-between, participated in digging. Despite all the frustration and inequality, it’s not a good time to get very angry at the investors and industry leaders (like AIG’s management) who seemingly got us into this mess. Angry reactions such as the 90% taxes on management bonuses, and restrictions on free trade, may preclude our economy from rebounding anytime before the third digit on the calendar turns from 1 to 2; just as they once made the 3 turn to a 4 before things got better. And just the sheer hypocrisy of a public that embraced capitalism so unquestioningly when times were good (which was for a long time), and now is bringing out the torches and pitchforks because of a crisis partly brought on by its own stupidity, is quite interesting. Hey, no one forced so many people to take out crazy mortgages on the assumption that housing values would forever rise faster than economic growth rates.

I myself did not previously believe that unchecked capitalism was a boundless source of good in the world, and I still think that we need to move toward a greater role for the government in our economy (albeit, a more intelligently placed role than with past attempts at government regulation and direction). But to suddenly lash out at the capitalists for doing things that we and our government have known about for a long time — that just seems stupid to me. Such lashing out doesn’t get at the real problems, and maybe even makes those real problems worse. I say let the AIG people (and the management of other financial and industrial firms now under federal bail-out) have their 2008 bonus money, so long as they know that it’s their last taste of the good old days. Mr. Obama, Mr. Geithner, Mr. Frank, Mr. Cuomo and their like should be putting full time into solving the present crisis and into designing a viable economic future; and not into punishing the fat cats for a bad twist of fate (especially after the voters who elected those now-indignant leaders embraced the fat cats for many years, when the twists were good).

◊ posted by Jim G @ 9:44 pm Read Comments (3) / Leave a Comment

Thursday, March 5, 2009

◊ Restless Capital in the Real World

Current Affairs ... Economics/Business ...

About a year ago, just as the “sub-prime crisis” was starting to make the news, I wrote a note on this blog musing about the economic paradox of “restless capital”. I said that most students in economics classes (and I was once such a student, as I have a masters in economics from Rutgers) are taught that capital is a good thing, a helpful thing, a thing very much needed for a successful economy. The notion that too much capital could be a bad thing was almost unheard of (and besides, free markets would quickly correct any such capital glut — interest rates would go very low and people would cut back on their savings, they would consume more). And yet, despite low interest rates, the Asians and other big players around the world kept on saving money and offering it to America. So America got stupid. Totally against what’s in the economic textbooks.

The main reason why I didn’t go forward with my academic training in economics after getting a masters degree, despite encouragement from various teachers to pursue a PhD, was that advanced economic classes delved deeper and deeper into abstract math and esoteric concepts. I originally thought that the basic microeconomics classes would be followed by detailed studies on how these concepts actually develop and function in the world of trade, industry, finance, government, etc. The macroeconomics classes would, I imagined, segue into a detailed analysis of what has happened over the course of history as nations and central banks sought to administer policies to stabilize prices and employment and output. When I found out that it would just be a lot more technical language and multiple-regression models, I lost interest.

The current economic crash confirms my hunch that the guys who DID stick it out and gain their economics doctorates never did learn all that much about how things really work. This certainly includes all those Chicago-school economists who said that de-regulation was the greatest thing since sliced bread; but it also includes the liberal Paul Krugman, who often opines in the NY Times that big government is the only way to go.

Krugman (who can be a bit too socialist for my tastes, although he is still a talented academic, a smart cookie) had an article the other day discussing the capital glut and how it helped lead to the economic disaster that we are now in. Per Krugman, what happened was that China, Japan, Korea and the other industrializing Asian countries decided in the late 1990s to discourage private consumption, and encourage thrift and savings on the part of their citizenry. All of their saved money could not be put to work in Asia, so much of it flowed into the world credit markets. (Also add in the capital flows from the Middle Eastern oil nations, who don’t have any good ideas on what to do with all the money they earned again as oil prices rose after 2000; Allah forbid that they might actually try to expand their economies and improve the lot of their common folk).

Interest rates went way down, as plenty of money became available for borrowing and investing. And you know what nation took greatest advantage of this — yea, the good old USA. Soon after the start of the century, we Americans had access to all the cheap capital we like. Sure, it could have been better used to help the poor lands of Africa and South America; but the people who were saving all this money felt that the USA was the safest place to put their excess funds. So what was done with this boon? Well, as Krugman explains, our free market economy and conservative politics collectively decided that it should go into a middle-class consumer binge, including access to gas-guzzling SUV’s for most anyone with any sort of job; and to support deceptively easy terms on real estate financing, i.e. sub-prime mortgages. It all helped to fuel a real estate and consumption spending bubble, which finally got too big and burst. And now we’re paying the price. BIG TIME.

So it’s interesting for me to see just how right I was about the unexpected evils of “wrestless capital”, and to have my suspicions confirmed by a professional economist like Krugman. It’s too bad that all that capital didn’t go into hi-speed rail, green industry, biotechnical research, education, sturdy roadways and bridges, and other investments that would make our country better off in the long run. The Obama administration is now trying to direct some of that wrestless capital into such investments through deficit spending financed by greatly expanded government borrowing. If the Chinese decide to keep their huge flow of savings directed towards US Treasury debt, we might be OK. If they start getting a taste for the good life, like us, then interest rates will shoot way up and the Obama plan will die on the vine. If that happens, WE’RE SUNK.

Bottom line here: economics truly cannot be divorced from politics. That’s why the whole topic of money and trade and commerce used to be called “political economy” in the universities. The free market would have matchless advantages for social welfare, in a test-tube situation free of political forces. But the real world is not like that. As such, the academic world needs very badly to get back to studying economics in the context of politics, and society, and government, and history. I.e., the real world. If it had, then perhaps America wouldn’t have given up on governmental economic leadership just when other governments were offering us the huge gift of overly cheap capital. We let our free markets feast on this irresistible gift until they got sick and broke down. (I believe that will be how the Bush-junior years will be remembered fifty years from now). We can’t give up on open markets and capitalism, they do provide a lot of innovation and choice; but we also need a collective mechanism to keep it from getting drunk and stupid. Let’s hope that the economists and the academic institutions that train them start focusing a bit more on the real world and the lessons of history.

◊ posted by Jim G @ 8:13 pm Read Comments (2) / Leave a Comment

Sunday, February 22, 2009

◊ The FWREC Economy

Current Affairs ... Economics/Business ...

This past week was pretty bad for Wall Street. The stock market dropped around 7%. Analysts believe that investors are losing hope of our economy making a comeback within the next year or two (my favorite source of such analysis is Bloomberg radio). The soaring price of gold indicates that a lot of people with money are thinking “great depression 2”.

I don’t have any cheerful thoughts to offer in response to that. Unfortunately, the American economy doesn’t seem to have an “engine of growth” ready to go right now, set to pull all the other sectors out of the ditch. (Wall Street has obviously lost confidence in the Obama Administration’s ability to do that, despite the financial stimulus package.) Over the past 10 years or so we had the real estate sector, personal consumption and the internet/technology fad to keep things bubbling. In the long run, America still has some cards to play: it still has the best education infrastructure and a strong tradition of creativity and innovation. We can still sell those strengths to the world — once the world is ready to buy again. Remember, this economic crisis is world-wide. For now, the fizz is gone, the economic champagne has gone flat.

All I can contribute right now is a semi-witty acronym meant to summarize how we got here (some might say it’s “quasi-witty” or “pseudo-witty”, or not witty at all!). That acronym is FWREC: Finance, World-wide, Real estate, Energy, and Consumer demand. Economic analysis is a dime a dozen these days, so I’ll just give a quick synopsis of our current “FWREC’d” situation.

F – Finance: Our generally unregulated financial system came up innovations like mortgages without income checks, down payments, and for the first two years, without principal and full interest payments. And credit cards were given away like candy. And then there are the secularized investment instruments that spread such mortgage and credit card debt over thousands of investors according to complex rules; these are now known as “toxic assets”. And mix in all those default swap agreements from the insurance companies. It all seemed so safe, so solid, so interconnected. Unfortunately, no one could see that all taken together as one, this was a house of cards ready to collapse once the right gust of wind came along. And come along it did.

W – World-wide: America and the world are now extremely tied-in and co-dependent. In many ways that’s good. But when America, the biggest source of global economic demand and the biggest receiver of global investment, goes down, the whole thing goes down. Again, the system had a tipping point that hardly anyone foresaw. Until the “black swan” landed.

R – Real estate: Real estate brings out the best and worst in people. Families that own their own homes tend to take more pride in the neighborhood and contribute more to civic life. HOWEVER, real estate also brings out a lot of greed and short-sightedness, both on the local and national level. Our political system assumes that real estate is an unlimited good, and encourages it (via tax deductions and money supply expansion and lending incentives to banks) beyond the point of economic rationality, both on the part of homeowners and mortgage lenders. And now the chickens have come home to roost — the dark side of real estate has reared its ugly head; i.e. foreclosures, bank failures, toxic assets, and rapidly declining consumer consumption. Unemployment is boosted because workers in declining cities like Detroit can’t sell their homes and move elsewhere in search of jobs. Furthermore, the hunger for large real estate plots in the exurbs has locked us into development sprawl and the high energy demand that comes with it — the next FWREC factor.

E – Energy: Oil prices are pretty low, at the moment. However, this recession began over a year ago, when oil prices were at record levels due to supplies leveling off while demand increased in the developing world (China, India, Brazil, etc.). That no doubt helped to drag our economy down. Experts say that as soon as the world economy starts picking up, oil prices will skyrocket once again, slowing or possibly stalling a fledgling recovery. Life and business in today’s USA was designed around cheap oil; due to suburbanization and development sprawl, you need a car (and preferably an SUV) to get to most offices, homes and shopping places. It will take many years to redesign the USA landscape in favor of denser urbanized settings, where mass transit (or cycling or even walking) can be used to accomplish the basics. For the next decade, we’re trapped in a high energy consumption mode that will sap a lot of strength from our economy.

C – Consumer demand: With all the easy money and chimeral real estate wealth (everyone assumed that real estate prices would continue to rise come what may), families assumed that there was no need to save money, and no problem with taking out more debt to spend on the finer things of life (vacations, SUV’s, entertainment systems, home improvements, etc.). Hyper consumption was caused by finance (easy loans), the world (below-cost consumer goods from Asia), energy (oil was relatively cheap until two years ago) and real estate (no need to put aside for a rainy day if your home value rises significantly each year); and each of those institutions in turn grew because of that consumption. It was an upward spiral based on good impressions; but it was not backed up by real economic productivity.

And so the party is now over, and we all face a lot of uncertainty. I’m still employed at present but will have my salary cut via furloughs. As to my hopes to retire comfortably in 10 years, that too is up in the air, given that the current value of my retirement funds have been cut in half. I’m not sure what I will do if it all gets worse. All I can do right now is to curse the FWREC that our economy has become. But as to blaming any one person or institution, e.g. George Bush or the Federal Reserve or the big banks or the CRA — no, it was collective stupidity. Let’s hope that some collective wisdom seeps in because of all this.

PS, here’s a good article from The Atlantic on what the long-term effects of the FWREC will be.

◊ posted by Jim G @ 9:49 am Read Comments (3) / Leave a Comment

Tuesday, February 3, 2009

◊ COMMERCIAL BOWL

Current Affairs ... Society ...

I’m not much of a pop culture guy, even less of a pop culture critic. It’s hard to properly criticize that which you don’t know much about. But I have seen enough TV commercials in my time, so I’m going to take a crack at saying a few things about the commercials on the Super Bowl last Sunday. I re-viewed them since the game via hulu.com, just to make sure I know something of which I will now attempt to speak.

Overall, I found the Super Bowl commercials to be quite unpleasant and depressing. OK, part of that is age. The ad companies are aiming at a younger audience during the Bowl, not at people over fifty. But still, I was once under 50, and back in those days, I found commercials to be much easier to take. Why? It’s hard to put a finger on it, but if you’re gonna try to be a pop culture critic, you’ve got to try. So here goes.

Back in my youth, the commercials didn’t seem to be trying so hard to get one’s attention. They seemed to be more subtle, more mood-setting, more pleasant. The best ones tried to make you feel good, as to get you in a good mood about the product being pushed. They used music and cinema to set a positive tone. Some of the best commercials were all mood, e.g. Michalob beer commercials featuring tunes by Eric Clapton and showing dusky scenes. Or they used subtle humor and wit, e.g. the old Alka-Seltzer ads (“can’t believe I ate the whole thing”, or the professional pie-eaters at work). Or they came up with a catchy jingle, some of which I still remember 40 years later (“Schaefer is the one beer to have when you’re having more than one”, or “There’s just one Schlitz, nothing else comes near; when you’re out of Schlitz, you’re out of beer”).

Sure, there were plenty of cheap-o commercials shouting out for cheap furniture or food blenders that double as wood routers and tile cleaners. But when a sponsor spent big money, they usually got a smooth, soothing, subtly entertaining product. And if it wasn’t subtle, it wasn’t dumb and puerile either.

I guess that the public has lost much of its attention span since then. Today, the most expensive commercials need to be a bit outrageous, even slapstick and gross (by my standards). There’s plenty of violence and eschatological humor. Sex of course is pushed to the limit for family TV. Music and rhyme are not important. Taste is pretty much gone. If there is any mood, it’s dark and cynical, self-aware and self-depreciative. Life as one big video game. That’s what I mostly took away from the Bowl ads. The big money and big audiences involved with Bowl air-time seem to propel a “race to the bottom”.

But let’s go over some of these ads, to see if this is truly the case.

Go Daddy, the “five showers a day” sexy woman being watched on a web site by some young guys: I find it interesting how web porno has now become “cute”.

Doritos, the crystal ball: A celebration of mayhem, with an old guy getting hit in the crotch. Yea, my fifth grade class would have loved this.

Pepsi, McGruber / Pepsuber: A semi-witty parody of high-tech adventure shows, with a bit of self-reflective cynicism regarding the big-sell; i.e., an anti-commercial commercial. But in the end, it’s just another big fireball explosion, just more “harmless annihilation”. Good old fashioned cynicism triumphs.

Audi, the car theft chase: More video-game mayhem, but made cute by the fact that nobody really gets hurt or dies, e.g. when the guy on the motorcycle wipes out.

Pepsi, “I’m Good”: Even more “cute violence”, more human injury just for fun.

Bud Lite, “Drinkability on the slopes”: Mayhem, continued. A skier hits a tree and some picnic tables at high speed, but once again it’s all made cute; no massive head injuries, just a body cast that “the chicks all love”.

Doritos, “Crunch Power”: Mayhem once again. Once again, we watch as a human body takes massive trauma (being hit by a fast moving bus), But everything’s fine here in ad-world, the guy is just a bit dazed and sprawled out on the windshield. Wow, how amusing and entertaining . . .

Career Builder, “Signs That You Need a New Job”: Sort of witty at first, but the guy in the bikini shorts puts this one back into the 12-year-old humor zone. The repeated physical abuse of a Koala Bear gets the required gratuitous violence in.

Denny’s, “Thugs”: an ominous “Godfather/Sopranos” scene over breakfast, but the plan to kill are interrupted by an enthusiastic waitress applying canned whip cream to the pancakes. Cute in a way, but sad that even Denny’s has to resort to mortal threat in order to sell old-fashioned comfort food.

Coke, “Palmero and the Kid”: Nice at first, a kid giving an NFL star a soda. But no, they couldn’t just leave it at that; Palmero has to get violent with the corporate guys who object. (Oh, yea, it’s just an NFL tackle, even though in real life such a move would slam your head into the concrete so fast that you’d never wake up.)

Bud Lite, “Meeting”: A guy sitting in an office meeting gets hurled out of a third-story window. Then gets up and brushes himself off; no severed spine, no shattered hips. Sorry, that’s just not the way that gravity works on this planet.

Monster, “desk under the animal’s butt”: OK, here comes the classic fourth-grade eschatological humor.

NBC, LMAO Clinic: Oh yea, NBC is so outrageously funny that you need a doctor to reattach your butt. Eschatology 101, continued.

Teleflora, “Boxed Flowers at the Office”: How nice, the crummy boxed flowers from a competitor are in a bad mood and insult and degrade the woman they were sent to, right in front of her co-workers. Not very uplifting; after that ad, I wouldn’t want any flowers at all, no matter how fresh and quickly delivered.

Bud, “Conan in Sweden”: Yuck, anything with Conan is a non-starter. A machoed-out Conan doing weird stunts is even worse.

H&R; Block, “The Grim Reaper”: death and taxes versus the little guy. OK, no one dies or faces severe injury in this one. Maybe there’s even a bit of wit (a rare commodity during the Super Bowl) when the reaper leaves with a fatal threat, then comes back and asks for parking validation.

Castor Oil, “The Grease Monkeys”: Strange days, indeed; to sell something bland like motor oil these days, you gotta get weird (monkeys invade a suburban home garage).

Pedigree pet adoption service, “Weird Pets”: It’s sad to see a good cause, like finding homes for unwanted dogs, needs to send out ostriches to threaten senior citizens, and have a rhino take down a living room wall just to get some attention.

Kelloggs Frosted Flakes, “Growing Fields”: The background reality is stranger here than the growing crops linking arms together in the video. Kellogg’s wonderful sugar bombs are helping to feed the child obesity crisis, so the PR folk back at corporate HQ started a donation program to build or improve playing fields in middle-America, as to help real-life kids sweat off the mega-calories that Tony the Tiger shills to them.

Cash4Gold: OK, here’s one for the older crowd. It’s just a retro 1 AM commercial camped up a bit with Ed McMahon and MC Hammer.

Hulu, “Alien Brain Mush”: This one is another self-parody, an injection of irony on top of retro sci-fi. It’s almost interesting, but it doesn’t hold after Alec Baldwin turns into an alien; the implication always has to be brought home with a sledgehammer at the Bowl.

Bridgestone, “Taters” (Mr. and Mrs. Potato Head take a spin): Well, now we start with the more harmless stuff.

Taco Bell, ”
Guy Meets Cute Girl”: Again, harmless and bland.

E-trade, “Talking Babies”: Again, harmless and bland.

Gatorade, “Mission G”: Again, harmless and . . . oh, wait, that really is Tiger Woods, isn’t it.

Hynduai, “Angry Competitors Now Get Our Name Right”: Once the shouting is over, harmless and . . .

Bud, “The Clydesdale Adventures”: One more time . . .

GE, “Wind Energy”: A boy captures the wind in a bottle to help grandpa blow out his birthday candles. And GE will use that wind to save the world. It’s bland all right, but I’m not ready to say that any message from GE is harmless.

Monster / NFL “Fandom Contest”: How depressing, a reminder that 99.999 percent of us are just specs in a huge crowd. How wonderful that the great NFL God promises to raise one of us up to experience “mega-TV-pro sports-world”, the true definition and meaning of life . . . oh Socrates, where are you now?

Hyndaui, “Assurance”: wait, here’s an old fashioned commercial, with soothing guitar music and artistic mood shots. How did that one get in?

Toyota “Venza”: more modern art and good taste. Well, maybe the car makers get a pass on needing to be brash and gross in hawking their product. I guess they don’t want to seem TOO eager to sell their stuff; they don’t want car prices to crash in this recession.

Pepsi, “Generations Refresh”: Wow, Bob Dylan singing the praises of the military! Talk about big-cola revisionism. I guess it all makes sense if you do stay “forever young”, as the theme song goes. Sorry, I’d rather be getting old but still able to remember what the 1960’s were really like.

GE, “The Smart Grid Scarecrow”: A twist on the classic Ozzian formula, you know, Dorothy and Toto and The Wizard and all that. So, I was wrong; some old-school commercials still slip in. But this is NOT an example of the better stuff from the old days.

Bridgestone, “Mars Explorers”: Actually, this one was a bit like the better stuff from the old days. Someone steals the tires on the Martian planetary rover. Houston, we have a problem.

Priceline, William Shatner in a Wiretap Van Outside Your House: Not exactly the good old days, but not the new junk either. Sort of a witty takeoff on high-tech espionage shows.

Cheetos, “Chester the Tiger”: Well, a little bit gross with those messy pigeons attacking the chatty girl at the next table, but Chester pulls it off in the end.

Sprint, “Roadies On Takeoff”: Finally, a commercial that I really liked! Yea, flying today would be a lot more fun if roadies ran the show. Instead of calling off “V1, V2” as the plane prepares to “rotate” skyward, the roadie pilots yell “let’s rock!”. And then the runway fireworks go off. Cool!

Springsteen and E-Street, “Mini Concert”: Oh, that wasn’t a commercial? That was supposed to be real? Whatever. Bruce was trying a little too hard, but it was nice to see Stevie Van Zant and Clarence Clemmons being them selves. After all the years, some guys hold up.

So, there were one or two good commercials amidst the dross. And the game was pretty good too. But I always feel better somehow after football season is over. Spring and a season of new hope will get here yet.

◊ posted by Jim G @ 10:23 pm Read Comments (3) / Leave a Comment

Friday, January 30, 2009

◊ The Trillion Dollar Question About Obama

Current Affairs ... History ...

I was reading some thoughts from Victor Davis Hanson, a classicist scholar who is also a conservative commentator (say that three times fast!). I.e., he’s a guy who knows a lot about the history of ancient Rome and the Greeks of old. Obviously he has some things to say regarding whether America is in danger of going the same route, i.e. decline and fall after a few centuries of power, achievement and vast geo-political dominance. Mr. Hanson is pretty cautious about it; he’s not saying that America has turned rotten and deserves to get flushed down the tubes. But he is saying that if we’re not careful about maintaining our world power, our individual virtue, our patriotism, and other assorted conservative values, we could. Hanson is not a big fan of President Obama, but he’s not rabidly condemning him either; he seems to be giving Obama a chance, given Obama’s various moves away from doctrine liberalism towards centrist realism.

Anyway, I noticed a passage in one of Hanson’s book reviews that inadvertently summed up the situation in America today. Here it is:

Despite occasional revisionism, the story of Rome’s fall was pretty much universal . . . After some five centuries of imperial domination from the Sahara to the Rhine, and from the British Isles to Mesopotamia, the Western empire collapsed in the late fifth century . . . An exhausted global empire was so plagued by financial corruption, a bankrupt elite, and rural depopulation that few citizens joined the army. Fewer still knew what fifth-century Rome stood for, much less whether it was any longer worth defending.

In this review, Mr. Hanson was NOT trying to argue that America has caught the same infection that Rome had by the fourth century CE; he was actually arguing against two other writers who feel that it has. But look at the modern parallels: “exhausted global empire”, “plagued by financial corruption”, “bankrupt elite”, “rural depopulation”, “few citizens join the army”. Does a majority of our citizens know what twenty-first century America stands for? I guess that most people would say “democracy” and “political freedom”. But then again, the most recent GOP vice presidential candidate couldn’t think of those words when questioned by a newsman regarding the last President’s “doctrine”. (Yes, I’m referring to Charlie Gibson’s interview with Sarah Palin; and recall that when Gibson finally got tired of Palin’s lame attempt to respond to that question, his own answer ALSO failed to include democracy and freedom!).

Yea, I think that Mr. Hanson hit a nail on the head there, even if he wasn’t aiming for it. But as Hanson and many other historians contend, history is made not by anonymous forces but by people and ideas. Can Barack Obama come up with the right ideas to steer our nation’s evolving history back towards goodness and strength? Can he turn it back into something that every citizen can believe in? That’s the trillion dollar question.

PS, I also checked out a nine-part lecture on You Tube by Prof. J. Rufus Fears, another conservative academian who has pondered the parallels between the Roman Empire and the U.S.A. today. Fears seems to be saying that we’ve gone pretty far down the same one-way road to oblivion that Rome took, but it’s not too late yet for us to veer away from it. Fears says that we face a matrix of threats similar to what the Roman Republic faced in the first century BCE, including a debt crisis choking off the economy causing a severe recession; a crippling clash of partisan political forces; and a series of threats from powerful foes and rivals from foreign lands.

As with the late Roman Republic, some of our worst threats come from the Middle East. HOWEVER, the biggest threat to Rome’s future turned out to have hailed from north-central Europe, i.e. from the Germanic tribes. And here’s the jawdropper from Dr. Fears: we too face severe future threats from that region, but need to go another 200 miles to the east: i.e., Russia. Yes, Dr. Fears feels that the end of the Cold War and Communism in the early 1990’s was NOT the end of our Russian problem. He thinks that conditions in today’s Russia are ripe for the re-development of a powerful, barbaric and militaristic dictatorship bent on dominating as much of the world as it can; he feels that Vladimir Putin is already setting the stage for that. He goes so far as to say that Russia could become fertile ground for a new Hitler-like figure! Yikes.

Ironically, Fears believes that the U.S. and Western Europe had a chance in the early 1990s to have prevented this. He implies that had we put lots of capital and redevelopment aid into Russia back then, something like we did afterWW2 with the Marshall Plan in Germany, we could have set the stage for democratic institutions to have finally taken root in Russia (as they did in post-war Germany). But we didn’t, and now we’re watching Russia fall back into it’s old nasty habits. With enough dictatorial mobilization and plentiful access to oil and natural gas, Russia could well re-create the specious prosperity that Germany experienced during the Great Depression, back in the mid and late 1930s.

So, if our economy doesn’t snap back within a year but instead sends our nation into a five to ten year malaise, then the USA is gonna be in serious hot water if the Middle East flares-up again (like when Iran goes nuclear), and at the same time a re-militarized Russia starts taking back what the old Soviet Union lost. Yep, it could be much like what the Roman Republic faced about 50 years before Jesus. How did the people of Rome react? Eventually, they gave in to political dictatorship; Julius Caesar set the stage for ending populist rule, and Augustus later sealed the deal. Is this happening today here in the USA? Dr. Fears said that we don’t have an equivalent to Julius Caesar right now; and that’s mainly because Caesar was so brilliant. George W. Bush certainly tried to become a Caesar, but he didn’t nearly have the brainpower. In the end he couldn’t do all that much damage to American democracy as we know it (thanks to screams of bloody murder from the liberal factions).

However, Dr. Fears notwithstanding, we now have a man in power with Caesar-like brilliance. (Recall that Caesar started out as a “Populare”, roughly comparable with today’s “Democrats”.) Obama got into power partly by repudiating the empire-building tendencies of his predecessor. Nevertheless, if things don’t go well during his tenure and our nation faces the real prospect of serious decline in living standards for almost every citizen, then I could imagine a scenario where President Obama tacitly convinces the citizens to forfeit much of their political freedom, so as to maintain personal, economic and national freedom. (Will the liberals then scream at Obama as they did at Bush? I don’t recall many screams when Obama tossed campaign financing reform aside. Love is blind.) As Professor Fears points out, this choice has been made by many other peoples over a wide variety of circumstances throughout the course of history. It would be a mistake to think “it couldn’t happen here” — given the extremely dangerous economic and international situation that America now faces.

◊ posted by Jim G @ 11:03 pm Read Comments (3) / Leave a Comment

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