As proof that that truth is stranger than fiction, military officials not just admit but boast that they are copying the failed policies of the Vietnam era (WaPo):

But they insist progress is being made.

They also say they already are pursuing a version of the strategy advocated by McCain and other critics. Indeed, for months now, senior officers at the U.S. military command in Baghdad have been using the term "clear and hold" as a shorthand description of their counterinsurgency strategy. The same term was applied by Gen. Creighton W. Abrams Jr. to his Vietnam pacification strategy in the late 1960s and early 1970s, which followed the "search and destroy" campaign of his predecessor, Gen. William C. Westmoreland.

Here is a Republican idea for how to deal with winter heating costs:

The Republican chairman of the House Resources Committee on Tuesday proposed waiving fees on collecting firewood in U.S. national forests as a way to help "families cope with the high costs of home heating" this winter.

Natural gas household heating costs in the U.S. Midwest will soar by nearly 50 percent this winter while heating oil in the Northeast will rise by 25 percent, according to government estimates.

"Rural American families who depend on firewood to heat their homes will be hit just as hard as those who use oil and natural gas," California Rep. Richard Pombo said in a press release.

The war in Iraq is over. Of course some have been saying it for some time, but there is knowing that it is over and knowing that you know it is over. There is a moment when one can no longer hold out the hope beyond a hope. Of course the events described here [Warning: Graphic and Disturbing War Imagery] occurred some time ago. The way societies work is that it is not enough to know, there must be a certain threshold of public awareness. This is what creates the temptation to lie by public officials, that by keeping information beneath a certain threshold of public recognition keeps the public from reacting to it even though "everybody knows". That threshold is now being passed. The feel goodisms of war boosters have been destroyed by the reality of the unrelenting suffering on all sides in Iraq. Now that the President of the United States has to repeatedly try claiming to his own people that we are not torturers the excuses that Abu Ghraib was just an isolated incident is being destroyed by the images finally after so long emerging from Fallujah proving the mass and indiscriminate use of the most brutal technologies of war against civilian populations. This as many have noted now is the same crime we have accused Saddam with. In this moment we have crossed an invisible yet crucial line. The fact that these accusations have been around for some time does not diminish the loss embodied in this moment. Beforehand we merely suspected, now we know beyond a reasonable doubt. Just as a generation ago the images coming from Vietnam in all their brutality and senseless cruelty stripped away the rhetoric of the white-man's burden so too this moment whatever the official lies will be demoralizing. After today more and more Americans will realize that their loved ones and children are dying in a war of brutality waged for the glory and vanity of out of touch leaders. Support for the war already at perilously low levels cannot but gradually collapse under the weight of this realization. It is over.

Paris is burning. The situation far from dying out has become widespread anarchy. This is a grave mistake however. In the long run, there is no more indispensible quality than legitimacy. Legitimacy is never derived from violent or contrived overthrow but from non-violent resistance. Even if violence is to be used, there must be a non-violent and political component to conduct negotiations and lead through moral authority and not sheer force. Yes, Nelson Mandella resisted violently but it was the non-violent pressure of the world in addition to Mandela's own non-violent leadership from within prison that eventually forced South Africa to negotiate a transition of power. Iraq on the other hand is the anti-violence example. Pure violence unleashed by brute force without having established social legitimacy has only led to strife, division, and incipient civil war.

This is why the anarchy in France is not going to lead to anything good. While from an intellectual point of view I understand the failed policies of Chirac's conservative government are to blame (ECB interest rate is 2% with growing monetary supply despite inflationary pressures ... it is stimulative and so cannot be blamed here) the end result will not be a move toward the left and the Socialist party. As anarchy spreads throughout france even moderate and liberal learning French will move toward accepting a hard right-wing crackdown. Without an organized leadership to negotiate with on behalf of the disgruntled as a non-violent alternative there is no political alternative to a harsh crackdown and a suspension of immigration or even deportation. Without an ethical and non-violent leadership to publicize the greviences of the disenfranchised and the jobless and ask for non-violent alternatives the incompetent Chirac and de Villepen governments are able to scape goat organized crime and gangs justifying moving toward a harsher and harsher crackdown using brute force and later extraordinary police powers and the violations of civil rights.

The rioters in France are rightly frustrated but without a context of a non-violent part of the movement to give legitimacy and press for positive social change the resulting situation will not be a move toward the left but a lurch to the right.

Even as we've passed the 2000 death mark Rumsfeld is indicating that a "temporary" increase in troop strength in Iraq is likely. If you put aside the rhetoric, troop numbers over time are going up and casualties are going up and the insurgency is having greater and not lesser impact. The Inspector-General has indicated that the Reconstruction is running out of money. Now Knight-Ridder is reporting that in the last year contractor deaths tripled. These are in the long term, not sustainable trends. The wheels are coming off this thing. However in the short run, as in the next year or two, the actual numbers indicate we are digging in deeper and pouring more not less men in and getting slapped around harder and not moving toward cut&run whatever the popular sentiment is back home. Bush knows this and that is why all his speeches are about justifying sacrifice. It's not the past losses he's referring to, it's the ones we've yet to feel. The trendlines are clear, this is turning into one ugly #@%^*$! quagmire and right now it's still getting worse and not better.

If you think the public is sick of Iraq now just wait a year and project the trendlines forward. Not a pretty picture. That's why Iraq is the right political battle to fight at this time. What the public wouldn't cotton to before the 2004 election they will have shoved into their face by the meat grinder that this war has become. For once the Democrats need to get it right: blame the Republicans before the Republicans put the blame on you. Because politically right now Iraq has turned into a game of musical chairs, and the one without a scapegoat when the music stops takes the blame for Iraq for the next generation.

The first thoughts that popped into my mind were literally Train Wreck. Which is an odd thought I thought since on the surface the Miers nomination was more obviously a flaming crash than this one. If I had to put words to my intuition I think my gut instinct is based on the idea that the deal of the "gang of 14" which "saved" cloture is about to be tested to destruction. The right wing and Bush can't afford the loss of face from another nominee imploding but yet the principle of a fair hearing for all nominess was just jettisonned gleefully in the case of Miers. So it will come down to pure power politics with arm bending like we have seen in keeping open House votes to change individual votes with pressure. We'll run primary challengers against you with national GOP backing for every election cycle as long as you are in office. That sort of thing. We haven't yet seen that kind of tough knee-breaking going on in the Senate. This time, I think we are about to get see some Senators crying because Bad Men are bending their fingers. Which adds up to nuclear option and loss of cloture and Democrats Borking Scalito if possible. Very ugly. Hence my gut sentiment train wreck.

First let me point out that this isn't the first time it's happened. After the Vietnam war Congress made several reforms to the JCS system in 1986. One of the reasons for this was that it was felt that the dependence upon appointment to the President undermined the ability of the military staff in order to give unbiased and accurate reporting. It was for this reason that the tenure of the JCS chiefs were made to be a standard term rather than at the pleasure of the President. However as the Shenseki episode proves, the system is still flawed.

The major reason for increasing the independence of the JCS from the Executive however is not historical but Constitutional.

Never. Or sufficiently long enough at any rate that none of us will see it.

The N.S.A. has kept secret since 2001 a finding that its officers deliberately distorted critical intelligence during the Tonkin Gulf episode which helped precipitate the Vietnam War.

Articles on the above and more such as central banking theory, the economic basis of aesthetics, GDP, higher education reform, and more forthcoming.

Full disclosure: I work in the university system as an untenured instructor, however my criticisms are not based on my lack of tenure. As a matter of fact, it's rather the reverse. The criticisms I will detail led me to personally conclude that the only way I could stay sane was to deliberately avoid the tenure track system.

American universities are declining in quality, period. This is strange because there are more of them than there ever were, but it's harder to get tenure. In addition, tuition prices are rising across the board much faster than inflation. Many have blamed state government for not keeping up with education cost increases, but in this case I agree with the state governments. The American university system is out of control, and the real problems are not disimilar to the problems in corporate America in that executive management is simply gone rogue.

Today I just saw something that flabergasted me. It just bowled me right over. Tucker Carlson had Mr. Wuhl on his show. First of all, Mr. Wuhl is an actor currently on an HBO show. Tucker Carlson introduced him however as a historian. Mr. Wuhl himself objected pointing out he was not a historian. Then they began talking about various topics, including Harriet Miers and second term scandals. So Mr. Wuhl he proceeds to defend Miers. What is his defense? That in the whole history of the Supreme Court there must have been unqualified cronies on the Supreme Court and the nation survived it. Similarly his defense of President Bush was that plenty of Presidents had second term scandals as well. Sure they did. Two of the more recent ones, Clinton and Nixon were impeached for them.

To be honest when Tucker Carlson said he had a historian coming on to his show, I thought he was going to drag on some hoary Presidential Scholar to drag out equivocations from or a revisionist pseudo-historian to rhetorically whitewash and absolve Bush of wrong doing. It stunned me that Tucker Carlson couldn't even get a single wingnut or a shilling pundit to get on his show as a talking head to defend Bush. Instead Tucker got an actor whom in Tucker's own words Tucker "crowned a historian" for the purposes of the discussion. The defense for Bush of the "designated historian substitute" was ... cronyism has happened before and it didn't kill us? I knew Bush was in trouble with his polls and the base, but I didn't realize he was this badly off. If Fitzgerald misses a chance to nail some White House hide to a wall when he has this much political cover, we might as well forget about the rule of law. But my guess is that he will deliver a narrow indictment that he can establish clearly. I'm not one to celebrate before the end of the final quarter but if Tucker's display is any indication and things are this bad this early, and it is still early in the game of stalking Presidential impeachments, then Bush is going to be in real big trouble.

A doctor is quoted by the WaPo:

"If there is an outbreak, we're going to have to rely on the CDC and state governments to put those drugs where we need them. And I don't want them in people's bathrooms," she said.

I'm going to reveal something about how hopelessly archaic and backwards my conservative background is: I'm a closet monarchist. Really. It's not a joke. But it shouldn't be surprising given my family background as landowners and local minor aristocracy. As it turns out, whether or not you believe in monarchy, there are good reasons for wanting to split executive power.

The classical problem of all governments is that over time the Executive branch develops over-weighted powers. The classical solution is to split the Executive itself. For instance, early in this nation's history the Vice President was the runner-up. This made the position of President pro-tem of the Senate actually meaningful as it gave a platform for the Vice-President to orchestrate congressional resistance to the President's initiatives. However with the consolidation of the VP and Presidential office tickets this check and balance was removed.

Hurricane Wilma has become the most intense storm ever recorded in the Atlantic basin and is 'explosively strengthening' at a record pace.

Meanwhile Rice refuses to come clean to Congress over whether or not the Bush Administration is going to escalate with Syria and Iran.

Secretary of State Condoleezza Rice on Wednesday refused to rule out U.S. troops still being in Iraq in 10 years or the possibility that the United States could use military force against neighboring Syria and Iran.

We certainly do live in interesting times.

Part II in my discussion of capital vs. rent, you may wish to refer to previous articles: The Dollar-Oil Standard, American Economic Transition, and Peak Oil? for related references.

We tend to think of ourselves as a “capitalist” society when in truth we are a rentier society, because the problem is that we have tipped the scales away from capitalism and toward renting

What is rent and what is capital? Rent is the economic activity of building and maintaining infrastructure. Infrastructure is organized material and information resources that make other activities possible and whose consumption is principally for a standard of living. Capital is the economic activity of building and maintaining production. Production is the organized material and information resources that create goods and services that is primarily intended to become a surplus. Rent is what you need to get by. Capital is what you need to get ahead. Rent is stability, and capital is progress.

Readers may wish to refer to my Theory of Capitalism post.

The NYT reports that:

Administration's Tone Signals a Longer, Broader Iraq Conflict

I know; I know; trust me, I know!

It's pointless, futile, the biggest mistake of a generation, an endless sink of blood and treasure we can't afford, tying us down, we've already lost in every way that matters, etc. Doesn't matter. Life is unfair. These are the facts. Bush would like to leave. The American people want to leave. But barring an impeachment crisis of President Bush or a sudden collapse of the insurgency, we are going to have at least three more years of this absurdity. I say at least because there is every sign McCain and Hillary the respective front-runners will both drag out getting out for their own reasons. Yea we don't got the troops to do this, as ret. General Barry McCaffery points out by next summer the troop rotation cavitates and implodes. Yea I know we already got a defacto shanghai / poor man's draft going on with aggressive unethical recruiting preying on the most vulnerable parts of society - and it'll get worse as they need warm bodies to rotate into pounding the sand over there. But it's going to happen. This is this generation's Vietnam part II. We are fucked.

There are times in life to blow off doom-mongering. Then again there are times in life to get really concerned. Millenium Bug? Hype. Bin Ladin Determined To Attack Inside US? Watch out. Iraq WMD? Hype. Human-to-Human-Drug-Resistant-Avian-Influenza? Be concerned- right now.

Reuters - 40 minutes ago
WASHINGTON - The feared avian influenza virus is showing signs it can evade the drug considered the first line of defense against bird flu, researchers said on Friday. They found so-called resistant strains in a Vietnamese girl who recovered from a bird flu infection after being treated with Tamiflu. They also found evidence she was directly infected by her brother and not by chickens, a rare case of human-to-human transmission of the virus. [emphasis added]

The Miers nomination is an important event, but not for the reasons which are the usual suspects. George W. Bush's need to install what even those on the right are calling a crony in the highest court in the land is interesting because it demonstrates the depth of his insecurity. All hat George no cattle Bush must be pretty rattled to so openly put a modestly qualified candidate on a highly visible position. If nothing else, it suggests that he thinks things might get worse than even most Democrats have reason to believe at this time.

But that's not the real reason that the Mier's nomination is important. It's the reaction on the right rejecting Miers that is revealing, but not for the reasons typically discussed. The reason why it is revealing is that it shows that the hard right is refusing to settle for mere consolidation of current and near term gains. Their principle objection is that Meiers is not absolutely and nakedly guarenteed to overturn Roe vs. Wade and carry out a pogrom of cleansing left-wing judicial interpretations from the law of the land.

In short the movement conservative "revolution" is still on at least in their heads, and they don't care that the country is having second thoughts and moving away from a hard right ideological sweep. If they want to have it all whether or not there is a popular mandate for them, then that spells trouble, big trouble.

This is a headline from The Guardian, a left-leaning British publication:

Only threat of force will tame Tehran

Britain must stop being soft and use its might to stop terror, says Michael Rubin

Sunday October 9, 2005
The Observer

Tony Blair confirmed last week that bombs used to kill eight British soldiers in Iraq were a type used by Iran's Islamic Revolutionary Guard Corps and groups that it supports in Lebanon.

His words were circumspect, but the point was clear: London considers Tehran responsible for killing British troops in Iraq.

...The best the West can hope for is containment. Diplomacy can repulse the Iranian challenge in Iraq, but nice words alone are insufficient. Deals must be obeyed and promises kept. Sometimes that takes a willingness to use force.

As Stirling commented earlier, Britain has been warned by the EU for going over budget (Businessweek):

The European Union head office cautioned Britain on Wednesday that its budget deficit, over the 3 percent limit set by EU rules, cannot be explained by the nation's economic situation.

Britain is expected to breach the 3 percent of gross domestic product limit for the second time running in 2004-5, warning that its deficit will be 3.2 percent. Britain escaped disciplinary action last year because the EU said the deficit was likely to be temporary.

But the EU executive Commission said Wednesday that the deficit could not be explained since Britain's gross domestic product growth was above potential in the last two years at 3.2 percent in 2004 and 2.9 percent in 2005.

Full disclosure: I could have gone to West Point and was contemplating that once upoin a time seriously as a career choice and was actively recruited for the Marine officer program. Vets and soldiers from around the world have just through circumstance become friends with me over the years. There always seemed to be an undnerlying connection, even with the careerist pricks. Sometimes I think I missed my calling in life, but then whenever I get too sentimental over missing out on a career of legally killing people something like this reminds me of why I wisely chose not to get court-martialed.

This picture from MSNBC just about says it all:

As you can see, the post-Katrina spike subsided but the post-Rita damage to energy stocks has ensured that the general retail trend of gas prices is still slope positive. This indicates that damage exacerbated a consistent underlying trend. Gas is therefore likely to push over $3.00 a gallon nationally averaged on a sustained basis and seasonal fluctuations are not likely to bring it back down.

Billmon has an interesting reference here, which he resorts to snark to reply to:

Do the Democrats Want a Civil War?

As our Sister Toldjah noted earlier, the "indictment" of Tom Delay is entirely bogus - from what I've read, Tom Delay didn't know about the perfectly legal transaction he is accused of conspiring to make. We have now left entirely the field of normal political conflict and entered a twilight world where fantasy is presented as fact and the only standard of conduct is "will it work?". This is not the actions of a political Party engaged in seeking a majority - it is the action of a Party determined to destroy its opponents entirely and sieze all power for itself...it is, in short, the stuff from which civil wars are made.

As many of you here know, I have from the beginning asserted that the incompetence of GWB and his team were going to ruin Iraq. However something happened today which made me think that matters were worse than even I had considered. What happened is that today marked Iraq's first known female suicide bomber.

According to the WaPo:

Sworn testimony as well as two newspaper accounts note that Bonsell and other board members dismissed the separation of church and state as a myth, and initially favored equally teaching creationism and evolution. Bonsell and the board members have denied making these statements or have said they were misquoted. The board meetings were taped, but the tapes apparently were destroyed.

U.S. District Judge John E. Jones directed reporters with two local newspapers, the York Dispatch and the York Daily Record, to testify about what was said in open meetings. The two reporters have declined, citing reportorial privilege, and could face penalties including jail time on Wednesday.

CNN is reporting that three refineries are going to be down for at least two weeks. More analysis based on EIA numbers in addition below.

First I will start out with a statement that some here may not like. That statement is that it is not fair to blame the Bush Administration for the fallout of these hurricanes. As is becoming clear, the American political leadership gambled over decades with a highly vulnerable energy infrastructure and an aggressive global market, diplomatic, and military hegemony. They gambled that they could rule the world and not invest the money to either make their supplies safer or to switch to alternative supplies. It is also a gamble that has been lost. Europe has already had to bail us out after Katrina, and I wonder if even they will be able to do it again after Rita. As a socioeconomic model, it has been proven by the crucible of history to be a failure. The gears of society must keep on turning, the trains must run on time, and to quote Donna's literary allusion the spice must flow. When it is not merely debt that is needed to keep the wheels of a civilization running but diesel it has already been shown to be a failed model.

So it is not fair to blame the Bush Administration entirely, but even though it is not fair it is also fair. So you should do it anyway whole heartedly and without hesitation. You should heap up as much blame as possible, both for political gain and because this unfair accusation is most fair.

From online:

The Corpus Christi Metropolitan Statistical Area (MSA) has a strong industrial base as well as a tourism industry that attracts nearly five million visitors per year. Spanish explorer Alonso Alvarez De Pineda named the city's bay "Corpus Christi," Latin for "Body of Christ," because the bay was discovered on a Catholic holiday, the Feast Day of Corpus Christi. Founded in 1838, the city has evolved from a small trading post. Natural gas was discovered at White Point in 1913, and oil was found in the Saxet area in 1930. These two discoveries, along with the gradual deepening of the ship channel to its current depth of 45 feet, helped make Corpus Christi a major Gulf Coast petrochemical center. The Port of Corpus Christi is now the sixth busiest port in the United States in terms of annual tonnage.

Those who do not learn from history are doomed in the future to repeat the mistakes of the past. The WaPo has a frightening look at the future of Mississippi and Louisiana residents have to look forward to.

Can’t run no more
With the lawless crowd
While the killers in high places
Say their prayers out loud
But they’ve summoned up
A thundercloud
And they’re going to hear from me

by Leonard Cohen

So, what can one person of moderate financial means and no political connections do? Suggestions, anyone?

There is only one and only one thing that you can do and that is to change your own thinking and refuse to accept, let pass as bullshit, or condone by ommission or commission the corruption of society around you. I don't mean rant or rave or burn flags. I mean do nothing. How can doing nothing stop the Bush Administration? It can stop the Bush Administration because we have to understand that we are helping them. It is not a matter of trying to stop Bush and his cronies. It is a matter of refusing to help them.

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows...

Old Black Joe's still pickin' cotton
For your ribbons and bows
And everybody knows

by Leonard Cohen

George Will has a op-ed diatribe in the WaPo. In it, I am sad to say that George Will shreds the last of the once immense respect and admiration that I had for the man. I have read and considered George Will's writing for a long time, and once upon a time he was an influence upon my own thinking as a young conservative. However here he has become an example of everything that I consider wrong with the modern conservative movement and why I think it's clearly taken conservatism down the wrong road. I will outline my thoughts as to why.

Right now Congress is gearing up to spend 100+ billion on Katrina. The first appropriation bill for some $52 billion is set to go for only the first five weeks. That's $1.4 billion a day according to CNN. Meanwhile, according to the Guardian the Iraq reconstruction is collapsing because corruption, waste, and security costs are exhausting funding. What are the chances do you think that we'll be able to throw another $20-50 billion at Iraq now to get it working? Logically, we could just add it onto the national debt tab. Politically, people are already balking at the war and that was before Katrina made them resentful about resources diverted to Iraq.

It was not my intention to blog about hurricane Katrina because as it happens I have a personal conflict of interest. However since facts can be stated without any perception of hypocrisy, I thought I would briefly make an observation about the enormity of the failure of government in this instance. This observation simply requires the comparison of two numbers.

I'm going to be out of town for a few days for a family memorial and to spend the fourth of july with them. I hope everyone here has a great time and that we all spend a day celebrating our liberties. Independence day is a day for remembering how far we have come and what it means to us. Every generation has its challenges, and we must not be moved to either despair or excess by the issues that history and the development of human civilization have seen fit to pose us in our own time. Every generation has seen struggles against foes or difficulties that seemed insurmountable at the time, and even if all did not end happily then at least at the end of the day the better angels of our nature did prevail. Even as we celebrate how far as a nation we have come we too should rest and make ourselves fit to face the controversies of our own day. History is messy, but that doesn't mean that we do or say does not help contribute to a better end so long as we keep the faith. Happy fourth of july all! (P.S. I also figured posting my hedonic adjustment article over fourth of july weekend would probably mean most people would miss it. So it will forthcoming upon my return.)

This just in, Justice Sandra O'Conner the key swing vote on many issues from abortion to death penalty has announced her retirement from the Supreme Court. Many commentators had suggested that the next retirement would be the cancer-stricken Chief Justice Renqhuist but the reliably conservative Rehnquist's replacement by Bush would not have changed the overall balance of the SCOTUS. With the opportunity to replace O'Conner however Bush now has the opportunity to definitely change the balance of opinion on the high court. With many deciscions on controversial issues in recent years including the infamous Gore v. Bush 2000 splitting the high court 5-4 this will almost surely change the trend of Supreme Court rulings. On the other hand, Bush is at the weakest political moment so far in his Presidency with 42% of the public muttering about impeachment in the polls. So in whatever legal battles are to come just as the Supreme Court was pivotal in forcing Nixon to release the notorious White House tapes that brought him down so too if Bush can replace O'Conner with an ideologue he may insulate himself from the reach of legal suits to come and reduce the possibility of impeachment so the stakes are very high even besides considering landmark rulings such as Roe v. Wade.

By now you may have heard that Rice uttered the words "generational commitment" with respect to Iraq. To be fair, she hedged it fairly well which is probably the reason why it hasn't been blown up on the news headlines in huge font. What is most disturbing however is not the words "generational commitment" in the specific instance that she used it, but the drift of our center of policy consensus toward prolonged engagement or even escalation even as the war becomes increasingly unpopular.

Unfortunately we cannot move toward a more sustainable society by turning ourselves into a simpler society. Simpler arrangements or a sustainable lower standard of living are not likely viable solutions to the problems of political economy. While cutting energy usage on an individual scale is well-intended, it is not effective on an aggregate scale. This has to do with the capital costs of civilization. Simpler per capita in the end does not mean a more sustainable macro-economic situation unfortunately as we will see by looking at the case of China.

The story of goldilocks and the three bears has goldilocks sampling the porridge set out for Pappa bear, Mamma bear, and Junior bear. After deciding that one serving was "too hot" and the other was "too cold", goldilocks decides upon the last one as "just right". In the oil markets, Goldman-Sachs and Morgan Stanley two financial giants active in the oil markets have proposed two radically different visions of the oil market one extremely bullish and the other very bearish respectively. The way the real life story ends however is that the three bears will find goldilocks trespassing and have goldilocks for lunch.

And now we start getting people fragging their superior officers in Iraq.

An Army National Guard staff sergeant has been charged with premeditated murder in a "fragging incident" that killed two senior officers at a U.S. base near Tikrit, Iraq, last week, the U.S. military said Thursday.

Fragging is a military term that means the intentional killing of friendly soldiers by another soldier in a wartime setting.

Staff Sgt. Alberto Martinez has been charged with two counts of murder in the deaths of company commander Capt. Phillip Esposito and 1st Lt. Louis Allen of the New York Army National Guard, the military said in a statement.

I don't like to write about Thomas Friedman because I believe that in general there's very little to add beyond the obvious. However he wrote something today that was so outrageous that it overwhelmed my self-restraint. The classic definition of chutzpah is the man who murders his parents and then throws himself on the mercy of the court as an orphan. Today Friedman reached that loathsome level of moral hypocrisy with his op-ed column in the NYT.

Recently there's been a lot more talk about the Downing Street Memo. With Bush's numbers on the war and in general so badly off, there is indeed a moment of political vulnerability. In addition oil and gas prices are back up as the market manipulations that had sent prices lower faltered and oil shot back up to $55 per barrel. All of this makes Bush ever increasingly vulnerable.

So what is going on over there in Europe? How are they reacting to the failure of the French and other publics to ratify the EU Constitution by referendum? Well the answer is that the governing class is not handling it very well. That's the bad news, that they're squabbling over there. The good news is that the market is treating it as an overall trouble on the level of a recession and/or a change of governments. This explains why the governments in question are fighting so hard, they are fighting for political survival with Berlusconi, Chirac, and Schroeder all in domestic trouble and the weakened Blair trying not to alienate his own public.

Hale Stewart wrote a basic introduction to the concept of interest only loans. In it he describes a diagram for a standard mortgage cash flow diagram I have chosen to illustrate.

There are fifteen increments along the bottom of the time axis, meaning that it can considered two year increments on a 30 year fixed rate mortgages. I tried adding some dashed vertical lines as well but they didn't translate from the word editor into MSpaint. This should clarify what he was discussing.

Supply goes up and price goes down for a fixed demand right? So more illegal immigration displaces honest hard working Americans or at least lowers wages right? Not exactly. The reason why is simply because most people when they think of competition think of two body competitions. A vs. B. Home team versus visiting team. It's the philosophy of dualism. It also doesn't describe the real world very well since most competitions are open multi-body contests. It's not really Americans competing for jobs versus illegal immigrants, it's both competing against each other as well as against the rest of the world.

Okay I want to have this out here and now. What I'm talking about is immigration, specifically illegal immigration. First thing is that I'm completely against it. However I want to take on this meme, this insidious and virally devastating meme. What I'm talking about is the idea that opposing illegal immigration is about preserving American jobs. The truth is that there is not one single American job that can be saved by stopping illegal immigration. Not a single damned job. And I can prove it. As a matter of fact, I have better than a reason to believe this. I have a billion plus reasons.

The 'minute-men' are gearing up to "go mainstream". Since sometimes liberals are a little idealistic about what's at stake let me clarify what this movement is about. This movement is about creating a distributed network of cells to arm and train a right-wing paramilitary vigilante force. In other nations where this process is more advanced, the colloquial term of "death-squads" is used instead. The right-wing movement tried to do this back in the nineties with the "militia" movement but that bombed because the members were too freaky. This movement is going for the NASCAR / NRA crowd. While liberals are worrying about Deathsquads in Iraq a movement that is arming and mobilizing an military force to prepare for an internal political coup is forming now. While the liberals are trying to figure out how to win the last election the reactionaries are planning on how to win the next Civil War.

Oldman....just for the record, could you share with me exactly what Dean said that you disagreed with? And personally, I'm more in the Lear camp.

Posted by jon st

Looking through the internet, I stumbled across this gem about journalistic standards.

Look I'm a Dean supporter. I voted for him in the primary. I canvassed for him door to door in Iowa. I cold called people for him on registration lists. Still I winced at his now notorious statement. On the other hand, I know a LOT of Democrats and liberals who are getting sick of having Rush Limbaugh and the Catholic leadership and Fox News and other proxies taking the battle to them all day long and feeling like they don't have a voice that responds back. Liberals should have such a voice, and for all his other merits, that voice is not Al Franken.

However, that voice cannot be DNC chair. If Dean wants to be that attack dog voice, he can't also be DNC chair person. That job is supposed to be raise money, organize support for political races, cut back room deals, keep staffers and lobbyists in line, placate party factions, and unify the party not divide it. That's the way politics works. If Dean wants to do attack dog rhetoric, then he either has to step down or he has to appoint some proxy spokesperson to do it for him ... someone who like Rush who can say it was all "in fun". If he does want to be DNC chair, then he's got to realize that he's got to shut up ... all the better so that they don't hear him coming when he puts the metaphorical dagger in the back of someone politically.

That's the way politics works. Dean has created a lot of divisiveness in the party with this comment and that is definitely not the DNC chair. By all means, let it be said, but by a source with appropriate plausible deniability.

You Dems wanna win? Let's see more Machiavelli and less King Lear.

Are you one of those people who think that people in pain should be able to have their doctors prescribe marijuana for chronic pain? Are you one of those people who believe in States rights and believe that the great state of California should be able to license non-profit pot growing cooperatives? Do you just hate the War on Drugs and the way it is over-burdening our criminal system with petty offenders and is the cause of excessive government intrusion into civil liberties? As it turns out there is somebody who can be unequivocally blamed for this Constitutional mess. His name is probably pretty familiar to you: Franklin Delanor Roosevelt and he was the grandfather of all modern liberals. Republicans have become associated with the semi-fascist intrusive face of the drug war but they only stole their act from the original liberal one.

Canaries were used in coal mines because they were much more sensitive to non-odorous and possibly suffocating gases in coal mines. Every category in life has its bleeding edge, indicators that always turn when a major shift is coming on. The canary in the coal mine of the debt-markets right now are the Money-market funds. This is a confirmation signal that the long-term debt flotation that I discussed in 'The "Crisis" in the Yield Curve' is moving ever closer.

The general rule is whenever Greenspan does anything, nod slowly and surreptiously put your hand on your wallet or purse. I've felt this way for a long time, especially through the glitzy nineties when most liberals couldn't do enough to fall over fawning on Greenspan and Rubin. If the liberal plan for decades has been to solve the issue of exporting jobs by creating a new technological boom, at the very least the Clinton years failed to invest in a new technological wave to come online after 2000. This is not to take away the blame from the Republicans but to emphasize that their witch hunts over Lewinsky and other faux scandals hurt us all more than we could imagine at the time. Clinton was able to keep the government running so people weren't alarmed, but quietly in the background what was happening was that the future was being sacrificed. That meant that after the crash in the NASDAQ there was no "Plan B".

For those who have rejected the Bush family/GOP analogy with that of Emperor Palpatine I wonder if you have heard recently that the leader of the Republic has commissioned a new Death Star?

Taking aim at the United States, Russia’s defense minister Thursday threatened retaliatory steps if any country puts weapons in space and said Moscow won’t negotiate controls over tactical nuclear arms with nations that deploy them abroad, Russian media reported.

“Russia’s position on this question has not changed for decades: We are categorically against the militarization of space,” the Interfax news agency quoted Ivanov as saying during a visit to the Baikonur space facility in Kazakhstan.

“If some state begins to realize such plans, then we doubtless will take adequate retaliatory measures,” ITAR-Tass quoted Ivanov as saying.

Previously I asserted within my piece 'The American Bubble' that there would be collusion up to the highest levels in maintaining the real estate bubble as long as possible. Today we have news from a Federal Reserve official signaling that this is precisely the course that the Federal Reserve intends to take.

“I think we’ve room to tighten a little bit further,” Fisher said, but, using a baseball analogy, added that the U.S. central bank is in the eighth inning of its tightening cycle and entering the ninth, and usually final, inning this month.

At the present time, there is a debate within the United States about whether or not there is a real estate bubble. What people in the general public have not anticipated was that the creaking slow-motion political train wreck of the European Constitution that stumbled today in the French Referendum not only ensures beyond a reasonable doubt that there will be a real estate bubble, but that it will be longer, stronger, and the end far more brutal than could be previously imagined.

A fundamentalist, a hardline Catholic, an Intelligent Design (ID) proponent, a neo-con, a Zionist Jew, and a "moderate" centrist all go to a diner for breakfast. They each pick up a newspaper and spot the same article about a surgery to remove the second head on a two-headed baby.

The Conventional Media Deluded (CMD) outlet the NYT is running an article running down Canada. As the NYT points out there are problems in Canada with regards to trade, business lobbies, and an unspoken problem with racism. It's entitled "Was Canada Just Too Good to Be True?". Of course what the CMD leaves out is that even though every single thing they say is true, that on practically every measure of social progress Canada is still better off or more conscientious than America. At least they still have scandals up there, here we just pass quiet backroom deals to annul the Constitution and everyone puts on a "happy, happy, happy!!!" face. Which of course brings us to exactly why the CMD is running such an article.

Things must be getting pretty bad or starting to have the prospect of looking pretty bad here in the States if they have to start running articles that trash Canada. More and more I hear from people talking about leaving, not the kind of joking that went on before the '04 election of the Baldwin sort but quiet and frank discussions. My suggestion is that if you want to go, start getting your butt in gear now. Also be on the lookout for happy, happy, joy, joy fluff articles expounding on how great it is to live in America and how crappy it is in other countries. If they can't get you to stick with the product on quality they have to crank up the advertising, positive or negative.

The Conventional Media Delusion (CMD) is reporting that Bush wants new powers for the FBI so that it can do search and seizure of papers and evidence without needing a warrent with a judge's approval. Both CNN and the NYT are reporting on the stealthy means that the Bush Administration is trying to get this passed behind closed doors. What neither of them is mentioned is that this is blatantly unConstitutional and unnecessary.

So what's up with the deal to "avoid destroying the filibuster"*? Instead of me performing my normal agitated rant that turns out perfectly accurate and true later but is dismissed at the time because it sounds radical and extreme, let me quote from the Conventionally Media Deluded/Delusion (CMD) in order to emphasis my point with what is still euphemistically known as "objective journalism". The story is that the Democrats are so deeply in their own spin-zone that they can't understand how much Vichy in Vichycrat they've become.

*Expanded from a comment post at Ian Welsh's request

MSNBC has an article out about the emerging tech and engineering culture in China including the "Chinese Silicon Valley" that is being built.

“sea turtles.” That’s the local nickname for the native-born Chinese who receive educations in the United States and return to start companies in China... One reason is that it’s much cheaper to start a company in China than in Silicon Valley. The classic sea-turtle is Charles Zhang, who graduated from MIT in 1994 and returned to China to launch Sohu.com with a few hundred thousand dollars; the Internet portal is now worth half a billion dollars. I met one sea-turtle at last month’s Asian Technology Roundtable in Beijing who explained his departure from Silicon Valley very simply: “Chinese engineers work harder for less.”

A pregnant girl was banned from attending her graduation at a Roman Catholic high school. Instead she announced herself and walked across the stage at the end of the ceremony. Her relatives were then escorted from the church. The school had tried to keep her out of the ceremony. Why is this minor drama important? First because they knew who the father of the child was but they let him participate in the graduation ceremony. Second of all because to me this is symptomatic of why I cannot respect the positions of the Roman Catholic hierarchy in the public sphere. It is because even though I have many friends who are Roman Catholic that I believe that the dogma being promoted by their leaders and being pushed as public policy is hypocritical and unjust. Argue what you will about the propriety of having a pregnant woman be a part of a religious high school's public ceremonies, it is unconscienceable that she was stigmatized but the father was not. In extension this is a reflection of why I cannot respect the Church's positions on abortion, because I see them as completely and unevenly imposing behavioral sanctions on women disproportionately over men. I cannot believe that this kind of naked sexism is moral or socially just.

The primary characteristic of a republic as opposed to a democracy is that a republic can be distinguished by a system of representative government whose representatives are restricted by a binding process tradition called a Constitution. The primary advantage of a republic is that it guarentees liberty by limiting government excess. In order to do this it imposes a higher burdern than a simple majority vote on issues that apply to everyone or which may create a legacy for future generations. As odd as it might seem, the very foundation of the Constitution of the United States was based upon the denial of popular will and limiting the power of popular representatives.

Liberals and progressives still are playing by "the rules". The NYT reports that at NPR, the Bush Appointees are telling local broadcasters to stop playing so much news, appointing censors, and to play more music instead. I'm all for music but I doubt that these Bush appointees are really primarily interested in a revival of jazz and classical music.

The Christian Science Monitor reports that the round of base closings is concentrating military bases and forces in the South.

Hi there, this is oldman. Just letting you know I am still out there working on my stuff. However it is our fate to live in interesting times. A lot of things are coming down the pipeline. Iraq is starting to internally crack. Afghanistan is having popular uprisings against the US. The showdown over the nuclear option on the filibuster is coming to a head. Bolton is headed up towards a possible confrontation in the Senate. Iran is wrangling with Europe and could be referred to the Security council momentarily and the slow-motion train wreck that is the North Korean nuclear dialogue proceeds with more lurches. And we just got over the British elections. While I am still working on my GDP piece, my supply/demand analysis, alternative energy cost-reduction projections, and writing on the aesthetic component of economics as a theoretical commentary all of these works are somewhat dull compared to the other issues rightfully drawing people's attention. Be assured when I see more attention span slack and people more ready to contemplate long term issues I will start posting my work again. Until then we should hang on because this summer might be a bumpy ride.

As I've mentioned regarding Greenspan's Hail Mary Pass, the plan in the works is to float the American economy on a housing bubble. There are several factors at work which make this housing bubble much more likely to be destructive than previous ones. One of them is the astonishing spread of home equity lines of credit.

A "Hail Mary pass" in American footbal lingo means taking a single very long pass down the field in the hopes that one of the receivers will catch it and score. Usually it's used only as a last resort late in the game when you hope to decisively score and rebound from behind. The reason why is that the odds aren't very good of course. Recently Stirling has written on the return of the 30 year long bond. I have also written about the possibility of a real estate bubble. Hale Stewart has offered a well informed and reasonable counterview. However I will argue below that clear macro-economic and financial market signals indicate that not only is Greenspan aware that there is a real estate bubble but that he is deliberately generating one with his policies in order to manage the total economy as part of his deliberate strategy of which the return of the long bond is just a part of. This strategy is an attempt to shift the United States back to long term financing in order to deal with indefinite deficits and managing increased debt as the de facto policy of the United States of America even as the de jure policy remains officially deficit and eventually debt reduction.

Something happened in the 1990's that happened again. As the stock market rose, especially the NASDAQ, the most foresighted people began looking at valuations and hinting that a bubble might be in the works. Greenspan agreed and began raising interest rates, but was forced to lower them to create a softer landing for the Asian Financial Crisis of the late 90's. However as the stock market grew and grew more and more calls for a "bubble" went out. However as the sky "did not fall" immediately after such warnings, they were increasingly disregarded. Of course the more experienced hands all realized that a bubble must go beyond where you think it can possibly go before it bursts.

Something quite extraordinary however was the large number of conventional economists and financial commentators that made a great deal of publicity and often money cheerleading this bubble. Until the very end they created a yes-man chorus encouraging investors to pile on an already zombie bull-market. Now the same thing is happening to the real estate market.

If you're one of those people worried about the high cost of medical care, don't be. Globalization has a solution for that too! Just as cost-cutting and offshoring services has reduced costs to consumers in every other economic sector in America soon too healthcare will be moving overseas. How is that possible? Read on...

In the 1970's first we had inflation and then came lowered growth expectations. This forced the first wave of offshoring development. At the time the great offshoring bogeyman was Japan not China. Three decades later this process of offshoring now ensures that it will be lowered growth expectations and then later inflation that we experience.

Recently there has been a push for China to revalue its currency the yuan. There may be internal reasons of political economy why this is not just unlikely but potentially impossible to do in an orderly fashion. The reasons have to do with why China weathered the Asian financial crisis and how that could be catching up to it now.

As a person who is naturally broad about the shoulders and on the stout side of fit I am glad to finally hear some sense from studies of healthiness. According to the NYT scientists are reporting that being mildly overweight is actually healthy for you. Well thank you science for finally coming to the conclusion that nature for a long time has made obvious.

From MSNBC we have this nugget about the new Pope's political leanings.

He was an important player in the American dispute last year over the church’s attitude toward Catholic politicians like Sen. John Kerry, who favor abortion rights. With one bishop saying he would deny Holy Communion to Kerry, Ratzinger helped guide the U.S. prelates’ discussion of the matter. The cardinal said that while bishops ultimately could decide to withhold the sacrament, they should meet with, teach and warn politicians first. Ratzinger also said that voters would be guilty of “cooperating in evil” if they backed a candidate specifically because he or she supports abortion rights or euthanasia.

The State Department under Condeleza Rice has stopped issuing a report because it is showing that terrorist acts are increasing and not decreasing. This is par for the course for the Bush Administration that has preferred to deal with propaganda rather than reality. Unfortunately, this is not merely an isolated instance. Despite the complacency of analysts and world leaders, there is every sign that the international order in place since the end of WWII is unraveling.

Money supply according to the St. Louis Fed. is still growing at a steady pace. Yet as Stirling notes, the money is not particularly rushing into stocks or commodities at the moment.

The NY Times is reporting Frist engaging in a telecast with religious leaders aimed toward demonizing those who oppose the removal of the filibuster as being "against people of faith".

I don't want to make facetious arguments or engage in what might be accused as hyperbole. So I will simply offer sections of two different articles on economic aspects of the Great Depression without much comment until the end. You might find them interesting reading however. It is impossible to draw a direct comparison between the present period and the past one, but there are still many lessons to be learned.

The Christian Science Monitor reports what scientists have been grimly foreseeing for some time: the decline and failure of American scientific, engineering, and technological preminence. This is somewhat short sighted since the only way to buy time for the US to smoothly transition to a new economic is to hope for just one more single last technological leap forward. In more dire considerations, the US has pissed off a lot of people during the years and it is almost inconceivable that the military model of technological superiority will be successful then Europe and Asia are inventing all the best new gadgets.

In my critique of the liberal orthodoxy of trade and development in my article on the Economics of the Southern Strategy I laid out a historical case for how the United States became one of the more protected economies in the world. To emphasize this I would like to quote George Monibot.

This Economist article is supposedly subtitled "A new approach in foreign policy is gradually winning even the Europeans over". However the snide joke contained within the picture tells me a completely opposite theme- namely that America has become a buffoon and is not taken seriously any more.

Currently we live in an age where politically and academically the ideology most often defended as the basis of the world economic system. However the fallacies of the system are not best critiqued by arguing about how it unfairly hurts people but by exposing the hypocrisy in how the reality of "free trade" violates the very premises of the rhetoric. The truth is that the United States lives in one of the most protected uncompetitive anti-market and anti-capital systems in the world. It has become this way in a search of rent extraction, namely to prosper for its place in the scheme of things rather than its usefulness. Details below.

Before we ask questions like "what is wrong with Kansas" I would like to go back in time and examine where it "all went wrong" so to speak. We need to talk about where the Democratic and Progressive movements have come from to understand where it is going. This search for the "soul" or rediscovery of the roots of the current Democratic party is important if Democrats ever want to be trusted in office again. So how to examine such a topic? First we start with a case study and then history.

Many people point to perverse moral or violent behavior as the sign of decadence in a civilization. That's not what I look for. What I look for is perverse economic choices. As an economy matures in a civilization, there tend to arise certain state subsidies that distort ordinary economic choice making. A vast industry grows up around these state protected activities, which are feted and given high status. In the midst of the culture and the constant reassurance and rationalization that it is all acceptable and nothing out of the ordinary sometimes you just have to see something stand out before it strikes home how perverse the economic incentives have come.

Did you think that SUV's in suburbia and exurbia were the epitome of American economic distortion and decadence? Think again. Think the Jetsons. Remember the films from the 50's where it was imagine that people had their own personal futuristic jets? Well it's here.

They say that dog bites man is not news, but sometimes that man bites dog is such. How about if the dog mauled someone everyday but no one did anything about it, would that be news? To no one's surprise the current accounts deficit grew again. What are we to make of the normalization of the unsustainable?

What happened to the Treasury Yield Curve in August of 1970? I can answer that question in one sense facetiously because I can simply look up the data. However I am not a historian and don't pretend to be one. However since for some odd reason this data has become of such great interest to persons let us quickly examine what happened.

As is being reported, Russia is providing nulear fuel to Iran. The claim by Russia that this will prevent Iran from developing a nuclear fuel cycle because the Russian fuel will be recovered and sent back home is false on the face. That the technological experts of Russia are claiming this is almost certainly evidence that Russia intends Iran to develop a full nuclear fule cycle. Explaination below.

This is a good article. You should read it. A politics is successful at the grass roots level when it creates a microeconomics that supports the morality it articulates. You may consider the conservative ideology reprehensible, but there is nothing the matter with Kansas at all. Given the choice between a microeconomics that is at least short term viable with a repressive morality and a morality that might be more admirable but is not, then guess which people will go with? Remember too that these women described in the article here are the successful ones. What happens to the one's on the edge or who go over it, was documented by another woman recently who posed as a Walmart cashier. One of her interview remarks was about how conservatives were completely taking over private social services to supplement the live of poor women, and how liberals used to be better at it.

This is also why Hillary would be a disasterous candidate. The Clinton formula only worked when there was a robust private sector to off load liberal welfare state failed cases. In the America of the future, both the government sector and the private sector will be contracting. It took an FDR to handle that last time, and whatever else she is Hillary is no FDR.

Here is a Guardian author making the case why it is Syria that is next rather than Iran. I am not entirely sure that I agree. Personally I think that when the time comes it may come down to Cheney throwing a dart at a target and Bush randomly flipping to a bible page that may decide whether it is Syria, Iran, or some mixture of both they decide to attack. The Administration may not even see a distinction, except that Syria is militarily more susceptible to invasion.

Recently discussions regarding the liklihood of war and its impact on the economy have sprung up. All the cases for limited war rest on two premises A) that the violence can be politically contained to a certain theatre of conflict without spreading and B) the negative effects on the economy will be small or at least smaller than the positive War-Keynesiam effects. It is worth while therefore to examine these two assumptions to see if they will in fact hold.

As has been expounded on at some length by Stirling, the economic engine and architecture of a nation is what most deeply defines a governmental order. This is counterintuitive because at a micro-level the average person does not live to work but works to live. People don't like to think of themselves as defined by money. In truth they are not. However society is. Money and how it is structured determines morality and therefore public policy; aesthetics and therefore asset valuation and therefore wealth which is another word for worldly success; ethics and therefore professional conduct and institutional protections since it is those who advance economically within a profession that determine the goals and standards of that profession or institution.

Money is the "invisible hand" that determines not what people are inside but how they are allowed to express that socially. Money cannot make you straight if you are gay or vice versa, but it can determine whether or not it is socially acceptable to be gay or socially acceptable to lynch gays.

The destruction of the old economic order is therefore paramount to forging a new one. It is with interest then, that we note that the selloff seems to have begun.

First Russia announces that it will sell air-defense systems to Syria. Iran and Syria announce a united front. Then Russia now announces that it does not believe that Iran is developing a weapons program. This is a tacit signal that Russia will oppose any UN council sanctions against Iran.

A work of fiction because sometimes truth is stranger than fiction. All names, events, and identities have have been changed and thoroughly muddled to protect the guilty and obscufate the obvious.

Authors Note: Ian has suggested I try giving this fiction thing a whirl since it seems a more accessible medium for the layperson. So I have.

Say what? Well it's based on the technical issues of a recent Illinois court ruling which if upheld could eventually lead to the banning of IVF and stem cell research in general. The case in question is a wrongful death suit by a couple whose embroyo was destroyed by a fertility clinic. The ruling in question determines that the embroyo was a "human being" from the time of conception.

The actual state of the union is where most high schoolers think flag-burning is already illegal and that about half think government should have the power to censor news. That's the state of the union as it exists. This is the future generation of Americans. Within one generation America as we have known it will for all intents and purposes cease to exist. What will the America that replaces it look like?

Iraqis are voting. No matter what, it is inspiring to see people brave dangers in an attempt to vote. However the greatest danger to the stability of Iraq was never the insurgents or their bombs. While exacting a terrible toll, they were only a sideshow to the real problem at work in Iraq. What people don't get is that the insurgents were always the symptom and not the disease.

I have often heard the mantra chanted by well-meaning liberals that if they can only "raise consciousness" or make the general public aware of "the truth" of what is going on that it will stop bad people from doing bad things. In a way this feeds into the myth that Stirling has described where people ascribe to the press that if it is exposed in a major paper it will bring an end to the scheming of those who abuse power. We know of course this isn't true. The truth will not set you free, because it is not that the public doesn't know but that they don't care.

The reason why I emphasize this is because it has strong implications for why the Democratic bid in the 2004 elections failed, and why it will likely fail in 2008.

Recently Seymour Hersh has published a report in the New Yorker about clandestine US special forces operations in Iran identifyng targets for military strikes in that country. The US government has criticized certain details of Hersh's report but has interestingly failed to deny it. What Iran had to say in reply was somewhat cryptic but extremely interesting.

In my post asking Democrats to rediscover the soul of their party, there were many very worthy responses. I don't have time to respond to them all despite that they deserved such a response. There was one response in particular that I would like to take the time to answer because it symbolizes something greater about our struggle for the soul of America itself. The response was written by an anonymous poster known only as Nameless Soldier.

Let me ask you a question. Where is the soul of the democratic party?

One day a supplicant came to the great Buddhist patriarch Boddhidharma (literally a nom de guere meaning the law of enlightenment) and asked Bodhidharma to pacify the supplicant's soul.

Hello all, I hadn't meant to return to blogging so soon. As you might have gathered I have been suffering from exhaustion regarding a series of personal and proffesional stresses. However some things cry out to the heavens to be rebuked. If we can do nothing about it then we can at least cry out so that the future generations knew that someone somewhere knew how terribly and dreadfully wrong it was.

What traversty am I talking about?

First of all, merry x-mas and happy new year to all of you BOPsters. I have to travel on family affairs again and besides the holiday stuff I have to help my mother with more business dealings.

That having been said, I'm emotionally and physically recuperated and after the flight back from the West Coast feel both ready and eager to resume writing here again.

The final thing is that the word that I'm getting is that the military is about to reach its 'break point'. This doesn't mean that they fall apart, but they experience a marked degradation of performance and capability. All sorts of little data points argue for this, but mostly it's just an intangible feel you get dealing with military people. They've done managing the crisis and stretched thin and making ends meet. Now comes a stumble.

That's all for now, I'll be back after the holidays and hopefully reconnect with the people I'd been working on writing projects before my hiatus and I'll be right back at it.

Hi everyone. Basically what is happening is that my widowed mother is dealing with lawyers in a wrongful deal suit over my father's death in an automobile accident almost 18 months ago. The insurance people have been intractable but they're getting even worse. I spent the Thanksgiving holidays dealing with this, and in pounding the pavement getting direct source info on Bush Administration foreign policy planning. The news there is pretty grim. In short they are determined to see it through no matter the cost. Will post something on that later. This weekend I have to travel back to accompany my mother in her court date. Between juggling these two things, and occasionally earning a living I'm completely tied up at the moment. Getting good info is often dearer than money by far.

I understand that there have been some issues between contributors and administrative questions about BOP's mission. For my part, I wish to emphasize that I have no animus toward any individual here. My only concern is that all parties be accorded due respect and a fair civility hold as the standard of conduct. Hopefully people will sort all this stuff out and we can get back to the work.

When I get my personal stuff untangled in a week or so, I'll start regularly contributing again. Until then, in nomine facunt patriarum pacem atque bonem benedicte dono te et in magnis opis spem victibit supra malefice volo fidere. Argentis novus cum ignis purificatio perfectum.

As I described in my article on the theory of capitalism that if a bank makes a loan on an asset (like real estate) and then packages and resells it then that is what I call a bond. If a bank does this for a corporation against its assets and future income, then we call that a corporate bond. If you consider a financial household as a small for-profit corporation special case whose main asset is a house and real estate then a mortgage-backed security is also a type of bond. This has importance for considering real debt issued by Treasury.

Don from Colorado asked in a comment the following:

Revving up the war manufacturing cycle seems like it might stimulate that segment of the economy, Oldman, but does it do anything good for the budget deficit and balance of trade in this country?

Would it be akin to revving up the war machine for WW II, or would it rather just put the government deeper into an already deep hole?

The Guardian (UK) is reporting a leak from the Pentagon indicating that they've switched from war-gaming from simulations where they strike Iranian nuclear sites to simulating strikes on political targets in support of a regime change in Iran.

I want to personally apologize unconditionally and publicly to Barry Ritholtz. I was wrong. I want to admit that publicly. I was dead wrong and he was right.

Ian has graciously given me a response below as to why he thinks the maneuvers politically are consistent with a Bush invasion of Iran. I generally agree with him but will try to play Devil's Advocate for a moment, which in this case means defending the notion that Bush isn't as crazy as everyone thinks he is.

On Friday I was eating at a southern style BBQ joint in Iowa, when I couldn't help over-hearing their conversation about Iraq between two men. I've tried to reproduce here as nearly as I can to the original wording. I didn't take notes and I didn't have a recorder, but one of the minor talents I have is that I can usually reproduce entire conversations pretty accurately if I'm so inclined. It's come in handy in the past.

Because sometimes Diplomatic language is obtuse or euphemistic, I thought a brief and succint summary of recent developments in the world would be helpful.

A fictional work of a possible future of America; fictional because truth is stranger than fiction so sometimes fiction may stand in where truth would be discounted.

The Economist has an article about the currency devaluation issue with an interesting chart.

You can see for yourself the deterioration since 1996. The trend is not good. Even the countries we had a positive export balance to in 1996 we've become massive importers from now.

A Marine General claims that the US has 'broken the back of the insurgency'.

His reasoning? They're recruiting new members now. Huh? Yeah really. You can't make this stuff up. Truth really is stranger than fiction.

Back in my update post on the currency situation, a poster named Mike asked:

Maybe I'm a numbskull.....

I find these economics articles very interesting...and potentially quite enlightening.

But I guess I'm just too dumb to really get how some of these issues (like the falling dollar, huge deficits, et.al) affect the little guy?

What exactly would happen if there were a "currency crash"? A little education along with the writing would be very, very helpful to me.

Posted by: Mike at November 17, 2004 09:44 PM

The WaPo and MSNBC state that Iran has undeclared nuclear material, a working bomb design, and is working on a missile delivery system for warheads.

There are two problems. The first is that as far as I can tell, this time Powell is actually right when he declares the above. The second is that no reasonable person would be be willing to accept the credibility of the United States of America on this issue, even if it were proven beyond a reasonable doubt, on this issue anyway.

We are now the superpower that cried "wolf!"

CNN reports that Goss denies that he told his staff to back Bush or get lost.

But that's not the story.

Via Col Lounsbury a featured Economist article itself agrees with and then quote Paul Volcker as agreeing with the BOP forecast on currency realignment. To quote:

One of the most alarming answers comes from Paul Volcker, Alan Greenspan's immediate predecessor as chairman of the Federal Reserve. He recently said that he thought there was a 75% chance of a currency crisis in the United States within five years. [emphasis added]

Okay during the last few days there has been a litany of bad news. It's depressing. Great. So what do we do about it? As Kevin suggested earlier we've got to start acting like an opposition party. As Ian noted that means getting out ahead of the curve.

So I will list some ideas for us to get out "ahead of the curve" and establish ourselves as acting like a credible opposition.

Looks cute doesn't it? Too bad that this is the face of the Mark of the Beast.

To your unasked question, when cops can watch your location on a little map any time they want to and we're reving up to indoctrinate an entire generation to accept that as normal then no I don't happen to think that this is being overly alarmist.

Many months ago, Col Lounsbury asked a question which I answered for him as regards to who is holding mortgage-backed securities. The systemic risk theme is something that I'd been hitting on about with my blog.

Now here we are, with MSNBC reporting that Fannie Mae has missed an earnings reporting deadline.

In the later half of the twentieth century Americans and global citizens had become spoiled by their long Pax Americana. First there was the victory by attrition through mobilization and proxy wars of the Cold War. The period of the late twentieth century was entirely one of increasing international norms. This ironically left most citizens of the most developed nations unprepared to either anticipate or react against the political forces moving to consolidate domestic power by destabilizing the international arena.

The earlier half of the twentieth century had been dedicated in not one but two World Wars to fighting the forces of Germany. The later half of the twentieth century had been dedicated to creating an international arena where Germany was entirely pacificistic. Despite this, the ominious signs of the resurgence of the Germany military was ignored until it was too late.

In reponse to my post below, Ian had this to say:

Exactly what I've been saying for months. You can win by scaring them shitless, or you can win by making their interests your interests.

But they aren't going to do either, so we may as well get used to seeing such pictures.

Posted by: Ian Welsh at November 16, 2004 01:10 AM

Behold the future of the US Reconstruction effort in Iraq.

As reported by MSNBC. Let's cut through all the complexity, the "gordian knot" of the issues. For all the talk, there are only two conceivable ways to possibly prevail at this point in Iraq. The first way involves killing several million Iraqis. The second way is Doing The Right Thing. It's up to us to decide. If we don't have the stomach for the former or the grace to do the later things are going to go very badly for us.

Bubbles mean prices go up. So why are bubbles a bad thing? Fundamentally it's about investment versus speculation. Money changing hands spurs economic activity. The question is what kind of economic activity does it spur? Does it try to make a quick buck? Or does it invest in the infrastructure to make a better future? Bubbles mean prices go higher, but a bubble is not just defined by price inflation of a speculative asset class it's about what that money is being used for.

With some colorful graphs I will try to make the case that the current monetary policy regime by the FOMC has already placed us within a bubble unprecedented in modern times and that macroeconomic indicators of production are declining.

As Stirling notes, Jane's has come to the conclusion that Iran is merely buying time to obtain a fully functional nuclear arsenal. They already have a missile program and combining the two while not trivial is well within their capabilities.

In the midst of this debacle, long time spooks like Merlin aka McLaughlin are bailing on the agency. In addition Blackwill and another experienced operator are also resigning from the national security side of things. These are just some of the high profile names. There have been others and there will be more. They are as it were leaving the sinking ship.

Assad asked me what the Bush regime should do? Well it's an ugly situation but first let me sketch out the general geostrategic environment and from there it will be clear what any sane person must do.

In the interests of being Fair and Balanced here at BOPnews I have undertaken it upon myself in order to share the under-emphasized good news from Fallujah. We have to support our troops and that means supporting the politicians and commanders that send them into harm's way no matter what decisions and policies are made. This is the best way to support our troops! :-)

That is a picture of US soldiers rounding up and detaining every Iraqi man they can find in Fallujah. To find out why that - really it is - is the good news, read on.

A considerable discussion about "peak oil" both from the pessimistic side by consumers and some "experts" and the optimistic side by some "experts" has been taking place. This discussion involves nominally the so-called Hubbert's Peak or point of diminishing returns in the production of the supply of oil. As it turns out both sides are wrong and make unwarrented assumptions about either future production, investment, or demand.

I will examine some representative claims and argue that a basic knowlege of markets in addition to known proven facts about oil supply and production show that neither the pessimistic nor the optimistic scenario understands the actual dynamic that will play out.

I've decided to do a fuller treatment of GDP and its components and to post it later and consolidate it with my previous work. As I was going over stuff I found myself getting scatter brained. Too many apples and oranges issues coming out of the woodwork as I looked at different number comparisons. I want this to be whether or not it is ever published to be publishable quality work. Chain-weighting and hedonics and CPI will have to be dealt with. GDP is a serious topic and I intend to give it a serious treatment. When I'm fully convinced it can stand even incredibly picky nit picking I'll post it back on the board.

Until then I've got some more economic commentary and analysis forthcoming.

Since Stirling and Shaula and others are getting down on the Fallujah offensive I thought I would take the countervailing point of view and spread the good news from the frontlines there. I chose to hi-light a troop embedded NYT reporter's dispatch because we know that embedded reporters give the most glowing reports of military action.

That is a picture of a Mosque getting hit by a 500-lb bomb by an airstrike called down by Marines. To learn why this is the good news, read on.

The other day I asserted that Democrats and especially their leadership seemed dazed and confused. Little did I know that soon their cutting edge consultants would prove just how clueless they were. Their solution to reaching out to people and mobilizing voters?

Eating at Applebees.

I'm not kidding. This is not a spoof. I couldn't make up stuff this bizarre or out of touch. As they say truth is stranger than fiction.

Recently there's been a great deal of talk about the decline of the dollar. Most of the talk has been couched in terms of export advantages or financial market impact. However the underlying international basis of currency and therefore trade is going to undergo a realignment. This will be trickier than simply the dollar declining against the euro since many currencies are involved.

Currencies that rise against the dollar will become favored for transactional liquidity and experience lower interest rates. Currencies that fall against the dollar will be better positioned for export if they peg their currencies to the ones that gain against the dollar. Since the international trade environment makes floating their currency so unstable as to be near impossible for many economies, those that fall will be forced to repeg against the stronger currencies.

I illustrate the shift with two charts to convey the full impact.

There is a great deal of complacency or confusion extant even among economists about what is happening in the economy right now. Is this boom, recovery, stimulus driven, robust, etc.? Part of the difficulty is that we are transitioning to a new policy driven economic regime fundamentally different from the early 90's recession and recovery. Past rules of thumb (heuristics) will need to be adjusted to cope with the new realities.

With multiple colorful charts I will discuss how the evidence of a major financial market shift can already be seen underway and how the interest rate yeilds suggest strongly that this has been driven by an irresponsible fiscal budget policy on the part of the Bush Administration and risky monetary policy on the part of the Federal Reserve FOMC.

I'm seeing a lot of good ideas and insights start to come pouring out here at BOP. This is from authors and from some very insightful commentators. This is definitely what we have to keep up - creating the infrastructure for a vision of tomorrow in line with the best progressive ideals.

However out there in blogland and Democratville there's still a lot of people who are for lack of a better term dazed and confused. There are, thankfully, a smaller number that have been driven to extreme agitation. I thought it would be worth taking a moment to discuss the general atmosphere "out there".

It has become common to refer to very strong fiat currencies as hard currencies. This is not strictly true. Hard currencies are typically critical commodities are are traded as a form of monetary liquidity. The reason why people traded gold for instance is not so much the use of gold but that gold was a universal transactional standard - liquidity.

What this means is that unlike what some people will tell you, the fact that America has a lower GDP-oil consumption ratio than it did a generation ago is irrelevant to what a change from the dollar-oil standard will entail in so far as economic shock.

Much has been made of the divide between morality and rationality apparent in the voters during the 2004 election. It has been common to say that the people voting for Bush in the aggregate are not voting for their interests. This is not entirely correct. Nor is it simply an issue of old conservative opposed to old liberal approaches. They two disparate features meld together because of the nature of human experience.

Those voting for Bush simply view their interests differently. It is not a difference between morality and rationality we face, but that of differring moralities created by the extingencies of differing social adaptions to past economic realities.

That truth is concretized by the collapse of center and moderate left Democratic political viability. The left is just as much responsible for the current state of affairs as the right, though generally out of weakness and dissapation rather than vice and aggression.

Human decision making does approach the ideal of rational economic agents so long as you understand that there's a lagging effect because people's views of their own interests are formed by their experiences of the social reality of the past. To understand this and why just putting on the trappings of religiousity will not win Democrats the 2006 election cycle we have to examine the economic basis of morality.

CNN reports that an apparent suicide protest has taken place at the WTC site.

The news brief indicates that it wasn't a "typical" suicide victim.

CNN reports that:

COLUMBUS, Ohio (AP) -- An error with an electronic voting system gave President Bush 3,893 extra votes in suburban Columbus, elections officials said.

More below.

As it happens there are a great deal of ignorance and myths out there about how capitalism, monetary systems, and free markets actually work. The shocking thing is that a lot of the falsehoods are perpetuated by economists. Things that are not markets such as the Presidential futures are called markets. Markets are declared as being all knowing when in fact studies have shown that distributed networked consensus is typically not capable of holographic thinking with nonlinear features.

It's taken for granted that our current personal and national finance system of revolving-credit is in fact the natural monetary system. Even critics like Monibot who rail against it take it for granted that this model is the only workable one available. Exploring the roots of capitalism and trade however will show that the revolving-credit monetary system is in fact about as unnatural a system as can be imagined.

So how do capitalism, trade, and markets really work?

Given the events of the past few days many Democrats are stunned, angry, or depressed by the outcome. Shrinks talk about multiple stages of grief ranging from shock, anger, denial, sadness, and acceptance that persons who experience a trauma go through. Even though nobody died I think for many Democrats a little bit of hope, a little bit of their concept of America as a magnaminous progressive land, was disappointed and it's natural to want to pull away or blame someone else.

So I won't talk fully about what I see as hopeful opportunities for Democrats, because before people are seriously ready to fully consider them they have to get their heads straight and their hearts healed a bit. It didn't help that the freeps and trolls descended like scavenger birds to try to feast on broken Democratic hearts. That was the reason I was snarling the other day. I was trying to play scarecrow until people recovered from the shock.

What I will do is outline a few ideas about where to go in the future so that people can think about them and make their own contributions, when they're ready to get back on the horse again.

So what can Democrats do after what one friend of mine called a "dark day"?

You've come to know me as a sometime commentator and writer of my own blog over the last few months.

It is said that drastic times call for drastic measures. In the spirit of the current crisis within the Democratic party following the stunning but not entirely unexpected loss of almost the entire slate of 2004 Democratic national candidates I have been drafted to serve as an author here at BOP-news so long as I remain welcome by the management.

If you want to know more about me I've included some information below. Otherwise I'd like to focus on the matters at hand and will in upcoming posts.