The Fundamental Problem
The fundamental problem, or at least the pragmatic problem, with using torture and abrogating civil rights is that the government can never be sure it is torturing the right person, or abrogating the civil rights of the right person. In cases where the government has sufficient evidence to be certain it has the right person, there's no need for extreme measures -- due process will work fine. When the government lacks such evidence, there's no way to be sure it's targeting the right person.
Witness today's news that the charges against Brandon Mayfield, a lawyer and Muslim convert who once represented one of the "Portland Seven" in a custody case, were thrown out. Fortunately, due process is down but not out. After being held for two weeks as a material witness, Mayfield was freed.
The FBI does deserve some credit for issuing an apology, though it appears they are perhaps being less than forthcoming. Their story is that it was a purely random finger print mismatch that lead them to pick up Mayfield, who attends the same Mosque as the Portland Seven. Since the FBI's database has about 40 million fingerprints, the odds of that happening are roughly 0.000000025.(*)
I think I have to side with Belle Waring's very perspicacious mother.
AB
(*) Of course, the odds of any given match from the IAFIS database are 0.000000025; still, it seems more likely that Mayfield was culled from a much shorter list.
Monday, May 24, 2004
Swing State Jobs Update
Alert readers may recall that during the height of the Democratic primaries I did a series on the jobs picture in most of the big swing states -- after many years of growth under Clinton, almost every one had a substantial jobs decline under Bush (Florida is an exception, but much of that is explained by above-average population growth.)
In the interest of being fair and balanced, the jobs picture in the swing states appears to be improving at an above average rate:
WASHINGTON — Employment has picked up significantly this year in a number of closely contested states that could decide the outcome of the 2004 presidential election.
The latest Labor Department figures on state jobs show that 10 of the 17 states expected to be the most tightly contested this campaign season were among the fastest-growing job markets in the country in April.
... Employment nationwide grew 0.2% in April, but job growth was more than double that in Wisconsin, West Virginia, Michigan and Missouri.
Still, it's extremely unlikely that the very crucial Ohio will regain all 265,000 of its lost jobs (for comparison, Bush's 2000 margin of victory was 90,000.)
While Bush supporters' trumpeting of the finally-not-bad jobs news is understandable, improving but not even breaking even after four years is a pretty low target, particularly after accounting for population growth. "Bush/Cheney 2004: Not quite as much below where we started as you thought we would be!" is probably not the stuff of which wins are made.
AB
UPDATE: By way of Atrios, the latest CBS numbers show that "Overall, 49 percent of registered voters now say they would vote for Kerry, 41 percent for Bush," which is perhaps Kerry's first statistically significant lead.
Bad Poll News
... if you're George W. Bush, that is. His poll numbers are falling like a clumsy mountain bike rider. Ruy T.'s got the details:
Wow! Not only has Bush's approval rating on handling the war on terrorism been dropping like a stone, the Annenberg Election Survey has now measured it in net negative territory: 46 percent approval/50 percent disapproval (May 17-23). That's a first and a very significant first. It means Bush's area of greatest strength is rapidly turning into political liability.
And check out the internals on this question: 41/53 among independents; 41/56 among 18-29 year olds; 41/56 among Hispanics and 40/54 among moderates.
Read the rest for more numbers and analysis.
A thought. I've heard two concerns from liberals in the last few weeks: first, why aren't Kerry's numbers going up?; second, why isn't Kerry speaking up more? I think that Kerry's numbers have in fact gone up, if the appropriate counterfactual is kept in mind. To wit, Bush spent an unprecedented $50m in March and $31m in April, yet Kerry's numbers didn't go down and actually increased modestly in some polls. So, compared to the effect that Bush's unleashing of his campaign war chest was expected to have, Kerry's doing just fine.
Regarding whether Kerry should speak up more at this stage, I think it's clear that he should not. When everything the President touches goes badly, taking any of the media spotlight away from Bush would be a mistake -- if it's not broke, don't fix it. Save your money and bide your time. Savvy.
AB
Another Leak Probe?
Josh Marshall notes that a Newsday article about Chalabi contains this very pregnant sentence:
An intelligence source confirmed to Newsday reports in Time and Newsweek that the FBI had launched an investigation into who in the administration had passed the classified material to [Chalabi's] Iraqi National Congress.Marshall notes, correctly, that the ramifications of this leak may go far beyond those of the Plame investigation. After all, the intelligence leaked this time may have ended up in the hands of Iran.
Kash
Oil Prices and Saudi Promises
Last Friday Saudi Arabia promised to increase oil output by about 2 million barrels per day. Nevertheless, after a temporary blip downward, oil prices have continued their climb, today reaching nearly $42 per barrel.
Why does the price of oil keep marching higher, even in the face of gestures from Saudi Arabia that they will start increasing supply? In large part, it seems, because Saudi promises are seen as just that – gestures, rather than actions.
The interesting question is therefore this: why hasn’t Saudi Arabia taken more aggressive steps to try to moderate the price of oil? One could argue that they have some good reasons to try to bring the price of oil down a bit – both political and financial. Politically, the Saudis probably have more to gain from a Bush second term than from a Kerry presidency, in addition to the long-standing close relationship between the Bush family and the Saudi royal family. Bob Woodward reported that there was even an explicit arrangement between the Saudis and Bush about reducing the price of oil this year. Financially, the Saudis know that it would be wise to avoid keeping oil prices high for so long that it would encourage significant movement toward greater energy efficiency.
So the fact that the Saudis aren’t in a hurry to increase production suggests a couple of things. First, they may not think that oil prices are high enough right now to have any serious effects on encouraging energy efficiency. Second, they may believe that the price of oil will moderate on its own over the next year, making increased supply unnecessary. Third, they may now be unable to fulfill their promise to Bush because the resulting political and media spotlight would be too intense. Most likely some combination of these factors is at work – with the result that Saudi Arabia seems unlikely to step in and seriously increases supply any time soon.
Kash
Abu Ghraib: Problem Solved
Susan explains, by way of Digby.
AB
Chalabi Update Update
Kevin's drafted an excellent run down of Chalabi's career, 1969-present. The whole thing is well worth reading, but here's the exciting conclusion:
Bottom line: practically every group that has ever worked with Chalabi has eventually felt betrayed by him. This includes, at a minimum: (1) the Jordanian government, (2) the CIA, (3) the State Department, (4) Paul Bremer and the CPA, (5) the United Nations, (6) the NSC, and (7) the DIA. Oh — and quite possibly, (8) George W. Bush.
That sounds about right.
AB
Sunday, May 23, 2004
Chalabi Update
It's all CIA Director George Tenet's fault:
(CNN) -- Ahmed Chalabi, the former Iraqi exile who worked closely with the White House before the Iraq war, blamed CIA Director George Tenet Sunday for recent allegations that have apparently caused his standing with the Bush administration to plummet.
... "We never provided any classified information from the U.S. to Iran -- neither I nor anyone in the INC [Iraqi National Congress]," he said.
"That is a charge being put out by George Tenet. I say let him bring all his charges, all his documents. We also will bring all our charges and all our documents to the U.S. Congress, and let Congress have hearings and resolve this issue," Chalabi said.
... Chalabi said tension with Tenet goes back to 1994, when Tenet argued that "the way to remove [former Iraqi President Saddam Hussein] was through a coup. We said no; a war of national liberation, assisted by the United States, is the way to move forward.
"And he [Tenet] tried many coups, and we exposed the fact that he was wrong publicly, after he failed, and we sometimes warned the CIA in private about the possibility of failure. ... The feud with Aras [Habib] goes back a long way."
Now, I'm not Tenet's biggest fan, and I certainly believe that he and Chalabi don't get along well. But allow me to join with my right wing brethren, at least the ones who aren't diehard neocons, and defend Tenet: I don't believe he faked this, and I really don't believe anything Chalabi says. More likely, Tenet's case against Chalabi (insofar as it is "Tenet's" rather than a more broad case -- an issue under some debate(*)) is a true "Slam-Dunk."
AB
(*) The debate is over whether (1) Genuinely new information surfaced -- likely from Jordan's King Abdullah -- and so the US acted against Chalabi, or (2) The information always existed and now those who believe it (the CIA) have more power compared to those who don't (the Neocons in general and the Defence Intelligence Agency in particular.) Supporting (1) are the tips possibly received from Abdullah. Supporting (2) is this Newsweek story alleging that the Pentagon was out of the loop on the Chalibi raid:
When Iraqi police, guarded by American GIs, burst into the home and offices of Ahmad Chalabi and his Iraqi National Congress, looking for evidence of kidnapping, embezzlement, torture and theft, the men who run the Pentagon were left asking some uncomfortable questions. "Who signed off on this raid?" wondered one very high-ranking official. "What were U.S. soldiers doing there?" asked another, according to a source who was present in the room.
Has Bush Been Working for Iran?
The LA Times offers this explanation for the US's raid of Chalabi's headquarters the other day:
WASHINGTON — Ahmad Chalabi, the onetime White House favorite who has been implicated in an alleged Iranian spy operation, sent Iraqi defectors to at least eight Western spy services before the war in an apparent effort to dupe them about Iraqi President Saddam Hussein's illicit weapons programs, current and former U.S. intelligence officials said.If true (Iran is denying the allegations), this would be a tad embarrassing for the Bush administration. No matter how hard they try, I think they'll find it hard to put a good spin on being outsmarted and outmanipulated by the Iranians.
U.S. investigators are seeking to determine whether the effort — which one U.S. official likened to an attempt to "game the system" — was secretly supported by Iran's intelligence service to help persuade the Bush administration to oust the regime in Baghdad, Tehran's longtime enemy.
Kash
Friday, May 21, 2004
A Blight on My Country
It's a festering tumor wrapped in onion. Peel away another layer and get closer to putrid center.
AB
Another on the DisgruntledTM List?
Now it's former commander-in-chief of the U.S. Central Command from 1997 to 2000, Anthony Zinni, who may have to join the ranks of the DisgruntledTM. Okay, maybe he doesn't really qualify, since he never formally worked for George Bush, but he still has a credible perspective on things and seems to be pretty upset with the Bush administration.
Kash
Bush and the Financial Press
An interesting tidbit: Bush won’t take questions from his fellow Republicans on Capitol Hill, but he did meet yesterday with selected members of the financial press “for a half-hour chat.” One possible interpretation: he’s going to be trying to change his campaign from running on Iraq and terrorism to running on the economy. Sure, Bush's economic performance has been lousy, but given the steady stream of news out of Iraq I think that such a change in strategy may well be wise on his part.
Kash
The Budget Battle
The Bush budget, which would make some of the expiring 2001 and 2003 tax cuts that are set to expire next year, has been put on hold for a while because of the stubbornness of a few moderate Senate Republicans – Collins, Snowe, Chafee, and McCain. Whether the rest of the Bush lapdogs Republicans in Congress will be willing to compromise with those four fiscal conservatives (because compromising with Democrats would be simply beyond the pale) remains to be seen. But in the mean time, good for them for insisting that the Congress regain some semblance of fiscal responsibility.
Kash
More Less Chalabi
Not only is Chalabi ambiguous at best about the intelligence he may or may not have provided to the US, now the US is ambiguous about the intelligence it did not get from Chalabi.
Or, as Josh Marshall writes,
Ask not for whom the memory-hole sucks, Ahmed; it sucketh for you ...AB
Thursday, May 20, 2004
No Questions
Apparenlty, no matter how friendly the audience, Bush doesn't feel like answering any questions:
In a 45-minute pep rally in a basement conference room under the West Front of the Capitol, Mr. Bush told more than 200 House and Senate Republicans that the United States was firmly committed to transferring power to the Iraqis on June 30 and insisted that the temporary government would not be under American control. Specifically, Mr. Bush told the group, according to House and Senate members in the meeting, that the new American ambassador to Iraq, John D. Negroponte, would not be a de-facto successor to L. Paul Bremer III, the top American civilian administrator in Iraq who is to step down from his duties on July 1.
Mr. Bush took no questions from the [all Republican] lawmakers...
In the same story, this stands out as stunningly true:
Mr. Santorum said that Mr. Bush told the group that Mr. Negroponte would not be opening schools and hospitals.Yes, indeed. I am quite sure that John Negroponte (see also, this) will most certainly not be opening any schools or hospitals.(*) I'm just surprised that Santorum and Bush would admit it so readily.
AB
(*) No, death-squad training doesn't count as "schooling."
Gmail
Having nearly filled my Yahoo inbox, I'm transitioning to Google's new email service, Gmail (it's still in Beta, but apparently Google decided to let bloggers get in early.) My new email address will be is angrybear@gmail.com, which is much easier to type than angrybearblog@yahoo.com, so I'm expecting lots of mail. I'll keep checking the old account until people stop sending messages to that address.
AB
Chalabi
By now, you've all seen the big Chalabi news. There's a post I wanted to write last night but didn't because PRI's The World doesn't publish transcripts. In any case, the reporter (Lisa Mullins?) was interviewing the soon-to-be-raided Chalabi. Since it's rather timely now, I offer the following loose paraphrase of the interview:
Mullins: You're not getting $350,000/month any more. What happened?
Chalabi: We decided we didn't want it anymore. It made us look not independent. [I broke up with her, dammit!].
Mullins: Well, what were you getting the money for before?
Chalabi: For our cooperation. [Seriously, he basically just called it a bribe.] And for intelligence.
Mullins: But much of that intelligence turned out to be wrong. For example, Secretary Powell just said that the defectors fabricating stories.
Chalabi: Defectors? What defectors? We [the INC] never supplied any defectors to anybody.
Mullins: What about the WMD claims?
Chalabi: WMD? Who said anything about that? Not me.
The actual interview lasted five minutes or so, but it was mostly along the lines of Chalabi claiming that he gave valuable information to the US, but denying that he or the INC was the source of any of the information that has turned out to be wrong (i.e., all the information that formed the ex-ante rationale for the war.) You may think I'm paraphrasing for comedic, or perhaps tragic, effect, but I'm not -- well, only slightly. You can listen to last night's The World here (scroll down to "Chalabi interview".)
My thought in real time was, "How does anyone ever believe anything this guy says? He's an obvious and blatant liar."
AB
UPDATE: Atrios has a great picture of Chalabi, surrounded by (former?) friends.
UPDATE 2: Non-evil Roger Ailes has the apt theme song.
Tax Cuts = Support the Troops?
Earlier, I wrote about a proposal by House Republicans (which includes Hastert, of course) to extend the income limit for the $1,000 child credit from $110,000 to $250,000. Now, reading the Hastert/McCain exchanges that Kash just posted, I see that Hastert has the gall to basically claim that tax cuts support the troops.
Quick question for Hastert: can you tell me who doesn't make between $110,000 and $250,000? (Hint: they're fighting and dying in Iraq. No, not the private contractors. Nice try, but wrong. Try again.)
AB
McCain v. Hastert
Some quotes from their exchanges in recent days, as reported in the Washington Post:
The nasty exchange between McCain and Hastert began with a comment the senator made at a think-tank conference on the budget deficit on Tuesday. "My friends, we are at war. Throughout our history, wartime has been a time of sacrifice," McCain said. "But about the only sacrifice taking place is that by the brave men and women fighting to defend and protect the liberties we hold so dear, and that of their families. It is time for others to step up and start sacrificing."Makes you almost nostalgic for the fiscally responsible 1980s, doesn’t it, Senator?
…Hastert shot back: "If you want to see sacrifice, John McCain ought to visit our young men and women at Walter Reed [Army Medical Center] and Bethesda [Naval Hospital]. There's the sacrifice in this country."
…Hastert questioned whether McCain is really a member of Bush's party. "A Republican?" Hastert said with feigned incredulity. He then criticized McCain's opposition to extending tax cuts in wartime.
"We're trying to make sure that they have the ability to fight this war, that they have the wherewithal to be able to do it," Hastert said. "And at the same time, we have to react to keep this country strong not only militarily but economically."
…McCain retorted: "The speaker is correct in that nothing we are called upon to do comes close to matching the heroism of our troops. All we are called upon to do is to not spend our nation into bankruptcy while our soldiers risk their lives. I fondly remember a time when real Republicans stood for fiscal responsibility."
Kash
Bush Campaign Spending
Wow. They really have been spending their money like crazy. From today's The Note:
ABC News' Karen Travers reports that according to the Bush-Cheney '04's April FEC report, the campaign has officially hit the $200 million mark for total fundraising. As of April 30, BC04 had $71.6 million in cash on hand, putting the campaign's spending at about $128.4 million. In March, BC04 spent nearly $50 million.Spending $50 million in one month on a campaign must smash all previous monthly records. Looking at their cash on hand, I'd be surprised if they can hit that high water mark again during this election, but you never know...
Kash
Economist Running the Show
This week saw a triumph for a practitioner of the dismal science in the world’s second largest country. Singh is actually a very credible and well-respected economist; but running a government is something else entirely. I wish him luck.
Kash
The Government as Bush Campaign Tool
We all know that Bush has taken this art form to new levels in the past year. Yesterday the GAO took the first concrete steps to try to curb this practice, finding that the White House’s Medicare propaganda videos are illegal. Of course, whether this finding will make any difference is a different question. As a NY Times story about the GAO ruling says, the GAO “does not have law enforcement powers, but its decisions on federal spending are usually considered authoritative.” I take this to mean that we should expect the Bush administration to simply ignore the GAO’s judgment.
Kash
Fiscal Discipline ...
... or rather the lack thereof:
House and Senate Republican negotiators have produced a [pay as you go] measure that is essentially make-believe. It purports to require that tax cuts or spending increases be paid for with offsetting tax increases or spending cuts. It pretends to impose that rule for the next 10 years.AB
But it then provides, in the very same section, that the rule expires on April 15, setting the stage for a new tax-cutting spree next year. The rule applies only to the Senate. And it exempts $27.5 billion in tax cuts from this year's pay-go requirements.
Crediting Wonkette
As I MUST. She's got the right take on Wolfowitz's testimony yesterday:
Paul Wolfowitz fesses up on why Iraq isn't going so well: "We had a plan that assumed we'd have basically more stable security conditions than we've encountered."AB
Among those assumptions: That Iraq was a magical country, where lollipops grew on trees and the clouds were made of marshmallows! With gumdrop mountains and fruit-punch rivers and houses made of gingerbread!
P.S. Homer Simpson did say, "Oh look at me !!! I'm making people happy! I'm the magical man from happy land, with a gumdrop house on lollipop lane! Oh by the way ... I was being sarcastic." But I don't think Homer every talked about ***-******* (regular Wonkette readers will know what each asterisk stands for. Childless couples unfamiliar with the procreative process should probably not try to figure it out.)
Almost Missed This One
Via TBogg, this story from the Washington Post:
The House would not only make permanent the $1,000-per-child tax credit enacted as part of the 2001 tax cut but would dramatically increase the income limits for eligibility. Currently, married families with incomes of up to $110,000 receive the full credit; the bill would more than double the income ceiling, to $250,000. Under existing law, families with two children and incomes up to $149,000 receive a partial tax credit; the bill would make that partial credit available to families with two children and income of between $250,000 and $289,000; families with three children would be entitled to the partial credit up to an income of $309,000.In 2002, 5% of households (about 5.5 million households) earned more than $150,000/year, so there are somewhere probably around 10 million households earning between $110,000 and $250,0000. In the grand scheme of things, this proposal wouldn't cost all that much, roughly $10 billion (which would only increase the federal deficit by under 2%.)
At the same time, $1,000 really doesn't do much for families earning more than $110,000. Certainly, it would be nice to have even for these relatively wealthy families, but it's not going to really affect them in any significant way. For comparison, ask yourself how you would react to a raise of less than 1%.
So I can only conclude that this proposal is just a matter of principle: we need to take another 8 or 10 billion dollars from everybody (i.e., the people responsible for paying the deficit) and give it to the top 5%. Why? Not to make the economy or the lives of the wealthy better in any meaningful sense, but just because we can. At least, so say House Republicans.
AB
P.S. Technically speaking, of the 5.5 million households in the top 5%, 710,000 have a head of household over 65 and so probably don't have dependant children. And some portion of the under 65 households also lack dependants. So the total number of beneficiaries is probably well under 10 million, so the cost of this proposal is probably under $10b. But the point remains true: it's hard to see this as anything other than a principled transfer of 5 to 10 billion dollars -- from everybody, to the top 5% or so.
In fact, upon inspection, the Post story says the proposal would cost "$69 billion through 2014," which is about $7b per year.
RSS, Revisited (yet again)
It was down for a few days, either due to my messing with the template or Google's makeover of Blogger. I think it's fixed now, but if not, let me know in email or comments.
I've also changed the settings so that permalinks point to individual posts, rather than entire pages. I'm hoping that this will make search results more useful. Previously, seaches would always open the page with the relevant post, but would not center on the desired post.
AB
Take two Viagras and call me in the morning
Childless couple told to try sex:
The University Clinic of Lubek said they had never heard of a case like it after examining the couple who went to see them last month for fertility tests.Via Pandagon.
Doctors subjected them to a series of examinations and found they were both apparently fertile, and should have had no trouble conceiving.
A clinic spokesman said: "When we asked them how often they had had sex, they looked blank, and said: "What do you mean?".
"We are not talking retarded people here, but a couple who were brought up in a religious environment who were simply unaware, after eight years of marriage, of the physical requirements necessary to procreate."
AB
Wednesday, May 19, 2004
Texas
A few months ago, I wrote this:
At some point, can we just move Austin and its residents to some other state, give Texas over to the fundamentalists and evangelicals, and then let Texas secede? Maybe we could bring Houston along too, but not Dallas.Patrick Hayden has now seconded the motion in a post headlined "Via Julia, further evidence (free reg. req.) that Texas should be thrown out of the United States, if not sawed off the mainland and pushed out to sea."
AB
UPDATE: Charles Kuffner was, as is true of most blogging about Texas stories, the original source for the story.
Abu Ghraib Summary
Kevin's got a good, but depressing, overview of what we know to date about the events in Abu Ghraib.
AB
Alan Greenspan: “The Maestro”?
Yesterday Bush formally nominated Alan Greenspan for his fifth four-year term as chairman of the Federal Reserve Board. In his written statement accompanying the nomination, Bush said that “Alan Greenspan has done a superb job as chairman of the Board of Governors of the Federal Reserve System, and I have great confidence in his economic stewardship.”
Many in the financial world agree; in fact, Greenspan is often referred to as “the Maestro” of economic policy-making in the business press. “Maestro” was even the title of a Bob Woodward book about Greenspan. Is such high praise warranted? My answer is an unambiguous no.
For historical context, the following chart shows the Federal Funds rate (the interest rate most directly controlled by Alan Greenspan) since the year before Greenspan took the helm of US monetary policy in 1987.
How good was Greenspan's management of interest rates during this period? Let's take a look at some important episodes.
October 1987: The stock market crash. Greenspan received widespread credit for quickly injecting liquidity into the US economy, helping to prevent the stock market crash from affecting the economy more generally. He probably did the right thing, though it would have taken an idiot to fail to recognize that increased liquidity was needed immediately after the stock market crash.
1989: The economy was booming. Greenspan tried to engineer a “soft landing” by raising interest rates enough to slow the economy from the heady pace of 1988-89 without sending the economy into recession.
1990-91: Greenspan's "soft landing" clearly failed. He raised interest rates too high to fast, the US economy entered a recession, and he immediately (but too late) had to reverse course and lower interest rates.
1991-93: Greenspan tried to help end the recession by reducing interest rates. He lowered them slowly, however, and arguably not far enough. Though the recession was deeper than the 2001 recession, interest rates never went below 3%, and only reached that level in late 1992 – a full two years after the worst part of the recession.
1994-95: The economy was recovering smartly. Greenspan implemented a sharp increase in interest rates, wreaking havoc in the bond markets. The rise in interest rates was so sharp and fast that the US economy slowed dramatically in 1995, and nearly went into recession. Once again, Greenspan had to reverse course and quickly lower interest rates to undo his overeager increases.
1998: The failure of Long Term Capital Management (LTCM). The collapse of this hedge fund nearly paralyzed the US’s entire financial system. It was a financial disaster narrowly averted by careful Fed action (mainly in the form of coercing major banks to help out LTCM). However, Greenspan had little or nothing to do with this; it was NY Fed chairman William McDonough who orchestrated this narrow escape for the US economy.
1996-2000: The boom of the 1990s. Greenspan did virtually nothing to change monetary policy. The economy did great. However, financial and investment bubbles gathered strength and set the stage for the extremely sharp contraction in both the stock market and business investment in 2001. Many have argued that a tighter monetary policy during this period would have prevented a lot of future economic pain. On the other hand, few have argued that the strong US economy of the late 90s was due to magical monetary policy-making.
In short, I think that Greenspan has done some things correctly (including the sharp reduction in interest rates in 2001-02), but has also done many things clumsily. Far from being a master of monetary policy, I would describe his performance as mediocre.
In addition to his handling of interest rates, one might also judge Greenspan based on the advice and counsel that he has given the president, Congress, and the financial markets over the years. In this category, I would describe his performance as awful. He has talked of financial excess without doing anything about it; advocated tax cuts when the vast majority of economists could see that they were clearly fiscally irresponsible; and used his position to advocate his personal preference for a reduction or elimination of the Social Security program.
Put it all together, and I think that it’s time for a new Fed chairman. But it looks like we’ll have to wait a few more years.
Kash
Tuesday, May 18, 2004
Josh Marshall on Kerry’s Strategy
Josh Marshall has a good piece on TPM about Kerry’s strategy of more-or-less lying low while Bush’s popularity falls. The punch line:
Here's the point I'd like to discuss in a bit more detail: the fact that Kerry can't get a lot of attention to himself right now or that he's not seizing the opportunity to make the case against Bush. I don't think this is a bad thing at all. At least not for now.You can read the whole piece here.
Let's think of this battle as a prize fight, with both men in the ring. If you're up on points and the seconds are ticking down on the final round, what do you do?
Simple: stay out of his way.
Trying to land punches when he's desperate and going down gives him the opportunity to hit back. And in such a dire moment that may be all he has. Why give him the opportunity?
Kash
GOP Logic
I understand that the Republicans' campaign strategy is to portray Kerry as inconsistent. But today’s talking point seems pretty weak, even by the low standards of the Bush campaign.
As you probably know, the Bush administration (true to form) is bull-headedly sticking with a plan that was originally devised in 2001 to fill the US's Strategic Petroleum Reserve (SPR). Nevermind the fact that the relevant circumstances have changed dramatically over the past few years.
On the other hand, Kerry has called for some release of oil from the SPR to help moderate the rather high price of oil (in addition to several other policy suggestions). At a minimum, Kerry has suggested that the US government stop buying additional oil for the reserve while prices are so high, since the government’s extra demand can only serve to make things worse.
The GOP’s response? They point out that in 2000, Kerry said that oil should not be released from the oil reserve. Aha! Gotcha, John Kerry!
But wait. I think that the GOP should continue with this logic, and point out that flip-floppers abound in everyday life as well as in politics. In 2000 I said I didn’t want to take a summer vacation in California, yet this summer I’m doing exactly that! Clearly I’m a flip-flopper. In 2000 John McCain said he wanted to be president over George Bush, yet this year he’s not even running! Another flip-flopper. In 2000 lots of people wanted to buy shares in Lucent for $50 per share, while today no one is willing to pay even $4. Flip-floppers, all of them.
Try this logic out on your family and friends. I think you’ll find it a powerful tool.
Kash
Do Gas Prices Make a Difference?
A study released today by the Travel Industry Association of America indicates that Americans plan more summer travel than last year. Some media outlets are misinterpreting this as evidence that high gas prices may affect travel less than some people have expected. The reason that it's a faulty inference, of course, is that really one should compare how much people travel this year with high gas prices with how much they would have traveled this year with lower gas prices, not with how much they traveled last year.
Nevertheless, I find it moderately plausible that people’s driving plans have not yet changed much due to higher gas prices. Does this mean that higher oil prices won’t have much of an effect on the economy?
Not necessarily. The main way in which higher oil prices affect the economy is not by shortening summer road trips. More important are the effects of higher oil prices on energy inputs to firms, and the possible broader inflationary effects that this has on the economy. Higher interest rates result, which impose their own drag on the economy. These negative effects on the economy are not nearly as great as they were 20 years ago, but they still exist. (See this nice primer from the Dallas Fed for more about this.)
One interesting theoretical note: if you think about it, it is not immediately clear that higher oil prices should lead to higher inflation in general. In a world of smoothly-adjusting markets and prices, then when the price of one type of good rises, we would expect the prices of other types of goods to fall. In other words, a rise in the price of oil is just a rise in one particular relative price. All we should expect is to see the price of energy-intensive goods rise relative to the price of non-energy-intensive goods. However, we do in fact see a positive relationship between oil prices and inflation more generally. This therefore constitutes indirect evidence that prices do not in fact adjust freely in our economy. As Keynes famously pointed out 70 years ago (and many others less famously), prices are sticky.
The bottom line: while summer travel plans may not be noticeably curtailed, I still expect to see some summer slowdown in the economy as a result of recent oil prices.
Kash
Question
Who will be the first conservative blogger to note the horrible prison fire in Honduras and -- as an exculpation -- point out that, as with Saddam, that too is worse than what happened in Abu Ghraib.
AB
From the UPI
Yes, from the same UPI that's owned by Reverend Moon (who also owns the Washington Times):
WASHINGTON, May 18 (UPI) -- Efforts at the top level of the Bush administration and the civilian echelon of the Department of Defense to contain the Iraq prison torture scandal and limit the blame to a handful of enlisted soldiers and immediate senior officers have already failed: The scandal continues to metastasize by the day.
Over the past weekend and into this week, devastating new allegations have emerged putting Stephen Cambone, the first Undersecretary of Defense for Intelligence, firmly in the crosshairs and bringing a new wave of allegations cascading down on the head of Defense Secretary Donald Rumsfeld, when he scarcely had time to catch his breath from the previous ones.
Even worse for Rumsfeld and his coterie of neo-conservative true believers who have run the Pentagon for the past 3½ years, three major institutions in the Washington power structure have decided that after almost a full presidential term of being treated with contempt and abuse by them, it's payback time.
Those three institutions are: The United States Army, the Central Intelligence Agency and the old, relatively moderate but highly experienced Republican leadership in the United States Senate.
[snip to conclusion]
... Rumsfeld and his team of top lieutenants have therefore now lost the confidence, trust and respect of both the Army and intelligence establishments. Key elements of the political establishment even of the ruling GOP now recognize this.
Yet Rumsfeld and his lieutenants remain determined to hang on to power, and so far President Bush has shown every sign of wanting to keep them there. The scandal, therefore, is far from over. The revelations will continue. The cost of the abuses to the American people and the U.S. national interest is already incalculable: And there is no end in sight.
The remainder of the article is mostly and overview of the material from The New Yorker and Newsweek pieces, along with a defense of Sy Hersh's credibility.
AB
Monday, May 17, 2004
Hersh Denial
If everything Hersh wrote is true, this sounds exactly like what the Pentagon would say. On the other hand, it also sounds exactly like what the Pentagon would say if everything Hersh wrote is false.
AB
Where's the Blogroll?
It's to the right, along with the Rumsfeld Wire, hit counter, RSS feed, and the Archives. Now everything that runs a script is in the right panel and will be brought up after the center panel. Everything in the left panel is hosted directly on the Blogger servers and requires no scripts.
AB
At Least He's Not Joe Lieberman
I'm still pondering the merits of McCain as a veep choice, though I'm pretty sure that I'm against it. Basically, it still seems so unlikely that it's not worth considering too carefully. Besides, Mark Kleiman's done some of the thinking for me so I don't have too.
But there is one factor weighing strongly in favor of John McCain: he's not Joe Lieberman, who yesterday embraced torture
On CNN's "Late Edition with Wolf Blitzer, Sen. Joseph Lieberman (D-Conn.), a member of the Armed Services Committee, called the allegations serious and said they should be investigated. But, he said, if a special interrogation unit focused on suspected terrorists could have prevented Sept. 11, "I don't think there are many Americans who would say we shouldn't use whatever means are necessary to extract that information."
Great point, you sanctimonious twit. One question: how do you know who to torture? Many of us, including me, will agree that if we (1) Knew something like 9/11 was going to happen, and (2) Knew and had access to those with the information needed to prevent said attack, then we'd endorse applying whatever force is necessary to extract the information (others might choose to draw an absolute moral line and still object.) But in virtually any case where conditions (1) and (2) hold, we would already have the information needed to stop the plot.
So Joe's either engaging in more self-aggrandizement or he's endorsing widespread torture in the hopes of finding a needle in a haystack. If the latter, what's the right yield rate (accurate tips per person tortured) and what's the threshold number of prevented deaths? (The footnote to this old post has some thoughts on acceptable ratios of punishment of the innocent to punishment of the guilty.) Until he can answer the tough questions, Lieberman should stick to complaining about indecent video games and blaming stuff on Hollywood.
Back to the McCain question, not being Joe Lieberman is a major plus for him, but many other viable candidates (I'd venture to say all but one) cross that threshold as well (I like Kleiman's idea of Zinni or Shinseki.) I do, however, like McCain heading State or Defense -- positions where his experience and multilateral appeal could add a lot of value yet he would have little purview over areas where his conservative views would be problematic (e.g., judicial appointments.)
AB
In Good Company
The following is a screenshot of the Rumsfeld Wire from Sunday afternoon and evening:
Angry Bear, Atrios, CalPundit, Josh Marshall, and the DCCC's blog: birds of a feather.
AB
P.S. Alert or suspicious readers may note that it appears I pasted two different shots from the Rumsfeld Wire. The break in the image is there because the only way I know how to take screenshots is with Acrobat, which I couldn't get to make one continuous page. Since the page broke right in the middle of the Wire, I had to append the two halves.
UPDATE: Wow, just hit "Prt Scr" and paste the clipboard into your favorite application -- it's that simple! How did I manage never to learn that?
Sunday, May 16, 2004
Ambassador Atrios
Atrios is running a pledge drive this week. Meanwhile, by way of Mark Kleiman, I find this in today's Washington Post:
Of the 246 fundraisers identified by The Post as Pioneers in the 2000 campaign, 104 -- or slightly more than 40 percent -- ended up in a job or an appointment. A study by The Washington Post, partly using information compiled by Texans for Public Justice, which is planning to release a separate study of the Pioneers this week, found that 23 Pioneers were named as ambassadors and three were named to the Cabinet: Donald L. Evans at the Commerce Department, Elaine L. Chao at Labor and Tom Ridge at Homeland Security. At least 37 Pioneers were named to postelection transition teams, which helped place political appointees into key regulatory positions affecting industry.
... When Kenneth L. Lay, for example, a 2000 Pioneer and then-chairman of Enron Corp., was a member of the Energy Department transition team, he sent White House personnel director Clay Johnson III a list of eight persons he recommended for appointment to the Federal Energy Regulatory Commission. Two were named to the five-member commission.
Since Atrios has raised $161,705 (and counting) for John Kerry, by the Bush Pioneer standards, he should be entitled to an ambassadorship of Kerry's choosing or a seat on a regulatory committee of his own choosing.
Here at Angry Bear, Kash and I have raised $5,161.78 to date, well on our way to the $10,000 cumulative goal (donate here). If we hit $10,000, Kash or I might be entitled to the unpaid internship of our choice.
AB
Rumsfeld Should Go
By now, you've probably read or read about Seymour Hersh's latest for the New Yorker, The Gray Zone, in which he writes that the events in Abu Ghraib were the result of a slippery slope that began with the creation of a hihgly targeted Special Access Program:
Rumsfeld reacted in his usual direct fashion: he authorized the establishment of a highly secret program that was given blanket advance approval to kill or capture and, if possible, interrogate "high value" targets in the Bush Administration’s war on terror. A special-access program, or SAP—subject to the Defense Department’s most stringent level of security—was set up, with an office in a secure area of the Pentagon. The program would recruit operatives and acquire the necessary equipment, including aircraft, and would keep its activities under wraps. America’s most successful intelligence operations during the Cold War had been SAPs, including the Navy’s submarine penetration of underwater cables used by the Soviet high command and construction of the Air Force’s stealth bomber. All the so-called "black" programs had one element in common: the Secretary of Defense, or his deputy, had to conclude that the normal military classification restraints did not provide enough security.Over time, and spurred by the growing insurgency in Iraq, the program expanded:
Rumsfeld and Cambone went a step further, however: they expanded the scope of the SAP, bringing its unconventional methods to Abu Ghraib. The commandos were to operate in Iraq as they had in Afghanistan. The male prisoners could be treated roughly, and exposed to sexual humiliation.
"They weren’t getting anything substantive from the detainees in Iraq," the former intelligence official told me. "No names. Nothing that they could hang their hat on. Cambone says, I’ve got to crack this thing and I’m tired of working through the normal chain of command. I’ve got this apparatus set up—the black special-access program—and I’m going in hot. So he pulls the switch, and the electricity begins flowing last summer. And it’s working. We’re getting a picture of the insurgency in Iraq and the intelligence is flowing into the white world. We’re getting good stuff. But we’ve got more targets”—prisoners in Iraqi jails—“than people who can handle them."
Cambone then made another crucial decision, the former intelligence official told me: not only would he bring the sap’s rules into the prisons; he would bring some of the Army military-intelligence officers working inside the Iraqi prisons under the sap’sauspices. "So here are fundamentally good soldiers—military-intelligence guys—being told that no rules apply," the former official, who has extensive knowledge of the special-access programs, added. "And, as far as they’re concerned, this is a covert operation, and it’s to be kept within Defense Department channels."
The military-police prison guards, the former official said, included "recycled hillbillies from Cumberland, Maryland." He was referring to members of the 372nd Military Police Company. Seven members of the company are now facing charges for their role in the abuse at Abu Ghraib. "How are these guys from Cumberland going to know anything? The Army Reserve doesn’t know what it’s doing."
There's a lot more in Hersh's piece, most of it casting substantial doubt on the current line that the problems were the results of a few low level MPs gone wild.
The Pentagon, of course, refutes Hersh's account in its entirety and released a statement on Saturday saying in part that
"The abuse evidenced in the videos and photos, and any similar abuse that may come to light in any of the ongoing half dozen investigations into this matter, has no basis in any sanctioned program, training manual, instruction, or order in the Department of Defense."
Now, Newsweek has a story out, The Roots of Turture, that is completely in accord with Hersh's account. Apparently, Newsweek obtained a Jan. 25, 2002 memo from White House Council Gonzales to President Bush, that explains the origins of lax standards [emphasis mine]:
"As you have said, the war against terrorism is a new kind of war," Gonzales wrote to Bush. "The nature of the new war places a high premium on other factors, such as the ability to quickly obtain information from captured terrorists and their sponsors in order to avoid further atrocities against American civilians." Gonzales concluded in stark terms: "In my judgment, this new paradigm renders obsolete Geneva's strict limitations on questioning of enemy prisoners and renders quaint some of its provisions."
Newsweek also goes into some detail on Powell's immediate and continuing, but ultimately fruitless, opposition to the new Geneva-Free protocol.
How did the program devolve from a tight focus on top al Qaeda targets and implementation by seasoned intelligence experts to the generalized debasement in Abu Ghraib? Newsweek also pins the blame on Rumsfeld's frustration with the worsening situation in Iraq:
Rumsfeld was getting impatient about the poor quality of the intelligence coming out of there. He wanted to know: Where was Saddam? Where were the WMD? Most immediately: Why weren't U.S. troops catching or forestalling the gangs planting improvised explosive devices by the roads? Rumsfeld pointed out that Gitmo was producing good intel. So he directed Steve Cambone, his under secretary for intelligence, to send Gitmo commandant Miller to Iraq to improve what they were doing out there. Cambone in turn dispatched his deputy, Lt. Gen. William (Jerry) Boykin—later to gain notoriety for his harsh comments about Islam—down to Gitmo to talk with Miller and organize the trip. In Baghdad in September 2003, Miller delivered a blunt message to Brig. Gen. Janis Karpinski, who was then in charge of the 800th Military Police Brigade running Iraqi detentions. According to Karpinski, Miller told her that the prison would thenceforth be dedicated to gathering intel. (Miller says he simply recommended that detention and intelligence commands be integrated.) On Nov. 19, Abu Ghraib was formally handed over to tactical control of military-intelligence units.(*)
It is increasingly implausible that the torture in Abu Ghraib was just the work of low level MPs actiing without direction from above and, accordingly, it is increasingly unlikely that this will go away soon. Two independent sources -- Hersh and Newsweek -- cite the growing insurgency in Iraq as the impetus for the orders from above to expand and "Gitmo-ize" intelligence gathering in Iraq. The roots of the insurgency lie, in no small part, in Rumsfeld's refusal to follow the advice of his senior advisors and send more troops to Iraq.
That Rumsfeld's judgement is poor can no longer be questioned; the only question at issue is whether his culpability for Abu Ghraib is direct or indirect. I am un-moderating my views: Rumsfeld should go, forthwith.
AB
(*) For some disturbing background on Boykin and Cambone, see this post from Dave Neiwert.
UPDATE: Kevin read the same two stories and notes that "Hersh says abusive interrogation was the Pentagon's idea and CIA resisted," while "Newsweek says the Pentagon and the CIA were on board, but the State Department resisted." Both sources do agree, however, that orders and direction came from above.
UPDATE 2: Matt Yglesias adds this amusing caveat:
Now at this point there's so much interagency ill-will that you could probably find "intelligence officials" willing to say they've witnessed Donald Rumsfeld communing with the devil while someone at State assures you that Colin Powell was against the whole Faustian bargain concept from the beginning.
Saturday, May 15, 2004
Wow
Bush’s poll numbers keep sinking. From the latest issue of Newsweek:
May 15 - As his administration grapples with the fallout from the Iraqi prisoner abuse scandal, President George W. Bush’s approval ratings have dropped to 42 percent, according to the latest NEWSWEEK poll, a low for his presidency. Fifty-seven percent say they disapprove of Bush’s handling of the war in Iraq. And 62 percent say they are dissatisfied with the way things are going in the United States, a number that has been steadily increasing since April, 2003, when it was 41 percent.For some historical context on how these numbers may translate into an election outcome, see this post on The American Street. The Newsweek article goes on to note that Bush’s falling support has not translated into increasing support for Kerry. I’m not quite sure what the explanation for that is, other than the obvious – Kerry hasn’t inspired one-time Bush supporters, who may be disillusioned with the president but are not particularly attracted to Kerry, either. The crucial question is whether the Kerry campaign can change that.
Kash
Friday, May 14, 2004
Minor Changes
I've moved most slow-loading scripts (e.g., sitemeter) to the right panel, which should mean that the page will load the center panel before running them (which sometimes causes the page to hang for a while before loading). If this works then you will be able to read the hot fresh content while the rest of the page is loading.
I still need to fix the blogroll, which also hangs sometimes. One plan is to just switch it with the book recommendations (I put the images directly on the site instead of using Amazon to host them.) The other plan is to maintain it manually. Whichever I choose, by Monday slow-loading should be a thing of the past.
Thanks to twh, Wayne B., and Kevin Drum for the tips.
AB
New Data: Everything’s Up
The CPI was up in April, with the core rate rising 0.3%. The 12-month change in the core CPI is therefore up 1.8%, another sign that the US inflation rate is still rising. Just a few months ago the 12-month core CPI inflation rate was only 1.25%. (By the way, the reason that I like to use the core CPI is because it's less volatile than the full CPI, and thus better reflects the underlying inflation pressures in the economy. However, the full CPI does a better job of depicting what's happening to real purchasing power.)
Meanwhile the Fed’s monthly estimate of industrial production shows a healthy rise in April, too. The same data release shows that capacity utilization is also up, to its highest level in 3 years. The rise reflects increases in both manufacturing and in other industrial activities.
Finally, interest rates are also up, though they seem to have leveled off over the past week or so at their highest levels in about 2 years. The 10-year bond now yields around 4.8%, and the 5-year bond yields around 4.0%. Both of these interest rates are about 1 full percentage point higher than 2 months ago.
These are all classic signs of solid economic growth. The recovery is indeed in full swing.
The question of sustainability is still an open one, though. Will housing prices peak and start to fall? Will the impetus provided by tax cuts and government spending wane in coming months? Will consumers slow their spending as interest rates rise and house prices fall? (See Karsten's post below for more on this.) Will the price of oil cut into the recovery this summer? I’ve been answering yes to all of these questions for a while, and I don’t see any reason to change my answer yet. I don’t think that anything dramatic will happen, but I do think that all of these forces will have some effect, and that the economy will noticeably cool later this year.
Kash
Postcards from Old Europe - In debt we trust
The FOMC's recent change in the wording of their statement has clearly shown that the times of E-Z financing are coming to an end. The recent past has seen the Fed engineer a near-rational bubble in asset prices which has served to push household wealth up past the levels of the stock market bubble. Cheap credit has supported household spending at a time in which incomes have been growing at a snail's pace.
A quick series of (substantial) interest rate hikes could therefore lead to a substantial slowdown in consumption and thereby negatively impact future GDP growth. Consumer credit delinquency rates are already at near record highs while ever more home buyers finance their homes with no money down and use adjustable rate mortgages to squeeze out a larger loan. The reasoning behind this behavior is nicely stated in this NY Times article. Excerpt:
"I'm too young to be scared," he said last week, betting that both the value of the house and his income will keep rising. If the bet fails, he said, it will not be the end of the world, adding: "There is a difference between being poor and being broke. Being broke is more of a temporary condition. Donald Trump has been broke a couple of times."What I like most about this statement is that the person cited is supposed to be a "management consultant". I'm sure that an optimist like him is much in demand!
[...]
Mr. Thompson, who completed the purchase of his townhouse near Denver on Friday, said he would have qualified to borrow $330,000 if he had taken out a traditional fixed-rate mortgage. He qualified for a loan up to $550,000 by taking an adjustable-rate mortgage that will be constant for the first five years and that requires only interest payments.
This kind of mindset has kept consumers spending all through the recent economic weakness and has also served to boost consumer credit to a level of over $2 trillion. Total household debt is at a level of around 90% of GDP and the average American now spends almost 20% of their disposable income servicing debt. This is in sharp contrast to Euroland where household debt stands at around 60% of GDP.
The picture looks a little different if you look at household debt as a percentage of disposable income. Some European countries - such as Germany or the Netherlands - have a household debt to disposable income ratio which is higher than the US ratio. The Euro-average is around 30% below the US level though.
Another thing to keep in mind is the evolution of the savings rate. While the US savings rate is at a rock bottom 2% the Euro-average stands at around 13%! Europeans have reacted to sluggish economic growth and high unemployment by retrenching and saving more. In sharp contrast US consumers have decided to take a different course and spend more - even if it means taking on more debt.
The US consumer's decision has been vindicated by the behavior of asset prices. Up until the popping of the bubble the stock market did the job of saving for the individual. Rising house prices took up much of the slack after the bubble burst. This asset price inflation with corresponding price disinflation has made many households feel wealthy and consume more.
The only problem is that asset prices are just numbers in a ledger until you liquidate the asset. You need real money to consume and pay down debt. The worst scenario would entail your debt-service costs rising faster than your income - this leads to a sharp curtailing of other expenses to reduce the onerous costs of debt. This scenario isn't that far-fetched. Anyone with an adjustable rate mortgage or sizeable credit card debt should think long and hard about what could happen.
If the Fed really takes the bunch bowl away by raising - say - by 150bp over the next 12 months people with adjustable credit terms will find that E-Z financing can quickly turn into E-Z bankruptcy. While the press tells us that consumers are getting more bang for their (debt service) buck
[...]thanks in part to lower interest rates, monthly debt payments consume a smaller share of monthly income today than in late 2001.we shouldn't forget that this doesn't mean that people are actually saving money. Consumers have simply adjusted the amount of principal upwards!
To sum it up: while Eurozone consumers are saving more and spending less, US consumers are borrowing more and spending more. The US private sector has kept the economy afloat over past years - albeit at the cost of rising exposure to the vagaries of the financial markets. Households have turned into mini-banks who have to manage their assets and liabilities in such a fashion that they remain solvent. Let us hope that they're up to the task!
Want more? CurryBlog provides you with regular updates on financial markets and related subjects.
Thursday, May 13, 2004
Question
The blog's been taking a long time to open today because blogrolling.com, the site that maintains my blogroll is down (I've removed it for now.) The same thing happens whenever sitemeter is down, too.
Is there some way to make the blog first load the background and the center table where the posts are, and only then run all the scripts? Any tips will be greatly appreciated.
AB
PPI Data
Today’s BLS release of PPI data for April show a 12-month increase in producer prices of 5.1%, thanks largely to higher energy prices. That's the fastest annual PPI inflation that we've seen in a long time. (The one-month change in prices was 0.7%.) But I've said before that I think it’s more useful to look at the core inflation rate, excluding food and fuel price changes. The core rate was up just 0.2% last month, which implies a rise of about 1.5% over the past year. The core rate tells us more about the inflation pressures that the economy is generating on its own. The story there is that the core rate is rising, but from a very low level.
However, at some point sharply higher energy prices do become relevant in and of themselves. They do reduce the purchasing power of consumers in a very real way, and they often do eventually filter into other price increases. I’ve said it before and I’ll say it again: if the price of oil doesn’t start falling sometime soon (it’s still holding firm at close to $41 per barrel), it’s going to start having some very real effects on the economy this summer.
Kash
Let’s Call It What It Is
Take a look at the following opening sentence from an AP story on the crimes at Abu Ghraib:
WASHINGTON - Fresh photos showing American soldiers brutalizing Iraqi prisoners with snarling dogs or forced sex left members of Congress angry and disgusted...Why beat around the bush? Why the careful avoidance of the obvious term for “forced sex”? The pictures show soldiers committing rape.
I guess the media is (once again) taking their cue from the administration. On Monday the Pentagon’s spokesperson simply said that the photos showed “inappropriate behavior of a sexual nature.” It doesn’t sound as bad as rape when you put it that way.
By the way, in case you were wondering (as I was) if the media simply tries to avoid using the term rape in general, the answer seems to be no. A quick search of Yahoo news turned up 11,707 recent news articles that use the word rape. But interestingly, almost none of them are about the crimes at Abu Ghraib.
Kash
Campaign Fundraising
The FEC is set to rule today on the legality of soft money-funded 527 issue groups that have been working to boost or blast one candidate or the other. Indications are that the FEC will decide to postpone their decision by another 90 days. Of course, that effectively means that they’re making a decision to leave the current rules in place for the bulk of the 2004 election.
Some Republicans are saying that if the FEC does indeed decide to do that, then they are going to start using 527 groups more intensively themselves, to counter lots of ad buys by MoveOn and other such anti-Bush groups. Republicans (and some Democrats) have been surprised by the amount of money that the Kerry campaign has been able to raise, so they have unexpectedly been put slightly on the defensive regarding fundraising.
By the way, Kerry has launched a new $10 million in 10 days fundraising campaign. You know what to do.
Kash
The Abu Ghraib Prisoner's Dilemma, Revisited
If you will look to your right, you'll see that I've added The Rumsfeld Wire, an application created by the DCCC that tracks blog posts relating to Abu Ghraib and/or removing Rumsfeld. Now, I think the Abu Ghraib scandal is a true scandal, and deserving of all the abhorrence it has received and probably more, the tragic events surrounding Nick Berg notwithstanding. However, I'm actually not ready to embrace Rumsfeld's removal.
Even as I type that, I'm surprised. Rumsfeld's done little right that I can think of, and if he's been superb then I'm due for the next Nobel Prize in Economics. My primary concerns with Rumsfeld leaving his position in the next six months are the prospect of (1) the gigantic clown circus his successor's confirmation hearings would inevitably create, and (2) Paul Wolfowitz running the show in the interim. So I'm not personally advocating his ouster at this point, but I will certainly not argue with those who do, nor side with Rumsfeld's defenders. The best plan, of course, remains getting rid of the entire lot of them.
By way of contributing to The Rumsfeld Wire, I'm reprinting a post from 5/2 that I think has, sadly, proved true. (The post was no great act of prophecy; the escalation was all too predictable. But it does point to a way out -- as Lindsey Graham said, "When you are the good guys, you've got to act like the good guys.")
The Abu Ghraib Prisoner's Dilemma
Phil Carter's Intel Dump is the place to go for real-time analysis of military issues, from a former Army officer. Reading Phil's thoughts on the Abu Ghraib situation, I was struck by this passage:
What's worse is that other American soldiers may suffer for the brutal excesses of these MPs, interrogators, and OGA ("other government agency" = CIA) employees. Reciprocity is a very real thing where the laws of wars are concerned, and we should be very concerned about retaliation against any Americans captured by Iraqi insurgents in the future. Similarly, reprisals are very real problem in war; they're often fueled by anger over mistreatment of one side's own troops.Carter is describing a classic Prisoner's Dilemma: a situation in which, when two opposing parties pursue actions in their own best interest, the outcome for each is worse than if they had instead cooperated. Such instances are called prisoner's dilemmas because the canonical example is two prisoners being interrogated in separate rooms. Each suspects the other will confess and so confesses in order to receive a lighter sentence, even though they would both be better off had neither confessed. Attempting to maximize short-run gain results in each party being worse off than if they had followed a cooperative strategy.
If, however, the game is repeated indefinitely, the outcome can change. In repeated interactions, one player can reward cooperation by the other player by cooperating tomorrow. A common outcome involves tit-for-tat strategies: each side pursues the cooperative action; if, however, one side should fail to live up to its side of the deal by taking an opportunistic action, then the other side will respond by also taking the opportunistic action in the next period.
One of the more classic examples of a repeated Prisoner's Dilemma is in John Axelrod's book, The Evolution of Cooperation. There, Axelrod (*) examines accounts of trench warfare in World War I, noting how on a day to day basis, the opposing troops pursued a cooperative strategy that basically entailed not shooting every enemy soldier they could:
A fascinating case of the development of cooperation based on continuing interaction occurred in the trench warfare of World War I. In the midst of this very brutal war there developed between the men facing each other what came to be called the "live and let live system." The troops would attack each other when ordered to do so, but between large battles each side would deliberately avoid doing much harm to the other side -- provided tthat thte other side reciprocated (p. 61).Thus, there is a long history supporting Carter's claim that "reciprocity is a very real thing where the laws of wars are concerned" and we should, therefore, be very concerned about reprisals against captured Americans. Each side can realize some gain by torturing its captives (e.g., intelligence and propaganda); the cost of doing so is that their respective troops are more likely to be tortured in the future. When either side does so, it gains some strategic advantage (we assume -- otherwise they would not use torture), but over the long run, there is little relative strategic advantage when both sides employ extreme measures.
... the historical situation in the quiet sectors along the Western Front was an iterated Prisoner's Dilemma. In a given locality, the two players can be taken to be the small units facing each other. At any time, the choices are to shoot to kill or deliberately to shoot to avoid causing damage. For both sides, weakening the enemy is an important value because it will promote survival if a major battle is ordered in the sector. Therefore, in the short run it is better to do damage now whether the enemy is shooting back or not ... mutual defection is preferred to unilateral restraint [and] unilateral restraint by the other side is even better than mutual cooperation. In addition, the reward for mutual restraint is preferred by the local units to the outcome of mutual punishment, since mutual punishment would imply that both units would suffer for little or no relative gain (p. 75).
For example, just today [5/2/2004], we received the good news that Halliburton truck driver Tommy Hamill escaped after three weeks in captivity near Baghdad. Part of the reason Hamill was able to escape is that he had not been beaten, tortured, and chained. The likelihood of such restraint in the future is now, sadly, less than it was before Iraqis learned of the abuse at Abu Ghraib.
A paradoxical aspect of this situation is that to avoid the outcome in which both sides use torture, it must be the case that both sides are in fact willing to resort to torture or other vicious measures. Otherwise, the threat to punish the other side tomorrow for resorting to torture today is empty. Returning to the trench analogy, if the Germans never retaliated then the Americans would have no incentive not to shoot. It was the proven willingness of the Germans to strike back that rendered such striking back unnecessary, and vice-versa.
A second implication is that, in order to sustain the "cooperative" outcome in which torture is not used by either side, each side must also be willing to not use torture even when there are short-run benefits to doing so. Both sides have demonstrated their willingness and ability to break the cooperative, reciprocal, tacit agreement (see Fallujah and Abu Ghraib, respectively.) An open issue is whether the situation will spiral into a descending series of reprisals and counter-reprisals or whether reciprocity will emerge.
AB
(*) See Chapter 5, The Live and Let Live System in Trench Warfare in World War I.
Read This
Harsh C.I.A. Methods Cited in Top Qaeda Interrogations. The headline barely does justice to the content, about which you should be outraged (let Sen. Inhofe howl in outrage at your outrage.)
AB
UPDATE: Read this too, on Congressmembers' reactions to seeing the still classified photos and videos from Abu Ghraib:
- "Hard on the stomach lining," said Sen. Ron Wyden (D-Ore.)
- "Disgusting," said Sen. Joe Lieberman (D-Conn.) [Lieberman failed to mention that this was all fine because "The people who attacked us on September 11 never apologized."].
- "Horrible," added Sen. Lincoln Chafee (R-R.I.)
- Sen. Ben Nighthorse Campbell (R-Colo.): "These people are not members of my Army"
- Sen. Ron Wyden (D-Oreg.): "It was beyond anything that I had anticipated ... All I can tell you is that this means that it is so urgent that steps are taken to try to begin to repair the damage."
- "I saw things that made me sick," said Rep. Zoe Lofgren (D-San Jose).
- "It had nothing to do with trying to break them," said Rep. Barney Frank (D-Mass.) "It was sadomasochistic sexual degradation."
- "Even more disturbing was a video of a man who seemed to be flailing himself against a door," said Rep. Joseph Crowley (D-N.Y.), "... The nature of these photos is more inflammatory than the original photos"
- Rep. Sherwood L. Boehlert (R-N.Y.): "... no one can convince me, knowing the situation as I do, that this is all about seven reservists from Maryland ... It's about more than that."
- Sen. Feinstein (D-Ca): "[There was] not a strong chain of command in place, and the Geneva Convention was winked at. Somebody gave the order that prisoners had to be softened up, and someone came up with this idea of doing it in this disgusting way."
Wednesday, May 12, 2004
Data Roundup
Some recent tidbits of economic data that I haven’t had time to comment on:
The US trade deficit hit $46 billion in April. That’s a huge number. No one really knows how huge. I mean really, who actually can grasp how big a million is, much less a billion, much less 46 billion? (I’m feeling a bit like Douglas Adams at this point, but nevermind.) Yet still, I can’t get worked up about a big trade deficit like the US currently has. Trade deficits can be good and can be bad, just like a trade surplus can be good or bad. I think the US has plenty of other more fundamental, underlying problems to worry about.
Import prices rose 0.2% in April, which was a rather small increase (for which we can thank the stronger dollar in April). But still, for the past year import prices are up 4.6%, which goes some way toward explaining the recent rise in inflation in the US.
Oil prices have continued their climb, and crude oil is now nearing $41 per barrel. Gasoline prices rose in lockstep.
Tax refunds rose an average of just $98 this year compared to last year. That’s a rather smaller number than the optimistic $300 that the Treasury Department had predicted a couple of months ago. But of course since the Treasury Department's analysts are not influenced by politics, we know that this was just an honest mistake on their part.
That's all for now.
Kash
Now In Graph Form
I thought the approval/disapproval numbers from the previous post might look nice in graphical form. Here is the result:
Notice any trends? Interestingly, the recent sharp approval drop/dissaproval spike appears to be simply an acceleration of a pre-existing trend.
AB
Waking Up and Smelling The Coffee
But why did it take so long?
President Bush's overall approval rating has fallen to the lowest level of his presidency, 44 percent, in the latest CBS News poll, reflecting the weight of instability in Iraq on public opinion of Mr. Bush even as the economy shows signs of improvement.And this is probably the worst news for the President:
Two weeks ago, 46 percent of Americans approved of the job President Bush was doing. On April 9, his approval rating was 51 percent.
American's opinion of Mr. Bush's handling of the economy is also at an all-time low, 34 percent, while 60 percent disapprove, also a high of the Bush presidency. Increasing employment is seemingly not affecting Americans' view of Mr. Bush's economic policy.
... The highest figure ever recorded, 64 percent, say the result of the war in Iraq has not been worth the cost in lives or money. Only 29 percent, the lowest figure yet, believe the war has been worth it. And just 31 percent of Americans now say the United States is winning the war.
BUSH’S HANDLING OF CAMPAIGN AGAINST TERRORISMIf voters lose their faith in Bush's ability to conduct the War on Terror, or at least to keep American safe, then he's basically got nothing compelling, outside of his appeal to the Religious Right, on which to run. More tax cuts? Been there done that. More steel tariffs? Not a net vote-getter. More prescription drug plans? Republicans will revolt. More NCLB? States, including ones with Republican governors, will revolt.
Approve
Now51%
Two weeks ago
12/2003
Disapprove
Now
Two weeks ago
12/2003
Am I missing anything? Once you get past tax cuts, there's really not much of a domestic agenda.
Some Modestly Positive News
Cisco is hiring:
Cisco Systems's announcement yesterday that it plans to hire 1,000 more workers is sure to bring throngs of out-of-work technology workers streaming into the city hoping that the company's expansion, coupled with Google's IPO, signals that the boom is officially on again.This is presumably an indication that the commmunications companies that comprise Cisco's customers are increasing their infrastructure investment (or at least have stopped reducing it.)
AB
Monday, May 10, 2004
From the Huh? Department
Via Mark Kleiman, Time is reporting that
It's not exactly every day that the Pentagon warns military personnel to stay away from Fox News. But that's exactly what some hopeful soul at the Department of Defense instructed, in a memo intended to forbid Pentagon staff reading a copy of the Taguba report detailing abuse of detainees at prisons in Iraq that had been posted at the Fox News web site.Time put the original email up as well:
Fox News and other media outlets are distributing the Tugabe report (spelling is approximate for reasons which will become obvious momentarily). Someone has given the news media classified information and they are distributing it. THE INFORMATION CONTAINED IN THIS REPORT IS CLASSIFIED. ALL ISD CUSTOMERS SHOULD ...I suppose that, in writing that "spelling is approximate for reasons which will become obvious," the sender meant that it was so secret that even he hadn't read the report and learned the author's name. You can read the executive summary of the report here and the full report here. In keeping with Pentagon directives, neither source is Fox News.
AB
Bush’s Disapproval Ratings
The bad news for Bush throughout late March and April – including the Clarke revelations about Bush’s lack of focus on terrorism, his reluctantly-given personal testimony in front of the 9/11 commission, and the sharp increase in violence in Iraq – all seemed to have no effect on how the US public viewed Bush’s presidency. In fact, if anything the adversity seemed to improve people’s opinions of him.
But in the past week or two that may have begun to change. Gallup’s new poll, reported by PollingReport.com, shows George Bush’s disapproval ratings above 50% for the first time in his presidency:
Clearly the horrible stories about prisoner abuse in Iraq at the hands of the US military bothers people in a way that events in March and April did not. Furthermore, poll results such as these may indicate that many people believe that the crimes at Abu Ghraib reflect poorly on George Bush’s presidency, not just on a few individual members of the military.
The White House may want to move up their date for a dramatic OBL capture.
Kash
Looks Like Kash Was Right
Earlier this morning, Kash wrote, "this Could be a Bad Day for Wall Street." Now from CNN, we see that
Stocks tumbled for a second straight session Monday on worries that interest rates will rise soon, pushing the Dow Jones industrial average below 10,000 for the first time since December.The major indices were off between 1-1.25%. While this is only one day's worth of data, it does highlight the risk that massive deficits will lead to long term interest rate increases, crowding out private investment.
AB
The Triumph of The Hacks
Dana Milbank and Jonathan Weisman covered little new ground, but they did pen a great overview of how and why policy-making -- domestic and foreign -- is so consistently wrong in this administration:
... Bush has also discouraged the sort of free-wheeling policy debates that characterized previous administrations, and he relies on a top-down management style that has little use for "wonks" in the federal bureaucracy. At the same time, many of the top domestic policy experts in the Bush White House have moved on to other jobs; in many cases they have been replaced by subordinates with much less experience in governing.AB
Bruce Bartlett, a conservative economist with the National Center for Policy Analysis, said policy ideas typically bubble up from experts deep inside federal agencies, who put together working groups, draft white papers, sell their wares in the marketplace of ideas and hope White House officials act on their suggestions. In this case, ideas are hatched in the White House, for political or ideological reasons, then are thrust on the bureaucracy, "not for analysis, but for sale," Bartlett said.
'The Triumph of the Hacks'
The result is a White House that has become unimaginative with domestic policy and, in foreign policy, has struggled to develop new policies to adapt to changing circumstances in Iraq, according to several conservatives...
P.S. In other news,
the cost of the war in Iraq could top $150 billion through the next fiscal year - as much as three times what the White House had originally estimated. And, according to congressional researchers and outside budget experts, the war and continuing occupation could total $300 billion over the next decade, making this one of the costliest military campaigns in modern times.
Who Wrote This?
The one anti-war argument that, in retrospect, I did not take seriously enough was a simple one. It was that this war was noble and defensible but that this administration was simply too incompetent and arrogant to carry it out effectively. I dismissed this as facile Bush-bashing at the time. I was wrong.Surprising answer here. (Via CalPundit.)
AB
UPDATE: Kevin's got more questioning thoughts from unlikely suspects. This is starting to remind me of the five stages of response to a loss:
(1) denial,I've seen denial (We'll find the WMD and they'll give us flowers. They love us and we're restoring electricity.), and bargaining (Hey, it's not as bad as what Saddam did. Plus it's only a few bad apples.) The writers Kevin quotes appear to be somewhere around the border between anger and despair. When acceptance comes, will it carry an endorsement of John Kerry?
(2) bargaining,
(3) anger,
(4) despair, and
(5) acceptance.
This Could be a Bad Day…
…for Wall Street. Sharply higher US interest rates have spooked many markets around the world:
NEW YORK (Reuters) - Stocks were set to sink at the open on Monday as fears the Federal Reserve (news - web sites) will raise interest rates as early as June weighed on markets around the world.As I said the other day, it seems that we may now find out how robust the US economy is to higher interest rates.
…Overnight in Japan, stocks fell sharply, with the TOPIX index posting its biggest percentage drop [of about 5%] since the September 11, 2001 attacks as the prospect of higher U.S. interest rates fanned fears of further Wall Street losses.
Kash
Sunday, May 09, 2004
That Sinking Feeling
Apparently more and more of the US military’s leadership has it. From today’s Washington Post:
U.S. May Be Winning Battles in Iraq But Losing the War, Some Officers SayPerhaps in addition to more tanks, the Defense Department should order more historians.
Deep divisions are emerging at the top of the U.S. military over the course of the occupation of Iraq, with some senior officers beginning to say that the United States faces the prospect of casualties for years without achieving its goal of establishing a free and democratic Iraq.
…Army Col. Paul Hughes, who last year was the first director of strategic planning for the U.S. occupation authority in Baghdad, said he agrees with that view and noted that a pattern of winning battles while losing a war characterized the U.S. failure in Vietnam. "Unless we ensure that we have coherency in our policy, we will lose strategically," he said in an interview Friday.
"I lost my brother in Vietnam," added Hughes, a veteran Army strategist who is involved in formulating Iraq policy. "I promised myself, when I came on active duty, that I would do everything in my power to prevent that [sort of strategic loss] from happening again. Here I am, 30 years later, thinking we will win every fight and lose the war, because we don't understand the war we're in."
Kash
Baghdad Art Mirrors Baghdad Life
Submittted with only one comment: it "was fashioned two months ago":
We are living in an American democracy
AB
Saturday, May 08, 2004
Why is George Bush President?
Matt Yglesias asks this question today, with a follow-up from Kevin Drum. Specifically, he says:
There was no reason whatsoever back in 1994 to think that George W. Bush was the best choice the Republicans had to run for governor of Texas -- he was totally unqualified. His entire political career has been utterly devoid of real accomplishments, he's just a kind of inept loafer relying on his father's name and connections, and the assistance of more competent people willing to humble themselves by working for him.The answer, I think, is that the Republican party leadership – fiercely determined and extremely disciplined – were able to arrange some unprecedented coordination before the primary season. In the late 1990s, various factions of the Republican Party, bitter after several years of a Democrat in the White House (and their failure to impeach Clinton), were casting about for the candidate for President in 2000. And then something remarkable happened, in 1998 and 1999 – the leaders of those various factions (I don’t mean individuals, but rather small groups of individuals) were able to agree that George W. Bush was both acceptable to each faction and appealing to the general electorate. With this agreement, they were able to unite the vast majority of Republicans – and Republican money – behind Bush’s candidacy. This gave him the giant head start that an otherwise mediocre candidate would need to win the presidency.
So the next question is: what was it about GWB that caused Republicans to unite behind him so early in the political cycle? I won’t go into details about my opinion right now, but I think it had to do with a few simple traits. Bush was: the heir to a nationally prominent family name; deeply conservative while having a moderate public image; well-connected with the national Republican establishment; from a large, vote-rich state; a governor; personally likeable; and popular in his home state. If you're a Republican looking for a candidate with this sort of resume in 1999, there's exactly one person who fit the description. And among the American public, these facts were able to mask the fact that Bush was not really qualified to be President.
Kash
Food for Thought
If Rumsfeld resigns heeds an urge to spend more time with his family, wouldn't that mean that Paul Wolfowitz will, at least temporarily, be in charge of The Pentagon? Can Wolfowitz's family preemptively ask him to spend more time with them?
AB
A fish rots from the head down ...
... until it's just a big, stinking, oozing pile of offal:
The experts also point out that the man who directed the reopening of the Abu Ghraib prison in Iraq last year and trained the guards there resigned under pressure as director of the Utah Department of Corrections in 1997 after an inmate died while shackled to a restraining chair for 16 hours. The inmate, who suffered from schizophrenia, was kept naked the whole time.From the NYT, by way of Josh Marshall. Doesn't The Pentagon check backgrounds on people before they hire them for jobs like running prisons in Iraq? Yes, I'm sure such checks are routine, but the question is what they are checking for.
The Utah official, Lane McCotter, later became an executive of a private prison company, one of whose jails was under investigation by the Justice Department when he was sent to Iraq as part of a team of prison officials, judges, prosecutors and police chiefs picked by Attorney General John Ashcroft to rebuild the country's criminal justice system.
AB
P.S. Speaking of Abu Ghraib, be sure to read this post by Ogged of Unfogged.
UPDATE: If you want to read just one heart-tugging story this weekend, I recommend this one on Pat Tillman's funeral (Max is definitely right about Ted Rall.) It is, of course, not a happy story, but it does show the human side of the Americans fighting and dying in Iraq and around the world.
Friday, May 07, 2004
Digby's The Leviathan
Digby:
... It's hard to tell who's bad or good and it's not enough to simply assert that one group is and one isn't. We need systems and institutions to sort these things out in the most perfect way we can find and those systems and institutions are imperfect indeed. If we ever had a strength in America, a source of pride and superiority, it was that we put our trust in the rule of law not men.You really should be reading Digby's Hullabaloo anyway, but in case you haven't been, here's a tip: start. He's really been on a roll with his coverage of the recently revealed outrages in Iraq. Also, don't miss this post on Joe "Outraged by Blowjobs But Not by Torture" Lieberman's statment today that "The people who attacked us on September 11 never apologized. [He continued in a similar vein for 1-2 minutes.]" I won't spoil it all, but here's an excerpt from the exciting conclusion:
And that is precisely the opposite of what our president has been saying. He's said "trust us" because we are good. We don't need to provide any explanations or adhere to any laws, treaties or agreements because the character of our people doesn't require it. And that is why these pictures are being greeted around the world with both horror and glee...
By this [Lieberman's] logic, until we see some apologies from the Japanese, the Germans, the Brits and especially the French, it's perfectly ok for us to kill as many Canadians as we want.Also see ... just read the whole blog.
Just as long as nobody gets any consensual, unphotographed blow jobs. That would be immoral.
AB
Why TV Reporters Should Avoid Using Numbers
From a Thursday story on Survivor: All-Stars by Dennis Cass, who "writes about television for Slate":
According to a "tribal tidbit" on CBS's official Survivor site, 10 of the castaways (including all four sole survivors) have been voted out earlier than they were during their first time around. In most games, experience makes you a better player, but with Survivor it seems that the more you play, the worse you get.Yes. That does prove it. You see, if you start with 18 high finishers and 10 of them finish worse this time around than the time before when they finished high, then they are clearly worse at the game this second time around. If you're not yet convinced, note that from the parenthetic it's clear that not one of the four former winners was able to improve upon their prior performance and, stunningly, more than one of them did worse!!
In related news, shrinking deficits are invariably followed by rising tax revenues.
AB
The Bond Market Reacts
Apparently the bond market was taken by surprise by this morning’s employment report. The interpretation clearly seems to be that this is a strong sign that the economic recovery is seriously gathering strength, so interest rates are set to rise. Here is the yield on the 10-year bond over the past 5 days:
(note: interest rate expressed in tenths of a percentage point, so 45 = 4.5%.)
Note that of the 15 basis point rise in long term interest rates this morning, 11 of them reflect an increase in the real interest rate, and 4 of them reflect an increase in inflation expectations. (To see this, check the change in yields on inflation indexed and non-indexed treasuries, available here among other places.) For bonds of shorter maturity the carnage has been even worse this morning. Perhaps now we’ll see how robust the economic recovery is to noticeably higher interest rates.
Kash
p.s. Also note that the price of oil hit $40 per barrel this morning, for the first time since 1991. Not that $40 is a particularly magical figure, but landmarks like that always catch people's attention.
April Employment
The BLS’s newly released employment report for the month of April showed that the unemployment rate fell slightly to 5.6%. More importantly, it showed net job creation in the US of 288,000 jobs during the month. According to CNN/Money, the average forecast was for 173,000 new jobs, so this comes as a positive surprise, for the second month in a row.
This is a big, big number. In the wake of last month’s upwardly revised 337,000 new jobs, this number takes on added significance. One month of good job growth might be a fluke; two months is more likely the start of a trend. The recovery finally seems to be generating new jobs in a sustained way. Here’s the recent history of employment in the US:
With a little luck, this incipient recovery in the labor market will start translating into higher real incomes for average families; they have not been doing well in this recovery, especially compared to those hardworking individuals and married couples upon whom the Bush administration has showered much lavish attention.
Kash
Capturing the US Media’s Attention
It’s yet another a sad commentary on the state of the US media that (with rare exceptions, such as this and this) they completely ignored the stories of the crimes being committed in Abu Ghraib prison until there were pictures. The stories had been circulating for months, however. It seems that Arab language news channels regularly reported on it, and today’s NYTimes reports on the fact that the Red Cross had been complaining about the abuses since last fall.
One tidbit of interest about the reports that the ICRC presented months ago of abuses in the prisons of Iraq:
In addition, [the ICRC spokesman] said, the reports were given to senior officials in the Bush administration, but he declined to say which ones.It looks like we can expect the reveleations regarding who knew what and when to keep coming.
He said that it was the committee's practice to make its complaints known widely inside a government to prevent any one person from sitting on the report, allowing senior officials to claim ignorance later on.
Kash
Thursday, May 06, 2004
Kerry on Abu Ghraib
Kerry:
"As president I will not be the last to know what is going on in my command. I will demand accountability for those who serve, and I will take responsibility for their actions."That sounds about right.
"And I will do everything that I can in my power to repair the damage that this has caused to America's standing in the world and to the ideals for which we stand."
No mention yet of whether Bush or Rumsfeld have read the Taguba Report detailing the abuses. But Bush is standing by his man:
"He will stay in my Cabinet."AB
Oil Prices Keep Rising
The price of crude oil hit a new high yesterday (for the year, at least) of nearly $40 per barrel. The price of gasoline rose in lockstep. Prices at the pump will keep rising as long as the price of crude oil does.
Many analysts say that the price of oil has primarily risen due to an increase in the risk premium attached with oil, due to things like this week’s attack on oil facilities in Saudi Arabia. (Yes, high demand in China has certainly played some role, but I’m not convinced that China’s demand has changed that much in the past few months.) If the increased risk premium is indeed the principal cause of the recent run-up in oil prices, then I fear that the increase could be with us for a while – I don’t foresee any reduction in the risks to oil facilities in the middle east any time soon. Furthermore, I’m starting to think that this rise in oil prices, if it’s sustained for a little longer, will start to have some noticeable negative effects on the economy this summer. We may have a slowdown in the economy later this year after all.
Kash
Postcards from Old Europe - Consume your house!
Note: due to extensive traveling without access to the web this postcard is a day early.
As the past columns have been very Euro-centric I guess that it is high time to shift my view back to the goings-on in the US. While household demand has been flagging in Europe the US consumer has been a bastion of strength over the past couple of years. This is pretty astounding if you consider that the most recent past has seen a stock market crash and rising unemployment. One would think that these negatives would have led many households to retrench and start to consolidate their personal finances. This didn't happen. Consumers kept their wallets open - the only question is: "where did the money come from?".
Let's take a quick look at the numbers to set the stage: Household wealth saw massive equity-driven gains up to the year 2000. Holdings of equities and mutual funds peaked in 2000 at around 12 trillion dollars and then fell by around 25% before making a come-back over past couple of months. The year 2000 is also significant because it saw equity wealth overtake real estate wealth for the first time. The subsequent reduction in value of stocks (i.e. bubble-bursting) served to push houses back on top of the household wealth heap by 2001.
In the years after 2000 US households saw two things: their stocks were racing for the bottom while the value of their homes started taking off. This rise in real estate wealth took some of the sting out of looking at the diminishing value of the investment portfolio. For many families rising house-prices meant rising household wealth - even after taking into account the losses in other investments.
But while a single call to your broker will release the gains (losses) in your trading account selling a home isn't that easy. But wait, why sell? The financial service industry provides you with a host of possibilities to release all that equity locked up in your home! But that's not all - there's more! You can even deduct interest paid on home equity lines of credit (and mortgages) from income for tax purposes!
Let us take a step back here and look at what used to happen: a family would identify a home it wanted to buy and then make a down payment and finance the balance. The next couple of years would see the equity in the home increase primarily by the act of the family paying down the debt. If the family was lucky they would see interest rates fall which would then lead them to refinance their mortgage, thereby saving money. If the family was really lucky they would also see the price of their home rise.
This is what has been happening on a massive scale over the past couple of years. Rates have been falling while prices have been shooting upwards. This confluence of positive forces ignited a rocket in home equity which consumers have been riding hard.
A look at the Fed's Flow of Funds reports gets us the data. The carving out of home equity can be calculated by subtracting the growth in residential investment from the growth in mortgage debt. The amount of equity extraction has been staggering over the past two years! The past has only rarely seen phases of equity extraction at all! The last 20 years were characterized by homeowners paying down debt - i.e. investing equity!
Equity extraction peaked in the middle of 2003 at a time where the FOMC saw deflation just around the corner and interest rates on mortgages were at near-record low levels. These equity take outs boosted consumer disposable incomes by up to 3% - at a time when wages and salaries remained mostly flat. No wonder that the growth in consumption managed to outstrip the growth in "real" income.
But real income via wages is coming firmly back into focus. Interest rates are creeping up and most everyone who has wanted to refinance has refinanced by now. Momentum in existing home sales is moderating as record-high prices will probably see affordability drop and turnover moderate. Any slowdown in home equity extraction could lead to less consumption if disposable income doesn't get a boost via rising wages or from other sources. The missing tax refunds are not helping either!
To sum it up: consumers have been spending all through the recession and the following phase of economic weakness. As wages and salaries have been flat while the stock market has been sputtering, consumers have tapped into home equity to sustain their spending binge. As this possibility is becoming less attractive, consumers need other sources of income to compensate. Just one more reason why everyone is so focused on the payroll data.
Just a thought to finish off with: what happens if house prices fall?
Thank you for reading. If you'd like to read more of my ramblings, be sure to visit CurryBlog.
Evil Limbaugh Update
World O' Crap adds to Digby's case for Rush's evilness, though perhaps it's just the drugs (or maybe the jonesing) talking.
AB
Stupid Liberal Media
Well, the media actually aren't liberal. But there's a good case to be made for stupidity. The latest comes via today's Washington Post:
Registered lobbyists gave President Bush $1.8 million and Sen. John F. Kerry (D-Mass.) $520,000 in campaign contributions from Jan. 1, 1997, through March 31 this year, according to a study by the Center for Public Integrity.Let's spot the logical flaws in this analysis:
The amounts, while impressive in absolute terms, are tiny compared with total donations received by the politicians. Bush collected $228.4 million and Kerry took in $36.9 million over the period from people who gave $200 or more, additional numbers supplied by the nonpartisan research group show. Total contributions are higher but the campaigns are not required to disclose the names of people who give less than $200.
Over the period, 1,310 registered lobbyists contributed to Bush and 442 registered lobbyists gave money to Kerry, the center said. These numbers, too, are small compared with the total number of donors to both men. Bush had 156,989 contributors who gave $200 or more and Kerry had 30,223 individuals who gave similar amounts, according to the center.
Proportionately, Kerry had more lobbyist donors than Bush did. Registered lobbyists represented 0.8 percent of Bush's donors and of his itemized contributions, compared with 1.4 percent of Kerry's through March 31.
- The reporter (who gets his data from the Center for Public Integrity, though I can't find the exact report there) uses the time period from 1/1/1997 to 3/31/2004 to compare the two candidates' contributions from lobbyists. Given that for half of those years Kerry was a senator while Bush was a governor, this surely distorts the comparison, and most likely in a way unfavorable to Kerry. Particularly if the data only come from the Federal Election Commission then this statistic compares 7 years of Kerry's funding to 4 years of Bush's. Unfortunately, the article doesn't explain exactly what's being compared. But it's assuredly not apples-to-apples. If the objective is to describe how beholden each candidate is to lobbyists, then the meaningful statistic is contributions from lobbyists in the current election cycle.
- The reporter's claim that "Proportionately, Kerry had more lobbyist donors than Bush did" is also very suspect. The reporter first says that he's only looking at contributions of $200 or more and then claims that, since 1997, 1.4% of Kerry's funding is from lobbyists while only 0.8% of Bush's is. This comparison is specious because Kerry draws more from small donors than Bush. From the Campaign Finance Instutute:
... with less than five months of fundraising left in the pre-convention period, Bush had raised 71% of his $182 million primary period total in $1,000 and over donations (57% from $2000 contributions) and 20% in small donations. Kerry, less than four months from the Democratic convention, had raised 54% of his $75 million total in $1,000 and over contributions (32% from $2000 donations) and 29% in small donations
Adjusting total funds for the differences in excluded small donations, about 0.64% of Bush's funding and 1% of Kerry's are from lobbyists, which is a noticeably smaller gap. (When I started this post, I suspected this adjustment would wipe out all or most of Kerry's lead in fundraising from lobbyists. Funny how data work out sometimes. I suppose I could have followed the lead set by AEI's Kevin Hasset.)
The long and short of this is that if a reporter (1) Ignores a big chunk of Kerrry's donations and (2) Compares time periods which no sane analyst would consider comparable, then he can contend that "the results are surprising given Kerry's criticism of Bush for being close to corporate lobbyists."
AB
P.S. I can't figure out why the CPI, and by extension the Washington Post reporter, only look at $200+ contributions when the full data are available. For example, a quick check of fundrace.org for the Cleveland Park area of Washignton, DC shows all contributions, including those under $200.
Wednesday, May 05, 2004
Plenty of Blame to Go Around
Day by day, the scope of the prisoner abuse crimes grows. The number of prisoners suspected of being murdered by US guards and interrogators has now risen to 14. President Bush pled his case on a pair of Arab news channels today, Al-Arabiya and the new US-funded channel Al-Hurra. (Al-Jazeera was not granted an interview - apparently the Bush administration would like to reduce A-J's market share in any way that they can, even at the cost of getting their message out to fewer people in the Arab world.)
The Washington Post today wrote in an editorial that the crimes were the result of certain institutional failures. The Post specifically cites Rumsfeld's decision two years ago to institute "a system of holding detainees from Afghanistan not only incommunicado, without charge, and without legal process, but without any meaningful oversight mechanism at all," in addition to the fact that Congress has "neglected its responsibility to oversee the administration's conduct."
But I suspect that the source of the failure is far deeper. One of the Bush administration's guiding principles since entering office has been that international rules and norms do not apply to the US. (Just think about the Kyoto Protocol, treaties governing nuclear proliferation, and the International Criminal Court at the Hague, for examples.) The Bush administration has taken the following lesson from the fact that the US is the world’s lone remaining superpower: since no one in the world has the military or economic leverage that the US does, the US has no reason to heed the opinions of the rest of the world. The attitude conveyed by Bush has been that the US is accountable to no one. In other words, the US has the ability to be a bully among nations, and under the leadership of George Bush has in fact acted like one in many situations.
This zeitgeist, this sense that it’s okay for the US to use its overwhelming might to do what it wants without fearing the consequences, has percolated down through the pay scale of the government, and probably throughout the nation in general to some degree. The soldiers in the prison of Abu Ghraib were thus simply putting into practice the Bush administration’s doctrine of bullying the rest of the world, albeit on a very small scale. But it was the exact same doctrine. Responsibility for the crimes at Abu Ghraib thus lie squarely at the feet of the man who sets the tone of the US’s international dealings – George Bush.
Kash
Bond Yields
In the wake of the Fed’s meeting and press release yesterday, it’s time to check in with the bond market. The Fed’s announcement apparently came as no major surprise to the bond market, for yields changed very little. But over the past six weeks we’ve seen quite a major increase in long-term interest rates:
(Note: yield expressed in tenths of a percentage point, so 45 = 4.5%)
Interestingly, the increase in yields recently primarily reflects an increase in inflation expectations, not an increase in real interest rates. One can see this by comparing the yields on inflation adjusted bonds and regular, non-inflation adjusted bonds.
Expectations of inflation have increased steadily over the past 18 months, but the real (i.e. inflation adjusted) interest rate has not risen at all -- in fact, it's actually fallen a bit. What does this mean? One possible explanation is that the bond market doesn’t expect the demand for borrowing in the economy to increase much from current levels. Given that the bond market has learned a lot about the future course of government borrowing during the past 18 months, the fact that they expect overall borrowing in the US to remain roughly constant may imply an expectation that private sector borrowing will not increase much. Could this be a sign that the bond market isn’t expecting much of an economic boom over the next few years?
Kash
Monday, May 03, 2004
Is Rush Limbaugh Evil?
If you asked me on Friday I would have said "No, he's not really evil. More of an opportunistic loud-mouth junkie with a talent for fooling and entertaining the dim-witted and foolhardy." Digby, in a lengthy post that you should read all the way to the final paragraph's evoking of images from the dramatic "I'm a nerd, too!" end to the first Revenge of The Nerds movie, goes a long way towards changing my mind.
In related news, Digby draws his source material from Media Matters for America, a new site run by David Brock and "dedicated to comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media." Brock, for those who did not read Blinded by The Right, Brock was a former right-wing hit man who orchestrated the attacks on Anita Hill and was also behind many of the efforts to find people in Arkansas who would say bad things about Bill Clinton (in exchange for money and/or fame, of course.) Brock has since converted to the side of light and reason, but he has the history to know that of which he speaks when it comes to "conservative misinformation."
AB
P.S. I am a liberal and a Democrat, too.
Speaking of Buffet
Berkshire-Hathaway's annual shareholder meeting was held last weekend. Buffet invariably has a great line on any topic, and it looks like his designated successor right-hand man, Charlie Munger, is pretty good too. Here's Warren and Charlie on expensing stock options:
On stock optionsAnother good line arose in their discussion of CEO pay when Munger quipped, "I would rather throw a viper down my shirtfront than hire a compensation consultant" (compensation consultants are usually hired by the CEO and their prospects of being rehired in the future often depends in no small part on how much they recommend the CEO be paid.)
"... Write your congresspeople giving them your views on whether options should be expensed," said Buffett. "It was a disgrace 10 years ago when Congress bludgeoned the SEC and the [Financial] Accounting Standards Board to override FASB's decision to expense options. It accelerated the anything-goes mentality of the 1990s."
Buffett then told the crowd a story about a 19th-century bill in the state of Indiana that sought to "change" the value of pi.
"It seems there was a fellow who discovered some new relationship between circumference and diameter that would help students learn a better kind of geometry, so he wrote a law to change the value of pi from 3.14159 etc. to 3.20. It passed the Indiana house -- until the Indiana senate finally thought better of it."
After the audience stopped laughing, Buffett came to his point about options, "The U.S. Senate concluded that the world was flat, because their their contributors paid them enough to say the world was flat."
Then Munger weighed in: "It's worse than that. Those people who wanted to round pi to 3.2 were stupid. These people [the opponents of expensing options] are worse than stupid. They know it's wrong and want to do it anyway."
AB
Some Remarkable Statistics on China
In today’s piece, Stephen Roach of Morgan Stanley presents some amazing statistics on China’s economy. Here’s a sampling:
In March 2004, [China's] growth of industrial value added had surged to an astonishing 19.4% above its year-earlier level.Roach makes the point that when China’s economy slows (something that the government is currently trying to gently engineer), there will be repercussions far beyond China’s borders. Such statistics provide some compelling evidence that he will be right.
...[O]ur calculations suggest that China’s increase in industrial output in 2003 was about eight times as large as that of the United States.
...China’s leadership is most focused on bringing the nation’s runaway investment cycle back under control; growth in fixed asset investment spiked at an outsize 43% YoY rate in the first quarter of 2004.
...While [China] accounts for only about 4% of nominal GDP, in 2003 its portion of the world’s total materials consumption ballooned: For crude oil, it hit 7%; for aluminum it was 25%; for steel products, it was 27%; for iron ore, it was 30%; for coal, it was 31%; and for global cement consumption, China’ s 2003 share hit an astonishing 40%.
They also provide a pretty good argument for a Chinese revaluation later this year. I had been thinking that the revaluation would happen very late this year or, more likely, in 2005; I’m increasingly wondering if the revaluation can wait that long. The Chinese government may use it earlier than that, as an extremely effective way to curb inflation (especially in imported commodities) and to slow what I would describe as utterly manic business investment.
Kash
Steve Jobs and Warren Buffet
Both are backing John Kerry. So if you like iTunes, you'll love John Kerry.
Buffet did advise Shwarzenegger as well, but I won't hold that against him. Maybe he'll address it in his next shareholder's letter.
AB
The Abu Ghraib Prisoner's Dilemma
Phil Carter's Intel Dump is the place to go for real-time analysis of military issues, from a former Army officer. Reading Phil's thoughts on the Abu Ghraib situation, I was struck by this passage:
What's worse is that other American soldiers may suffer for the brutal excesses of these MPs, interrogators, and OGA ("other government agency" = CIA) employees. Reciprocity is a very real thing where the laws of wars are concerned, and we should be very concerned about retaliation against any Americans captured by Iraqi insurgents in the future. Similarly, reprisals are very real problem in war; they're often fueled by anger over mistreatment of one side's own troops.Carter is describing a classic Prisoner's Dilemma: a situation in which, when two opposing parties pursue actions in their own best interest, the outcome for each is worse than if they had instead cooperated. Such instances are called prisoner's dilemmas because the canonical example is two prisoners being interrogated in separate rooms. Each suspects the other will confess and so confesses in order to receive a lighter sentence, even though they would both be better off had neither confessed. Attempting to maximize short-run gain results in each party being worse off than if they had followed a cooperative strategy.
If, however, the game is repeated indefinitely, the outcome can change. In repeated interactions, one player can reward cooperation by the other player by cooperating tomorrow. A common outcome involves tit-for-tat strategies: each side pursues the cooperative action; if, however, one side should fail to live up to its side of the deal by taking an opportunistic action, then the other side will respond by also taking the opportunistic action in the next period.
One of the more classic examples of a repeated Prisoner's Dilemma is in John Axelrod's book, The Evolution of Cooperation. There, Axelrod (*) examines accounts of trench warfare in World War I, noting how on a day to day basis, the opposing troops pursued a cooperative strategy that basically entailed not shooting every enemy soldier they could:
A fascinating case of the development of cooperation based on continuing interaction occurred in the trench warfare of World War I. In the midst of this very brutal war there developed between the men facing each other what came to be called the "live and let live system." The troops would attack each other when ordered to do so, but between large battles each side would deliberately avoid doing much harm to the other side -- provided tthat thte other side reciprocated (p. 61).Thus, there is a long history supporting Carter's claim that "reciprocity is a very real thing where the laws of wars are concerned" and we should, therefore, be very concerned about reprisals against captured Americans. Each side can realize some gain by torturing its captives (e.g., intelligence and propaganda); the cost of doing so is that their respective troops are more likely to be tortured in the future. When either side do so, it gains some strategic advantage (we assume -- otherwise they would not use torture), but over the long run, there is little relative strategic advantage when both sides employ extreme measures.
... the historical situation in the quiet sectors along the Western Front was an iterated Prisoner's Dilemma. In a given locality, the two players can be taken to be the small units facing each other. At any time, the choices are to shoot to kill or deliberately to shoot to avoid causing damage. For both sides, weakening the enemy is an important value because it will promote survival if a major battle is ordered in the sector. Therefore, in the short run it is better to do damage now whether the enemy is shooting back or not ... mutual defection is preferred to unilateral restraint [and] unilateral restraint by the other side is even better than mutual cooperation. In addition, the reward for mutual restraint is preferred by the local units to the outcome of mutual punishment, since mutual punishment would imply that both units would suffer for little or no relative gain (p. 75).
For example, just today, we received the good news that Halliburton truck driver Tommy Hamill escaped after three weeks in captivity near Baghdad. Part of the reason Hamill was able to escape is that he had not been beaten, tortured, and chained. The likelihood of such restraint in the future is now, sadly, less than it was before Iraqis learned of the abuse at Abu Ghraib.
A paradoxical aspect of this situation is that to avoid the outcome in which both sides use torture, it must be the case that both sides are in fact willing to resort to torture or other vicious measures. Otherwise, the threat to punish the other side tomorrow for resorting to torture today is empty. Returning to the trench analogy, if the Germans never retaliated then the Americans would have no incentive not to shoot. It was the proven willingness of the Germans to strike back that rendered such striking back unnecessary, and vice-versa.
A second implication is that, in order to sustain the "cooperative" outcome in which torture is not used by either side, each side must also be willing to not use torture even when there are short-run benefits to doing so. Both sides have demonstrated their willingness and ability to break the cooperative, reciprocal, tacit agreement (see Fallujah and Abu Ghraib, respectively.) An open issue is whether the situation will spiral into a descending series of reprisals and counter-reprisals or whether reciprocity will emerge.
AB
(*) See Chapter 5, The Live and Let Live System in Trench Warfare in World War I.
Bremer Then and Bremer Now
Paul Bremer, Feb. 26, 2001:
"The new administration seems to be paying no attention to the problem of terrorism. What they will do is stagger along until there's a major incident and then suddenly say, 'Oh, my God, shouldn't we be organized to deal with this?'Pau Bremer today:
"That's too bad. They've been given a window of opportunity with very little terrorism now, and they're not taking advantage of it."
"Criticism of the new administration, however, was unfair. President Bush had just been sworn into office and could not reasonably be held responsible for the Federal Government's inaction over the preceding 7 months ... I regret any suggestion to the contrary. In fact, I have since learned that President Bush had shared some of these frustrations, and had initiated a more direct and comprehensive approach to confronting terrorism consistent with the threats outlined in the National Commission report.And no. I didn't embellish the more recent quote (both quotes in this story.) Is there anyone -- besides Richard Clarke -- that the administration does not have compromising photographs of?
"I am strongly supportive and grateful for the President's leadership and strategy in combating terrorism and protecting American national security throughout his first term in office."
AB
Reputation Update
In the previous post, I wrote that Brad DeLong might have been a bit hasty in saying, "No one, absolutely no one, is getting out of this administration with even the shreds of a reputation." My counter example was, and so far remains, Mark McClellan (previously in charge of the FDA, now heading the lower profile but quite possibly more important CMS.)
Now, Brad reconsiders, slightly:
Some say (with justice) that Tim Muris is going to get out of the Bush administration with his reputation intact. Others say that Mark McClellan is going to get out of the Bush administration with his reputation intact. Perhaps they are right.I agree that FTC head Tim Muris also still has his credibility. The total as it stands, then, is two. Am I missing anyone else? (Note that "credibility" and "advocating policies with which I agree" are two different things.)
AB
Saturday, May 01, 2004
Medicare.gov
Seniors basically don't like the Republican prescription drug plan. We've known that for a while (this graph shows why). This lack of enthusiasm explains why DHHS issued the infamous "video news releases" that purported to contain reporting from Karen Ryan on the myriad ways in which the new plan would be the greatest thing for seniors since high-fiber sliced bread. Except it turns out that Karen Ryan is an actress, not a reporter, and the "video news releases" were not news at all, but rather commercials bought and paid for with your tax dollars.
So, given the history, this news should come as no surprise:
A new Medicare Web site that allows people to compare drug prices is already drawing complaints that the information is incorrect.How does this administration manage to mess up just about everything it touches? Ideally, researchers and policy professionals would come up with proposals likely to have benefits exceeding their costs. The administration could then choose to adopt those that are in line with, or at least not at odds with, its ideology. Then the policy would be administrated by the policy arm, not the political arm, of the Executive. The progression would be
The site (www.medicare.gov ) is designed to enable people using the new Medicare-approved drug discount card to search for the lowest drug prices.
"Everybody seems to be finding problems with inaccuracies with the posted prices," Walgreens' spokeswoman Laurie Meyer told the Associated Press.
- Proposal based on serious science.
- Accept/Reject based on political considerations.
- Implementation by apolitical professionals.
- Proposal based on political objective.
- Accept/Reject based on political considerations.
- Implementation by apolitical professionals.
- Proposal based on political objective.
- Accept/Reject based on political considerations.
- Implementation to achieve, or at least appear to achieve, political objectives.
Mark McClellan (yes, Scott's brother, but an accomplished and, so far, still credible, economist nonetheless) is taking over Tom Scully's (yes, the Scully who hid the true price tag of the Medicare Drug Plan from Congress) position as head of the Centers for Medicare and Medicaid Services (CMS). Brad DeLong wrote the other day that
No one, absolutely no one, is getting out of this administration with even the shreds of a reputation.If the political operation keeps their hands off of CMS under McClellan, McClellan could prove Brad wrong. But that's a huge if and I'm not particularly optimistic.
AB
Friday, April 30, 2004
Letter to Sinclair Broadcasting
From John McCain:
I write to strongly protest your decision to instruct Sinclair’s ABC affiliates to preempt this evening’s Nightline program. I find deeply offensive Sinclair’s objection to Nightline’s intention to broadcast the names and photographs of Americans who gave their lives in service to our country in Iraq.Viewers of ABC affiliates owned by Sinclair Broadcasting will not hear tonight's Fallen, which Nightline says "will pay tribute to all the American servicemen and women who have died in Iraq by devoting the entire broadcast to reading their names and showing their photographs."
I supported the President’s decision to go to war in Iraq, and remain a strong supporter of that decision. But every American has a responsibility to understand fully the terrible costs of war and the extraordinary sacrifices it requires of those brave men and women who volunteer to defend the rest of us; lest we ever forget or grow insensitive to how grave a decision it is for our government to order Americans into combat. It is a solemn responsibility of elected officials to accept responsibility for our decision and its consequences, and, with those who disseminate the news, to ensure that Americans are fully informed of those consequences.
The statment on Sinclair's web page says, "the action [Koppel's plan to read the names of the dead] appears to be motivated by a political agenda designed to undermine the efforts of the United States in Iraq." For some other things Sinclair Broadcasting stands for, see this overview from the Center for American Progress.
You may now rant about media consolidation.
AB
Postcard Update
The Easter edition of my column "Postcard from Old Europe" talked about the low level of entrepreneurship in Europe. The Blog "Small Business Trends" tackles the same question - I would highly recommend looking at the whole thing. An excerpt:
The entrepreneurs who are successful in the US are often considered as heroes. In Europe, most of them hide themselves because success is not something you can show to the same extent, because many people around them start to become jealous.
Postcards from Old Europe - Four elections and a constitution
While much of the world has it's eyes firmly fixed on the US election in the fall, this column looks at some of the developments coming up on the European political stage.
June will see elections to the European parliament and another chance at agreeing on an EU constitution. Some people seem to think now that Spain and Poland have dropped their opposition to the so-called double majority voting system the chances are pretty good for an agreement on the constitution. Keep in mind that agreement doesn't mean that the constitution is ratified - some countries will elect to hold referendums. The outcome of these referendums is far from certain so it would be very premature to expect the EU constitution to sail through the ratification process.
The most interesting countries with regard to possible referendums on the constitution are the Netherlands, the UK and France. The Netherlands - formerly one of the most ardent supporters of European integration - are suffering from a bout of Euro-skepticism and are going to hold their first referendum. The UK is a special situation in which the electorate and much of the mainstream press is against most things European while the government (well at least the prime minister) is mostly for closer European integration. France is a very interesting story in this regard as the President Chirac can decide if the country will hold a referendum or not. As any election can - and will - be used to express discontent with the ruling party, the Elysee will probably try to avoid a vote if it can. The tricky thing is that UK prime minister Tony Blair has since openly called for a referendum and thereby heightened the pressure on Chriac to do the same.
The French not only face a potential referendum on the constitution but also a general election in 2007. The recent regional elections - which led to Chirac's center-right party losing almost across the board seem to have dampened the governments reform-spirits. I doubt that the French government will attempt to cut entitlements or implement any kind of wide ranging health-care reforms before the next big elections. The only problem is that the Maastricht deficit criteria should - in theory at least - punish countries for running a budget deficit of more than 3% of GDP. As France is already above this limit it will probably have a hard time boosting government spending in a bid to enliven the economy. The smart money is on the government engaging in some creative book keeping to help "reduce" the deficit whilst at the same time borrowing and spending more.
Italy is scheduled to hold an election by mid-2006. The government of Silvio Berlusconi will probably play dead on the reform front until then and concentrate on heading off the impending challenge by the opposition. One should add that the Berlusconi government didn't actually manage to do much in the way of reforms anyway. This disappointed quite a few voters who took the prime minister's tough businessman persona at face-value and are now pretty disillusioned. The probable candidate, the outgoing EU Commission President Prodi is certainly no pushover.
The German situation is quite similar to the one in France. Most people will tell you that reforms are absolutely necessary - just as long as they won't have to give up any entitlement themselves. The government's disastrous performance in recent polls (and in regional elections) has lead to the reform caravan coming to a grinding halt. I guess the situation will have to get much worse before a broad national consensus to support reforms emerges.
The next election coming up will determine the composition of the EU parliament. Pollsters are predicting a (first time) center-right win. This could influence the makeup of the new European Commission as the old one is disintegrating as most of it's members have jumped ship (or are going to).
What does it all mean? Most incoming governments have pushed a reform agenda and have been badly mauled for doing so. The reform window is in the process of slamming shut and the European Constitution is still a ways off. This failure to implement structural reforms will raise Europe's Beta with regard to exports and will make any domestic recovery harder to come by. Not much good news for the old world.
Remember to visit Curryblog for more news and views!
Thursday, April 29, 2004
Something to Hide
Bush, after today's meeting with the 9/11 Commission:
"If we had something to hide we wouldn't have met with them in the first place. We answered all their question. I came away good about the session because I wanted them to know how I set strategy, how we run the White House, how we deal with threats" Bush said.This reasoning must explain -- straight from the President himself -- why the administration is fighting so hard to keep the Energy Commission records closed and still hasn't released all of Bush's military records, and [insert description of act of secrecy here] ...
I suppose Bush's inadvertent candor also sheds some light on why they resisted testifying for so long, and did so only without recordings or transcripts, why Dr. Rice initially wouldn't testify under oath, why the administration fought against extending the deadline for the Commission's report, and [insert act stonewalling the 9/11 Commission here] ...
AB
UPDATE: Over at Tapped, Matt Y. noticed the same quote that I did and fills in some of the blanks:
... in the real world of course, Bush did refuse to meet with the commission, only to back down in the face of public pressure. Then he refused to meet for more than one hour and, again, he wound up backing down in the face of public pressure. Finally, he agreed to let the commission ask their questions, but only on the dual condition that Cheney be at his side and that no transcript of the meeting be released. That doesn't sound at all like the pattern of behavior of a president who's trying to hide something. Why, it's been "unprecedented cooperation" from the get-go. And we all remember how eager Condoleezza Rice was to testify. . . .
Unimpressive GDP Numbers
From today’s BEA release of the advance estimates of first quarter GDP growth:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.2 percent in the first quarter of 2004, according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter [of 2003], real GDP increased 4.1 percent.This is a solid number, but nothing that will wow anyone -- and it's certainly not as impressive as a lot of people thought it would be. At first glance, one of the more surprising bits about it is the relatively fast rate of inflation included in the report: core inflation accelerated to a 2.3% annual rate, which strikes me as an unexpectedly large increase in inflation.
...The slight acceleration in real GDP growth in the first quarter primarily reflected a deceleration in imports, an upturn in government spending, and an acceleration in PCE that were largely offset by decelerations in exports, in inventory investment, and in residential fixed investment.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.2 percent in the first quarter, compared with an increase of 1.3 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 2.3 percent in the first quarter, compared with an increase of 1.5 percent in the fourth.
More on this report later.
Kash
The Testimony Will Not be Televised
Nor recorded. Nor transcribed. But Bush and Cheney are meeting with the 9/11 Commission today. I think The Onion has the right take on this:
Cheney Wows Sept. 11 Commission
By Drinking Glass Of Water
While Bush Speaks
AB
Wednesday, April 28, 2004
What’s Causing High Gasoline Prices?
The US Senate Republican Policy Committee has spent some time and effort investigating the cause of rising gasoline prices. Yesterday they published a policy report explaining their findings. The conclusion: rising gasoline prices are largely due to Federal regulations, such as those established by the Clean Air Act. Among their recommendations of things that will help bring down the price of gasoline:
- “The EPA should have the authority to temporarily suspend clean-fuel requirements…”
- “Congress should eliminate the Clean Air Act’s oxygenate requirement for reformulated gasoline…”
- “Congress and the Administration should reform other regulations (known as the New Source Review requirement) under the Clean Air Act that have resulted in the halt of construction of new refinery capacity.”
Actually, let me propose an alternate hypothesis: gas prices have been rising because crude oil prices have been rising. It sounds crazy, I know. Why do I propose such a theory? In part it’s because of graphs like this one, showing crude oil and wholesale gasoline prices since January 2, 1990:
Source: data from the Energy Information Administration, US Dept. of Energy.
I think that I can detect a relationship between gasoline prices and the price of crude oil that would pretty much explain why gas prices are currently so high. But apparently the Senate Republican Policy Committee doesn’t see it that way, and would rather use high gas prices as an excuse to change the Clean Air Act. I guess the only bit about it that surprises me is that they didn’t also find a way to suggest that another tax cut would be the cure for high gas prices.
Kash