Tuesday, September 4, 2012

13:21, 9/4/12

A quiet day to open the DNC convention.


The Danger In Exempting Wireless From Net Neutrality

Posted by samzenpus
from the share-the-air dept.
nmpost writes "Nearly two years ago, the FCC outlined its rules for net neutrality. Notably absent were rules for wireless networks. There are several legitimate reasons that the same rules applied to wired networks can not apply to wireless networks. However, the same danger lies in leaving wireless networks unguarded against the whims of its administrators. As we move more and more towards a wireless dominated internet, those dangers will become more pronounced. We are going to need a massive investment in infrastructure in this country regardless of net neutrality rules. Demand for wireless is going to continue to grow for many years to come, and providers are not going to be able to let up. Data caps and throttling are understandable now as demand is far outpacing infrastructure growth. Eventually, demand will slow, and these practices will have to be addressed. This is where allowing internet providers to regulate themselves becomes an issue. Self regulation usually does not end well for the consumer. Imagine allowing power plants and oil refineries to determine what chemicals they could pour into the air. Would they have the population's best interest at heart when making that determination? In the future when the infrastructure can match the demand, what will stop internet providers from picking winners and losers over their wireless networks? As conglomerates like Comcast gobble up content providers like NBC, a conflict of interest begins to emerge. There would be nothing from stopping one of the big wireless providers like AT&T or Verizon from scooping up a content provider and prioritizing its data speed over the network."


Ian Welsh is a Canadian.  He looks at other media.

Some basics on the economy

2012 September 3
by Ian Welsh
1) the majority of new jobs are bad.
2) the economy has still not recovered all lost jobs, either in absolute #s or as a percentage of the population
3) so there are fewer jobs, and what new jobs have been created are worse. They pay worse.
4) The upper middle class job market has recovered, which is why those folks are no longer panicking and are telling you that the economy isn’t so bad as all that.
5) the failure to force the rich to take their losses and to break up the banks means that the same people who caused the 2007/8 financial crisis still control the economy and the government.
6) failure to restructure the economy to get off oil and over to an electrical economy means that the US (and the world) are caught in the oil price dilemna: any real recovery increases oil price and will be derailed by those high oil prices.
7) Europe, ex. Germany, is in recession.
8 ) the developed world is in depression, it never left depression.  During depressions there are recoveries (such as they are) and recessions, but the overall economy is in depression.
9) China’s economy is slowing down.  Since China is the main engine of the world economy, followed by the US, this is really bad.  If it goes into an actual recession, bend over and kiss your butt goodbye.
10) Austerity is a means by which the rich can buy up assets which are not normally on the market for cheap.
11) the wealth of the rich and major corporations has recovered and in many countries exceeded its prior highs.  They are doing fine. Austerity is not hurting them. They control your politicians.  The depression will not end until it is in their interest for it to do so, or their wealth and power is broken.
12) The US play is as follows: frack. Frack some more.  Frack even more.  They are trying the Reagan play, temporize while new supplies of hydrocarbons come on line.  Their bet is that they’ll get another boom out of that.  If they’re right, it’ll be a lousy boom.  If they’re wrong (and the Saudis think they are, and the Saudis have been eating their lunch since 2001) then you won’t even get that.  Either way, though, they’ll devastate the environment, by which I mean the water you drink and grow crops with.
13) For people earning less than about 80K, the economy never really recovered.
14) If you’re out of work more than 2 months your odds of getting another job drop through the floor.  If you do get one, odds are it will pay much less than your previous job.
15) Canada is undergoing austerity madness at all levels of government, and the corporations, with historically low tax rates, are not going to spend either. With Chinese demand for commodities dropping, expect a nasty recession.
16) Australia, having tied itself completely to China is about to reap the downside of that decision.
17) Wages are being systematically broken in the developed world.  The rich do not believe they need you, except as wage-slave labor.  You will all be company store slaves, paying rental streams to everyone to be allowed to continued to eke out a miserable existence.
18) Since the US sells protected works (so called “intellectual property”) you will continue to see a massive attempt to break anyone who doesn’t pay IP rent to the US.  Some countries (Sweden, Germany, among others) are going along.  But there are signs of rebellion.  Apple may have won against Samsung in their ridiculous attempt to enforce patents on obvious solutions, but both Japanese and Korean courts threw the cases out.  Paying rent to America, the hegemon, when the world system is working is one thing, paying rent when the world isn’t working is another.
19) Stirling Newberry says, and I agree, that none of this is stable, but it will last as long as the majority of the baby boom, the silents and a good chunk of the Xers still think they can hang on to their little piece of the pie, and screw everyone else.  It will most likely break down in 2020/24, which is when the demographics turn.  Young people today are completely screwed, they have astronomical student loans, no or shitty jobs, can’t afford a house and can’t afford to start a family.  Note that the places where revolutions, peaceful or otherwise, are happening, are places where the majority of the population is young.  Latin America, the Middle East.
Addendum
20) The economic numbers you hear don’t mean squat. Headline inflation does not matter, ask yourself instead “what are my fixed expenses?”  Start with food.  Jobless claims #s cannot be compared to prior numbers because less people have the sorts of jobs that let you make those claims.  For the #s to make sense you’d have to adjust them for the reduced # of jobs which allow claims.  The unemployment rate has dropped even though there are, in absolute terms, less jobs, because people have given up looking.
21) The money the Fed floods into the financial markets (quantitative easing, among others) is mostly NOT getting to ordinary people, and whatever Bernanke and his apologists say, it was never intended to.  It is intended to prop up financial actors, and keep the rich richer.  It has done what it is supposed to do."

I am not rich.  I do read the mail.

http://www.theregister.co.uk/

http://www.reghardware.com/2012/09/03/pcs_turn_touchscreen_ahead_of_windows_8/

Where laptops are now.

http://kurteichenwald.com/2012/09/the-five-reasons-why-romneyryan-must-be-defeated-in-2012-and-why-conservatives-should-hope-they-are/


The Five Reasons Why Romney/Ryan Must be Defeated in 2012 – And Why Conservatives Should Hope They Are.

The GOP must be stopped in 2012. The future of America’s ideals of democracy – and of the Republican Party itself – could well be at stake.
Contrary to how it might seem, I am not a partisan bomb thrower. Throughout most of my adulthood, I have been just as likely to vote for a Republican as for a Democrat – in local, state and national contests. I have cast my ballot in presidential races for both Republicans and Democrats. But in the last four years, the GOP has transmogrified into something ugly and vicious and, more important, something wedded to the politics of fantasy and ignorance. It has rushed so far from its moorings that I cannot conceive of voting for members of this party until, hopefully, they pull themselves back from the precipice of self-destruction, paranoia and delusion.
Today, for Republicans, up is down and front is back. Lying has become so ingrained into the conservatives’ national dialogue that they are now dangerously demagogic or, worse, severely unhinged. Blind rage at the election of Barack Obama has wrecked a once great political party. Its leaders have made so many deals with the devil in their almost pathological obsession with unseating Obama that they have pushed the GOP into its own version of political hell – unable to speak truths to their now-rabid and conspiracy-addled base and unable to right the party back onto a path of responsibility.
Only through the disinfectant of defeat can the Republicans, and the two party system, be preserved. And so, the campaign of Mitt Romney and Paul Ryan must be consigned to the ash heap of history. Defeat must not only be decisive, it must be crippling. Here are five reasons why:
I. They are liars. Most of the major newspapers and networks have adopted Marquess of Queensbury rules when addressing the utterance of utter falsehoods by Romney, Ryan and their surrogates. A velvet glove doesn’t deter deliberate deceit, and it certainly hasn’t here. Calling the words of Romney and Ryan “at odds with the truth” and “not factually accurate” is the coward’s way of communicating that the entire GOP campaign is based on lies, innuendo and more lies. There is a dramatic difference between the usual nip-and-tucking of the presidential campaign season and the flood of prevarication pouring out of the mouths of Romney and Ryan. To name just a few:
a. Obama and welfare. In a not-so-subtle dog whistle to the racists of the GOP, Romney and Ryan have repeatedly stated that Obama has tried to remove the “workfare” requirement of welfare. This, one of the campaign aides has said, has proven to be Romney’s most effective campaign ad. The fact that it is a complete lie seemed irrelevant: All Obama has done is accepted appeals from governors to allow them to try out some workfare ideas more suited to their local situations, rather than be obligated to follow the federal cookie-cutter rules. Fine, Obama said, so long as the number of welfare recipients going to work stays at least the same. There is no removal of the requirement, just an acceptance of the usual GOP philosophy that states should be allowed to act in their own interest. The question for Romney: Would he rescind the waivers, and force states to follow the federal dictates rather than allowing them to come up with their own means of reaching the same results? Don’t bother wondering about the answer. He would just lie. And don’t think that other Republicans will avoid joining in on this racist strategy: three weeks ago, Newt Gingrich (who once called Romney a liar) pronounced that there was “no proof” to back up the welfare claim; at the convention, the same Gingrich climbed the podium to attack Obama for “gutting” the workfare requirement. Guess he finally read the memo from the Romney campaign that truth is not a factor in this election.
b. Obama robbed Medicare of more than $700 billion. This is one of those lies that works because explaining the truth is complicated. The obvious implication – and in fact, the frequent statement by the GOPers – is that Obama took money from seniors to pay for Obamacare, and in the process put Medicare at risk. It. Is. A. Lie. As has been stressed again and again – without effect on the liars – there is no benefit cut for any beneficiary. The $700 billion is not a cut – it is the value of savings. By the GOP argument, people who buy shoes on sale are cutting back on their shoe purchases – they aren’t, they’re just using their money wisely. So is Obama: the money comes from providers who are accepting the decrease because the payments will be offset by the influx of new patients that will come from Obamacare. Other savings come from eliminating overpayments to Medicare Advantage. Then more will come from raising Medicare taxes on the wealthy. This not only doesn’t hurt Medicare, it extends the lifetime of the program. “The Affordable Care Act doesn’t steal anything from Medicare,” Henry Aaron, a health-care expert at the Brookings Institution, told Business Week. “It actually improves Medicare’s finances. No matter how you slice it, the Affordable Care Act strengthens medical hospital insurance.” Check out the Businessweek article for the full run-down on the Medicare lie.
c. The GM factory closing in Janesville, Wisconsin. Ryan has made big waves about the plant closing, laying it on Obama’s doorstep. And there is no possibility that Ryan doesn’t know he’s lying. Obama became president in January 2009. On October 23, 2008 – in other words, before the election — Paul Ryan sent out a press release bemoaning the fact that GM had decided to accelerate the pace of the closing of the plant. Right now, Ryan’s local newspaper is selling an iconic image: factory workers gathered at the plant assembly line standing behind a sign that reads, “Last Vehicle Off the Janesville Assembly Line…December 23, 2008.” For those who think Ryan is a truth teller, here is where you can order the picture. Oh, and by the way, don’t think this is a mistake on Ryan’s part. The fact that this statement is a lie has been pointed out every time he has said it. Didn’t stop him from burping out the same falsehood in his nomination acceptance speech. And more important – when did Republicans begin to think that the government is supposed to decide what plants an auto company should keep open.
d. “You didn’t build that.” Stop and think for a moment – not based on partisan lunacy, but just on logic. Any presidential contender stands up and tells business people that they didn’t build their own businesses? It takes an enormous level of self-delusion and irrationality to believe that someone is that stupid. And, of course, the truth is that Obama said no such thing. The statement came in the course of a litany about how everyone has others to thank for their successes – he cited, for example, a teacher or a coach. In the sentence leading up to “businesses” he referred to the roads and bridges that are necessary for business to function and, yes, the businesses did not build that. Now, if Obama had said “those” instead of “that,” the ability of the GOP to lie about what he said would have been minimized. But it speaks to the shallow dishonesty of the modern GOP to know that an entire evening of its convention was built on exploiting a finding a grammatical loophole to drive their truck through.
e. “Obama wants to prevent the military from voting.” This has to do with the attempts by the Ohio GOP to impede voting by blocks that tend to case their ballots for the Democrats. A rule was adopted by which limits were placed on the ability of locals to vote, cutting into the time where there is the highest turnout of minority voters. However, an exception was made for members of the military. This was challenged by the Obama administration, not to stop members of the military from voting, but to allow everyone else to have the same rights. Rather than admitting they were trying to favor one block of voters over the other, the GOP turned reality on its head. And P.S. – the courts agree that Obama is right.
f. Obama is on a spending spree. Never happened. I could lecture on this for a while, but instead let’s turn to the words of that bastion of liberal thought, the Wall Street Journal through its Marketwatch site. A 2012 article entitled “Obama spending binge never happened,” reports that “federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s. Even hapless Herbert Hoover managed to increase spending more than Obama has.” But that doesn’t stop Romney from moaning that Obama has created a “debt and spending inferno.” Read the whole article – it points out that there was a huge growth in spending in Obama’s first year, but that was meaningless; 2009 was the year of the last budget of the Bush Administration. (For more on the debt lies, see the section below on economics)
g. The stimulus failed. This is not only a lie, it makes no sense. If any country spends $700 billion on infrastructure and other projects, employment will go up. Three million people got jobs from the stimulus; Wall Street firms say, without hesitation, that it worked. I’m not sure how anyone could think it wouldn’t. Some may disagree whether it was the right thing to do (although, for a variety of reasons I will explain below, it was) but to claim it failed is simply wishes replacing reality.
h. Obama raised taxes. Hard to address this, since it has no basis in reality. Obama proposed and signed the largest middle class income tax cut in history. Tax rates for the wealthy are the same. There’s nothing else that can be said about this lie.
i. “If we keep talking about the economy, we’re going to lose.” This one deserves special recognition. Romney’s first major ad featured a clip of Obama making this statement. Sounds pretty devastating, right? Except this was a clip from the 2008 campaign, and Obama was quoting his Republican opponent. The full quote is: “Senator McCain’s campaign actually said, and I quote, if we keep talking about the economy, we’re going to lose.’’’ When this was pointed out to the Romney campaign, they not only dismissed the fact that they were lying, one of the aides said they were going to keep doing this kind of thing because Obama had to be held to account for the words he spoke – as if words and meaning were two different things. “You didn’t build that” is just a continuation of that cynical, un-American philosophy of Mitt Romney.
I could keep going with this for a long, long time, but these are the high points. It makes quite clear why a recent headline on the Fox News website is so humorous, “After the convention: What lies ahead for Romney, Ryan?” Fox didn’t mean it the way I am interpreting it, but there are only two answers. The way Fox meant it, the correct answer is “lies.” The way I interpret it, the correct answer is “outrageous ones.”

II.  They are demagogues. What is it about the state of Wisconsin? First it brought us Joe McCarthy, now it brings us Paul Ryan – two men willing to say anything, tell any lie, appeal to any fear, if it means advancing their political careers. The willingness to lie is bad enough, but when it is used to play on people’s ignorance and passions, a politician has crossed the line from dishonest to dangerous. The distant drums of demagoguery are growing ever closer. They began with Sarah Palin’s mantra about “real Americans.” They started their inexorable approach when GOPers bowed down to the conspiracy theorists in their own party – the same people who considered fluoridation of water to be a communist plot – with winks and nods that maybe Obama wasn’t an American citizen. Forget the fact that, as the son of a parent who is a citizen, he is a citizen. They allowed this fear to spread without ever calling bullshit. “I accept the President at his word” was considered a strong response, instead of “Don’t be ridiculous.” (Imagine how outraged – rightfully – the GOP would have been if the Dems had reacted to the loons in their midst who said Bush orchestrated 9/11 by saying that they took the president at his word that he didn’t arrange the attack.)  We have had the birth certificate since 2008, the Hawaiian State Health Department says its real, and no one has ever come up with a reason why this question is even being asked in the first place.” But the rabid mobs liked the idea of the black man as foreigner, and so it continues. Add in the other mantras – Obama hates America, Obama wants to give your money to minorities, Obama wants to let gays destroy the sanctity of marriage – and the GOP has successfully created the “other,” the internal enemy that threatens to undermine the country. First it was the communists, then the fundamentalists, and now Obama. (In fact, since I started with McCarthy, look at history: Truman, large swaths of the GOP intoned, was a Communist, deemed the central enemy of America. Now that conservatives see the new enemy as Islam, Obama, large swaths of the GOP intones, is a Muslim.)  The modern GOP has used lies to appeal to irrationality and a lack of knowledge – I have had Republicans tell me that they are scared for their parents because Obama is going to euthanize them, that Obama is planning to plant tracking chips in all Americans after the election, that a civil war is coming, that Obama had advanced warning of 9/11,  and on and on. This is a form of mass delusion that can only end badly, if allowed to fester or be validated in any way. GOP leaders have stoked this furnace of hate, and in the process have both trapped themselves with a new base of voters divorced from reality and allowed for the empowerment of the reckless and dangerous people who used to be at the fringes of the Republican party. Demagogues depend on hate and fear; once they are unleashed, though, those emotional forces are hard to put back in the bottle.

III. They are economic arsonists. As someone who has spent much of my career reporting on business, finance and other money matters, I have had a lot of trouble in recent years figuring out if the GOP really is as ignorant of basic economics as their words make them out to be, or if they are intentionally willing to upend the American economy for their own interests. I’ve come to believe that it is a little bit of both – that they are so blinded by philosophical fidelity that facts and knowledge are just pushed aside. It is either intentional, or willful blindness. The evidence is overwhelming:
a. The glory of tax cuts: Should taxes be cut? Of course. Should taxes be raised? Of course. Should interest rates be raised or lowered? Of course. And I am not contradicting myself. Each of these answers is correct depending on the economic circumstances at the time. Now, this topic is both so important and so involved that I need to break it down into pieces:
1. The Reagan tax cut mythology, part 1: Reagan’s tax cuts did not trigger an economic boom. In 1981, Reagan was correct that taxes needed to be cut; the American economy was facing an unprecedented beast called “stagflation” – inflation (normally associated with a runaway economy) and high unemployment (normally associated with low inflation.) The Federal Reserve, under chairman Paul Volker, needed to squelch inflation with a huge increase in interest rates, and did so (to see the horrors of this interest rate path, take a look at the historic rates for 20 year an 1 year Treasury bonds. One month before Reagan took office, the Prime Rate hit is all-time high of 21.5 percent. With the cost of money at the highest rates in history, economic activity had slowed to a near crawl. Outside of monetary policy, the other lever available to the government was fiscal; attempting to get more money in the hands of Americans — any Americans – was important to prevent the economy from falling off a cliff. Now, in the fantasy retelling of the Reagan years blathered out by modern Republicans with no knowledge or concern about economic history, the Reagan tax cuts passed in 1981, and the economy transformed into paradise. But that story is fiction. Instead, the tax cuts of 1981 went through – with carnival barkers like Arthur Laffer proclaiming that economic growth would rush in before the ink on the law was dry – and then precisely nothing happened. By 1982, the economy was in such bad shape that the GOP talking point was not “Reagan the magnificent,” it was the plea (a principled one) that Americans should “stay the course,’’ despite the fact that there had been no evidence of growth. In fact, the economy had grown significantly worse – beginning the first full quarter Reagan was in office through the 1982 election, the growth in Gross Domestic Product was negative 8.9 percent. (By way of comparison, for the comparable period in Obama’s term, GDP growth was positive 15 percent.) A few months after the 1982 election – in February 1983 – the Fed had finally cut the Prime Rate below 11 percent, less than half of what it was when Reagan took office. (PS – presidents don’t have any role in raising and lowering interest rates.) And, surprise! Economic growth returned. With the cost of money significantly cheaper, corporations and consumers unleashed a flurry of economic activity – by the end of the first half of 1983, GDP growth had reached positive 5.1 percent. By the 1984 elections. GDP had grown by just under 34 percent since January 1983.  Now, did tax cuts help? Sure – they lessened the damaging impact of high interest rates and, when the economy turned around, they helped increase the amount of cash available for economic activity. But if interest rates hadn’t have fallen? Reagan would have been a one-term president and shuffled offstage by the GOP forever.
2. The Reagan tax cut mythology, part 2: One of the most revealing moments in the entire modern tax-cut debate occurred during Leslie Stahl’s interview of Eric Cantor, the House Majority Leader, on 60 Minutes. Actually, revealing isn’t the right word – terrifying is. Here was a man whose knowledge was critical in how this country would move forward, and he was woefully lacking. At one point, Stahl points out, despite Cantor’s protestations that Reagan never compromised, that Reagan in fact did raise taxes multiple times, with the biggest being in 1982 (before economic activity took off.) Cantor’s people were outraged by Stahl’s truthful recounting of history – outraged! ­– because it contradicted their Fairy Tales version of the Reagan years. “That just isn’t true,’’ one of Cantor’s aides yelled from off-camera, “And I don’t want to let that stand.” Cantor did nothing to correct his loudmouthed – and wrong – aide. In 1981, Reagan signed the Economic Recovery Tax Act – the tax cut law that GOPers slobber over to this day. The following year, in the bit of history excised from the Republican mind, Reagan signed the Tax Equity and Fiscal Responsibility Act (TEFRA). While Americans still received tax cuts when aggregated with the prior year’s law, TEFRA constituted the largest tax increase in American history at that time. Why did Reagan do it? Because he wasn’t, contrary to some GOP revisionists, a blind ideologue. After the adoption of the 1981 tax cuts, government analyses showed that the impact on four-year average impact on federal revenues would negative 2.89 percent of GDP. (Remember the whole supply side scam, that tax cuts pay for themselves? Well, they don’t.) After TEFRA, the four-year average was positive 0.98 percent. You see, it seems that when you increase tax, tax revenues go up. Funny, that. But, because the tax cuts were cumulative negative, deficits went up. The first time in American history when deficits exceeded $100 billion was in 1982. The deficits stayed above that number until 1998, during the Clinton Administration. The first surplus came in 1999. (For those who don’t remember economic history under Clinton, he raised taxes in 1993, and – surprise again – higher tax rates increased federal revenue and allowed the government to reduce the amount of publicly held debt outstanding. Funny, that.)
3. Reagan tax cut mythology part 3: At a meeting in the Oval Office, Obama commented on the fact that tax rates are lower now than they were under Reagan. After the meeting, Rep. Michelle Bachmann – one of the dangerous Republicans whose certainty to knowledge ratio might well be the first to exceed 100 percent – scoffed that Obama was fibbing. Of course, as the mantra goes, we have been pillories with higher taxes in the years after Reagan. But no – Obama was right. The total Average Federal Tax Rate for all income quintiles was between 21 and 22 percent in the Reagan years. When Obama took office, it was 17 percent. If the Democrats introduced the “Ronald Reagan Tax and Fairness Act” (I made the name up) calling for a return to the tax rates under Reagan, we would be talking about a 23 percent tax increase. Tax rates are at historic lows, which is why it is perfectly reasonable, in the face of massive federal debts, to raise them.
4. Laughing at the Laffer Curve: This has lasted for decades since Reagan, and I have touched on it above. But now let’s really delve into the most destructive mythology.  In my opinion, Arthur Laffer has done far more damage to the future of America than Osama bin Laden. Here’s why: Laffer came up with his little device called “the Laffer Curve” which stated that tax revenues increased and then decreased once you moved up the rate scale from 0 percent to 100 percent. While there are some technical arguments about why the last number actually isn’t correct, theoretically, Laffer is correct. So, by his logic, there is a point where cutting taxes increases federal revenues. For now, I’ll accept that as true. But there is one huge problem with that argument: the Laffer Curve has no numbers! In other words, assuming Laffer is right, there is a point somewhere on the scale where tax rates bring in the highest amount of government revenues. And where is that number? Nowhere close to where it is now. The empirical analyses conducted by people who are less polemical than Laffer have come up with 68 percent, 70 percent and 35 percent. Whichever number you choose, they are all higher than the current rate of taxation. You see, what Republicans ignore is that it is the Laffer Curve, not the Laffer rising vector. There is some point – even if you want to assume that Laffer is right – where tax cuts decrease the amount of federal revenue. Since 1981, there has been a direct correlation between tax cuts and increases in the deficit. In other words, empirically, the tax rate was below the peal of the Laffer curve before cuts even started. Supply siders will bitch and moan at those numbers, but they are fact, not fantasy. Deficits went up under Reagan, down under Clinton and up (dramatically) under W. To argue that tax cuts pay for themselves is about as logical as saying Jesus rode dinosaurs – it is a statement made to justify a desired outcome, and not something based on any truth.
5. The Lucky Duckies who Pay No Taxes. The Wall Street Journal once wrote an editorial bemoaning the luck of the impoverished, since they don’t pay federal income taxes. At first, I thought it was a joke, and now it is a GOP talking point. They decry the lack of fairness to rich people, who are paying so, so much when others are getting a free ride. And this, as you might imagine, is utter bull. Here’s why: the Americans who are in the top 20 percent of income earners pay about 70 percent of federal taxes – but guess what? They also pull in about 60 percent of total pre-tax income, according to the Congressional Budget Office. In other words, they pay more in absolute dollars in income taxes because they have more income. The argument is akin to complaining that people living in mansions pay the majority of a town’s real estate taxes, while people renting apartments pay nothing. It’s both illogical and knowingly misleading. The statistics cited by the GOP speaks to income disparity not tax fairness. Now, there are 46 percent of Americans who pay no federal income taxes. The reason: they don’t make enough money. The income for twenty three percent of Americans is so low that, once they apply the personal deduction (which is taken by all taxpayers), their tax obligation goes to zero. This group includes the poor, the elderly, students, etc. The only way to bring in more cash from them, if it was possible, would be to cut the personal exemption (which the GOP would never do, because that would affect everyone) or dramatically increase taxes on low-income Americans. The other 23 percent who don’t pay taxes have enough income to pay after the personal exemption, but qualify for tax breaks that bring their bill to zero. This is seen at every income level – in fact, because of this, 1,470 millionaires paid no taxes in 2009. GOPers still moan that everyone should pay taxes by picking and choosing what they want to call a tax. Federal income taxes, in their lexicon, are the only ones that exist, ignoring payroll, state and local taxes. When actual tax burden – rather than bits and pieces of tax burden – are assessed, the bottom 20 percent of income earners pay 17 percent of the total tax bite, versus an effective rate of 30 percent for top earners. And guess what? Those numbers result in all the share of total taxes paid roughly matching the share of total income for each of the income groups.
6. The “Job Creators”: Let’s do the two-second version of this. A millionaire gets a $340,000 tax cut. And this translates into a job how? Maybe he’ll hire another housekeeper, maybe buy some more from Tiffany’s, but the vast majority of that money will not be spent on goods that drive the economy – it will be put into savings. Usually, that can be a good thing, but in a stagnant economy, the people whose financial activity creates jobs are the middle class. Give a middle class family $10 during a rough economy, they spend it. And that is how an economy gets moving. What we need is more tax cuts for the middle class, not tax cuts for the wealthy. (And, again, you have to look at actual numbers. The Bush tax cuts went into place in 2002: employment remained fairly stagnant until the financial crisis of 2008, when unemployment skyrocketed. They cuts have remained in place throughout the Obama Administration; so if the tax cuts fuel hiring, where the hell are the jobs?
7. The GOP is the party of tax cuts: I was horrified by something I saw in Obama’s first State of the Union in 2010 (not the GOP congressman who yelled out “you lie!” which should have led to his being sanctioned by Congress.) Instead, it was a point in Obama’s speech when he mentioned that the stimulus had given the middle class the greatest tax cut in history. It’s true – it did. This was not something I figured would be controversial. The Democrats jumped out of their seats and applauded. The Republicans did nothing – no applause, nothing. That was the moment that really put me on a path of contempt for a party I had once supported: they didn’t care about tax cuts, only about tax cuts for the rich. I had long considered that something of a canard, but from what I witnessed, I no longer had any doubt that Republican economic philosophy had nothing to do with economics (which was why so much of it was illogical) but instead was about one thing: their constituents wanted money. That’s it. The Laffer Curve, the fictionalization of the Reagan years, job creators, lucky duckies – all of that was no accident. It was a means of obfuscating the truth so that the middle class would sit by as the wealthy looted the federal treasury. And my realization was only reinforced in the years that followed: GOPers ranted and raved about the need for tax cuts for “job creators” but when the time came for a renewal of a payroll tax cut – which helped the middle class enormously but did almost nothing for the rich – the GOP fought it. When Obama proposed allowing the Bush tax cuts for the middle class to be renewed, the GOP refused, instead taking the proposal hostage in an attempt to force through tax cuts for the rich.
b. The debt. No matter how many times it’s said, the truth on this one struggles to become part of the American understanding. When George W. Bush assumed the presidency, the budget was in surplus and the projections showed that the government would be able to pay down much of its debt within the next six years. Then, came the Bush tax cuts. Beginning in 2002, the Federal government fell into deficit again – and hasn’t recovered since. The deficit is the annual contribution to the total debt owed by the federal government, and that number began climbing in 2002 in ways that are unprecedented in the history of the world. In 2002, the year that the first Bush budget was effective, the total outstanding debt of the United States was $6.2 trillion. It had barely budged in size from the previous year. By the end of the final Bush budget, the total outstanding debt had almost doubled, to $11.9 trillion. In the first two years of Obama budgets, the debt climbed to $13.6 trillion. But why? GOPers like to blame the stimulus – contrary to all available evidence. The stimulus did add an amount – extremely small as a percentage – in the short term. But Obama continued to have to work with the Bush tax cuts and the wars. The Bush tax cuts and the wars have been the single largest factor in the continued growth of the debt by far – both under Bush and under Obama. If the Bush tax cuts are allowed to expire at the end of this year, the Congressional Budget Office projects that future deficits will be cut in half. There is no way to accomplish that amount of cutback on the deficit by simply going after expenditures – particularly now that Romney and Ryan are pretending that they can kill Obamacare, leave Medicare untouched and increase military budgets. The numbers are simply impossible – there is no money there. Non-defense discretionary spending – areas like foreign aid, education and food safety that GOPers attack as being some huge driving force of deficits – account for only 15 percent of the budget. In other words everything the government does that isn’t military or Medicare only would provide $560 million if cut in its entirety. And the deficit would still be $800 billion – an unsustainable amount. Taxes must be increased if America is going to survive.
c. The debt ceiling “debate”: There has never been a more irresponsible and reckless act on the part of any political party than the financial crisis engendered by the GOP in 2011 in its refusal to raise the debt ceiling limit without a fight; the real possibility was raised that America would, for the first time since its founding, default on its debt obligations to the world. The debt ceiling is nothing more than the legal limit on borrowing allowed for the federal government. Both houses of Congress have to approve the limit and have done so repeatedly since 1917. Usually, raising the debt ceiling was a perfunctory matter – it had been done 74 times since 1962. Reagan raised the debt ceiling 18 times and Bush II raised them 7 times – tax cuts have to be paid for with borrowings, after all. Put another way, Reagan raised the debt limit every five months, Bush every 13 months, and Obama every 15 months. (Clinton was every 24 months.) So, without the possibility of contradiction, the presidents who needed the debt ceiling raised the most often were Reagan and Bush, and the Republicans burbled happily as they did it. Suddenly though, in the middle of a global financial trauma, those same GOPers decided that now raising the debt ceiling mattered. And, somehow, they portrayed this as being representative of out-of-control spending by the Democrats. (I showed why that was bogus up above.) There were a few other things that the Republican talking points hid from America – raising the debt ceiling wasn’t about allowing future spending, it was about paying past bills. In other words, the money had already been spent – demanding cuts in future budgets did nothing to affect the structural debt. Now, American debt has been considered the safest investment globally for decades. Whenever international financial markets are rocked, investors take a flight to safety by buying American debt. Treasury bonds are part of untold thousands of investment strategies, used as a means of diminishing the risk profile of a portfolio. All of this works solely because of international faith that America would never default on its debt. But once the economic illiterates known as the Tea Partiers came into office, their hopes, wishes and assertions became the other side of an economic debate about facts, figures and reality. Oh, investors wouldn’t care about America not paying its obligated interest on the debt, they intoned, as the actual investors who owned the debt squealed about the impact of such a delay being disastrous. The Tea Partiers seemed to believe that the holders of American debt were little old ladies in Idaho, picking out breadcrumbs from their tea cozies while waiting for the next check from the government. And that ain’t reality. The vast majority of American debt is held by sophisticated international investors who, as I said, use Treasuries as part of a complex portfolio of investments. If the cash doesn’t arrive as planned, the investment strategy dies. If people trading Treasury bills know that there is a default, the value of those Treasuries would crash through the floor. The debate – which in truth was over nothing real  – put at risk the global financial recovery, simply so the GOPers could score a few points and work to appease the economic idiots they had helped usher into government. That’s why, in the middle of this pointless debate, S&P downgraded American debt from the first time in history – something that Romney and Ryan blame on Obama, which is, of course, a lie. The real reason? That the debt ceiling had been turned into a political football. S&P wrote:
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Moreover, the country’s rating had been damaged because of the GOP’s apparent insistence to keep the Bush tax cuts in place. S&P wrote:
Our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.
If Americans understood what had really happened in the debt ceiling debacle, and the possible horrific damage it could have inflicted on the country, they would – hopefully – run these people out of Washington and instead replace them with either Republicans more interested in governing than in rage or, if they can’t be found anymore, with Democrats.

IV. They are threatening American democracy. In 2008, when Norm Coleman was said to have won the Senate election by 215 votes, Sean Hannity of Fox News slammed the Democratic nominee, Al Franken, for pursuing a recount. Never mind that the recount was required by law; Coleman, Hannity intoned, had won fair and square. That set in motion the conservative meme – Coleman won, and Franken was trying to steal the election. Franken was slammed as a crybaby who should now to the wishes of the electorate, concede and stop wasting the state’s money. Then, whoops – the recount showed that Franken had won by 312 votes and the conservative storyline changed dramatically. Fraud! The Wall Street Journal said it, Hannity said it, Rush Limbaugh and even Coleman. It was, one Republican commentator (I think it was David Frum) said a symptom of the party: When they won it was the choice of the people, when they lost, it was fraud. Put simply, the GOP had trouble accepting when it loses.
That arrogance underscores the vast willingness of the modern GOP to cripple American democracy. The crusade against “voting fraud” has its base in the utter disbelief on the part of the Republicans that they can lose any elections. Never mind that there is no evidence that any fraud of any importance takes place in elections. This, they intoned, required emergency actions to insure that elections were protected.
And so, the assault began. The boogeyman-ization of Acorn – the organization that served to register voters among the poor – was just stage one. With a political campaign that was as breathless as it was absurd, Republicans portrayed Acorn as this vast conspiracy to create legions of fake voters with names like Mickey Mouse. Never mind that registration is not voting, never mind that no one had ever been found who voted fraudulently as a result of an Acorn registration. This, the Republicans intoned, was a threat that had to be destroyed. And they succeeded – Acorn became the symbol for voter fraud, even though none had been committed, and the organization was put to death. Registration of the poor was hobbled.
In case anyone tried to pick up the slack, people stepped in like the governor of Florida Rick Scott – a man whom I met when he was running the criminal corporation Columbia/HCA and who is not only the creepiest person I have ever encountered, but one whose dishonesty is only exceeded by his egomania. Scott imposed rules on anyone who tried to register people to vote that were so stringent and punitive that organizations like the League of Women Voter’s announced that they could not risk registering voters in the state. (Thankfully, a Federal court has shut down the scheme for now.)
But that was just the beginning. In one Republican-controlled state after another, new rules were put in place to deal with the voting fraud “emergency.” That no Republican could cite a single instance of fraud in their state tied to an individual misrepresenting their identity was irrelevant – voter ID’s suddenly required. The fact that millions of the elderly, the handicapped, minorities and students did not have the kind of ID now being demanded was not deemed as important. Somehow stopping the nonexistent fraudulent voters was worth disenfranchising more Americans than have been blocked from voting since the 1960s. And it is no coincidence that the people being blocked are all major Democratic blocks. As one Republican official in Pennsylvania put it, they had adopted Voter ID, and now Mitt Romney could win the state. Words that would make any banana republic dictator smile.
Conservatives fear the same democracy that they praise. They want everyone to vote – so long as it is people like them. If they retain control in state houses, next time around, the person who won’t be able to vote might be you.
Fortunately, American democracy has some checks and balances. Voter ID laws in Texas were thrown out because, the court rules, they were adopted with the intent of discriminating against minorities. The attempt to impose unequal early voting in Ohio – as well as cut directly into the periods where minorities vote in the heaviest numbers – was struck down by a court. And the dominoes just keep falling.
One thing to know, though. I am not issuing an argument against using voter ID – even if the problem is bogus, Americans have been led to believe that it is real. The problem isn’t identification, it is the requirement for identification that particular classes of voters are either unlikely to have or who would find them difficult to obtain. Virginia has a voter ID law, but it is not designed to keep people away from the polls. The forms of ID that are accepted, as well as a rule that allows for voting by mail with the ballots sent to individual registered voters – have the same effect in preventing “fraud.” They just don’t stop people from voting. You will be able to judge the intent of states going forward that adopt voter ID laws if they follow the Virginia model of inclusion, or the Texas model of exclusion.

V. They are threatening America. What if they won? What if Romney, Ryan and the other amoral executioners of this strategy of deceit succeeded in slithering their way into the White House through a pack of lies and demonization? The United States is more important than what person is in office at any particular moment; what matters is not the victor, but the process. And the GOP has taken to doing everything it can to undermine the process. They are exhibiting their utter contempt for American citizens by piling lie upon lie, hoping to deceive people into believing in a fictitious country that allows for the GOP to retain control. They are utilizing the obscene Citizens United case to undermine the very nature of democracy by allowing anonymous millionaires to broadcast as many lies as they can in order to fool the electorate for whom they have so much disdain. Lying, impeding voting, buying elections – all of this is un-American and reflects a party that no longer has anything to offer other than fear. If it works, god help us…our country will become a nation of liars whose only concern will be how much air time they could purchase to insure the lies penetrate the American consciousness.
Now, as I said, I have been just as likely to vote for Republicans in the past as I have been for Democrats, and just because I am focusing on the GOP doesn’t mean I couldn’t write a piece criticizing some of Obama’s policies. But that is the difference – my critique of Obama would be based on policy. I would be starting with an understanding that we begin with the same fact base, and that facts would be what drove the discussion. I would not be compelled to address fictions, lies and delusions before addressing policy differences. That is the sign of a party that wants to govern, even if I don’t always agree with the ways they want to exercise their governing authority.
On the other hand, the GOP has become a childish, self-centered party that is unfit to govern. You don’t need to look any further than in their immature refusal to call the Democratic Party by its real name – instead, they insist on the Democrat Party, the same way that the bully in some 1980s movie would call a character “slob” if his real name was “Bob.” What is the purpose of this? I don’t know. It demeans every Republican candidate when they say it. But it also is of a piece with the Republican inability to engage an elected president from the Democratic party. Republicans didn’t just go after Clinton’s policies – they called him a murderer, a drug dealer, a rapist. They didn’t just go after John Kerry’s policies – they accused him of faking his heroics, of lying his way to a Purple Heart and a Silver Star (in the process raising doubts about the integrity of those awards for every soldier who has won them), and of shooting a boy in the back. They don’t just go after Obama’s policies – they accuse him of being a Kenyan, a socialist, a communist, a euthanizer, and on and on.
Until the Republican party grows up, until they stop lying about economic realities, until they can finally start to behave like they believe in their ideas rather than just demonizing their opponents, then the party is at risk of becoming a minority party forever. Rage, delusions and lies are not the path to power.
I hope."



.

23:40, 9/3/12

Labor day.   An American holiday still.

I often wonder how the faith in classical economics became so firmly established.
We know that it is the tool used by Marx. It per-exists socialism and so cannot be socialist.  Keynes' General theory was not written until after 1918.  It is seen as an attack on orthodoxy.  It is now treated as inherently foolish and evil.
It had forty years of stellar success, far more than any other system.
Success is not enough of a test for political acceptance. 

 Europe is paused as disruptive forces build.  They are at impasse. 
The only escape is default and default will destroy the powers that are.
There will be no non  catastrophic exit from the crisis.



Michael Powell  is a primitive.  This piece needs an editor and a rewrite.

A Redoubt of Learning Holds Firm

Anne-Katrin Purkiss/Royal Society
Sir Paul Nurse, the Nobel-winning geneticist currently at the helm of the Royal Society and his forebears, Isaac Newton, left, and Robert Boyle. More Photos »
LONDON — To stroll out of Carlton Gardens into the elegant confines of the Royal Society is to find a trove of centuries-old wonders, from Sir Isaac Newton’s reflecting telescope to the first electric machine to fantastical illustrated catalogs of fish and birds. Then you enter the sunlight-suffused office of the society’s president, Sir Paul Nurse. With his spiky mass of white hair, broad nose, ready smile and thick work boots, he looks the part of old-fashioned knight of science ready to tramp through the fens. But this Nobel Prize winner in medicine offers a very 21st-century lament.
“Policy debate these days involves trying to rubbish the science, and that is dangerous,” Dr. Nurse says. “Global warming denialists, those who oppose genetically modified crops and vaccinations, or the teaching of evolution: their trick is treat scientific argument as if it’s a political argument, and cherry-pick data.”
Dr. Nurse feels this danger more passionately than most, for the society he presides over was the crucible of the scientific revolution that formed the modern world. The society conducts studies, consults on government panels and has 1,450 fellows, about 80 of them Nobel winners. Yet theirs is, at times, an embattled world.
Founded in 1660, the Royal Society is the world’s oldest continuous scientific society. Newton, Christopher Wren, Robert Boyle and many more came together in a spirit of revolutionary if at times eccentric inquiry. Magic and alchemy greatly fascinated the society’s founders.
King Charles II granted the society a royal charter in 1662, and for centuries it hitched a ride on the back of Britain’s imperial ambitions. Explorers, scientific-minded military officers and colonial officials, and merchants — not just British — collected specimens, mapped unknown lands and recorded observations in every corner of the globe. And they shipped all of this, with accompanying essays, to the Royal Society.
The society no longer occupies that globe-dominating perch. The United States casts a much longer shadow, with billions of dollars spent on research and industrial might; American scientists dominate many disciplines. And other nations, not least China, are gaining.
But the Royal Society’s journals, particularly The Philosophical Transactions and The Proceedings of the Royal Society, remain vibrant. And British scientists often achieve a written elegance and synthesis of argument that sometimes outstrips their American counterparts.
Ask the chemist Martyn Poliakoff, the society’s foreign secretary, if it and British scientists in general are still relevant, and he gives a tight welterweight’s smile. “You conflate quantity and quality,” he says. “We punch above our weight class.”
The society’s leaders take pains to emphasize that they are not trapped in the amber of old accomplishment. The British government pays for much of the society’s work, and its leaders join the robust debates of the day, on matters like global warming and genetically modified crops, which they view as a sensible answer to global scarcity.
A 2010 report from the society urged the government to invest in science, education and innovation to fuel economic development. It generated much press. But the global economic downturn thrust a dagger to the heart of its most ambitious proposals.
Of late, too, conservative critics have attached themselves like barnacles to the society’s hull. The Global Warming Policy Foundation treated the society as a nest of alarmists in a recent report, “Nullius in Verba: The Royal Society and Climate Change.” (The Latin expression is the society’s motto; it translates roughly as “Take nobody’s word for it.”) James Delingpole, the waggishly influential conservative blogger for The Telegraph, lampoons Dr. Nurse as “easily my favorite Nobel Prize winner after Yasir Arafat, Al Gore and Barack Obama.”It’s fair to say his mortar shots have not rattled the windows of the Royal Society. Dr. Nurse hiked his eyebrows and shrugged: “We can’t sit by without exposing bunkum.”
Yet doubt of a more genteel sort lingers even among members. A current society fellow, an evolutionary biologist of fine repute who asked not to be quoted by name, says he greatly enjoys the conversation at the society’s dinners (he fortifies himself for the rounds of wine and port by drinking a quart of milk beforehand). But ask if the organization has much effect on the intellectual battles that roil his discipline, and he shakes his head.
“I can’t say that the society is a great presence in my field,” he says. “It’s a challenge: How do you muck your way through and remain relevant?”
At the beginning, the question facing society fellows was more elemental: How to challenge a worldview in place for thousands of years?
Mermaids Too
“And this is Sir Isaac.”
With that, the society’s librarian, Keith Moore, tall, thin with a great crown of silver hair, points to the shutter-eyed and formidable visage of Isaac Newton, an early president of the Royal Society. This is his death mask, fashioned from a cast of his face, sitting on a table in front of me. We will pass the next hour traipsing through the society archives, an expanse of four million books and journals and maps and weather charts, along with pieces collected by merchants in Azerbaijan, 18th-century traders plying the coast of Brazil and the Gobi desert of Mongolia, and fishermen bobbing in the swelling North Atlantic.
Mr. Moore rattles off the specimens and curios that constitute the society’s haul. Most are cataloged, a few lost. A whale skeleton, a mammoth tusk, a mermaid. He wants to go on, but I raise my hand.
A mermaid?
He shrugs. “How did the mermaid get on? Where is it today? Anyone’s guess.”
The society took root in the soil of revolution. More than half of its founding members favored the Parliamentary cause in the 17th-century civil war that cost Charles I his crown and then his head. During that intoxicating century, nearly everything holy, from royal rank to economics to science to the immortality of the soul, was challenged. In the early days of the Royal Society, knights and earls sat shoulder to shoulder with metalsmiths and merchants.
Though rationalists, these scientists viewed God as central to their universe and their work. As Edward Dolnick, author of “The Clockwork Universe,” an entertaining history of the early society, noted, the founders viewed the laws of nature and God as inseparable. They were mapping his universe.
The historian Christopher Hill termed this the “stop in the mind.” The scientists, philosophers and politicians of any era confront limits to their consciousness. How do you imagine a world, or even know what questions to ask, when you lack reference points?
And there is that question of magic. Society members lived in a time shadowed by apocalyptic dread, from plague to fire to war. They were fascinated by alchemy, unicorns’ horns and magic salves, and they often experimented on themselves.
“They researched these phenomena a lot, and they weren’t all wrong,” Mr. Moore noted. “They knew there was an invisible world.”
Critics attacked Newton as an occultist for theorizing about gravity, as it was unseen and not mechanical. (Over his lifetime, he would write far more pages on biblical hermeneutics and occult studies than on math and science.) Still, he dominated the society’s early years.
Many members considered themselves popularizers, in the best and most important sense of the word. Not Sir Isaac. Diffident, most comfortable roaming the recesses of his own mind, he cared not a whit for vox populi. He wrote his grand work on physics, “Philosophiae Naturalis Principia Mathematica,” in Latin. A copy sits in the Royal Society archives.
“Newton thought that knowledge belonged to those who were learned enough to use it,” Mr. Moore said.
The society’s influence has waxed and waned. As the founding members and their revolutionary enthusiasms passed into history, lords and earls reasserted intellectually deadening class privileges. (Although women made important if surreptitious contributions in the 18th and 19th centuries and even earlier, the society did not elect its first two female fellows until 1945.)
But always there was a hunger to find new discoveries, to record tides and temperatures, to discover new corners of a still wondrous world.
Explorers like James Cook were ardent collectors, as were many American colonialists. Benjamin Franklin joined the society, and its archives hold many of his papers. Even the early Puritans, wary of royalty, yearned for entry.
“Cotton Mather was desperate to get in,” Mr. Moore said. “He sent an account of a mastodon skeleton.”
Save for the odd misplaced mermaid, most of this history is splendidly cataloged. Curiously, the era most imperiled is the late 20th century. “The 18th-century works were written on lovely, solid rag paper,” Mr. Moore said. “But the 1970s and 1980s — everything was put on those early computers, and it’s a disaster.
“We have to look around hard just to find people who can still work with those floppy disks.”
Could This Happen in Kansas?
That Sir Paul Nurse spends the first 20 minutes of an interview about the Royal Society talking about the role of the United States is perhaps not surprising. He served a stretch as president of Rockefeller University in New York City. What happens to science in the United States, for good and ill, is too important to ignore. He wonders how it is that a nation that produces the wonders of Silicon Valley and great research centers in New York, Boston, Baltimore and Rochester, Minn., to name just a few, has large stretches where the theory of evolution is not taught.
“You don’t hear these debates in New York City, or indeed on either coast,” he says. “I wonder if American science would thrive if it were based in Kansas.”
Still, he reminds himself that he is a foreigner looking in the window. “Americans tend to like extremes. It’s either ‘We are on top of the world!’ or ‘The world is falling apart!’ ”
Some of those battles have started to jump the Atlantic with more vigor than in the past. Not long ago, it was rare to hear a political challenge in Europe to the scientific consensus around global warming. Not anymore.
Dr. Nurse is careful to emphasize that skepticism is the lifeblood of science; the verities of one age can become the superstitions of another. But he can’t hide his impatience with those who deny a strong human hand in global warming. You want to argue that the evidence points to only moderate warming? Brilliant; let’s examine the research. But to deny it altogether? The stakes are too high to play political games, he says.
“They say: ‘Well, no one believed Galileo.’ As if what? That’s an arrogant argument. Galileo prevailed very rapidly, as did Newton, as did Einstein,” he says. “The denialists have completely lost it.”
The leaders of the Royal Society conceive of themselves as a collective Cerberus, the mythical three-headed hound, guarding the doors of British science. “We are protected against creationism and the like by our national curriculum for now,” Dr. Nurse said. “But we should keep a very close eye on education. The American experience tells us that we must respond robustly to challenges.”
More broadly, he doesn’t fret about American dominance. That is just the way it is. Perhaps some cultural differences even accrue to the British side of the ledger.
“The U.S.A. has a very strong work ethic, and you keep a very close eye to the cutting edge,” he says. “We are a bit lazier. We drink more. But sometimes the science we produce is rather quirkier and more innovative.”
To walk the halls of the Royal Society is to feel the ancient excitements of science seep into your pores. But the society’s real challenge, Dr. Nurse says, is to point to the more magnificent unanswered questions that remain, and so light a spark.
He recalls, as a child in Norwich, running down a dirt road in his pajamas, looking at Sputnik 2 track a distant path in the predawn sky.
“I feel utterly privileged to be a scientist at this society,” he says. “To be paid to think and talk about such questions?
“Astonishing.”"


The Royal Society has been a great success.






Sunday, September 2, 2012

22:00, 9/2/12

You must lead.  Sooner is better.  As soon as you can is best.


NYTimes:

U.S. Companies Brace for an Exit From the Euro by Greece

Even as Greece desperately tries to avoid defaulting on its debt, American firms are preparing for what was once unthinkable: that Greece will soon be forced to leave the euro zone.


Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.
No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone.
That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.
JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.
Stock markets around the world have rallied this summer on hopes that European leaders will solve the Continent’s debt problems, but the quickening tempo of preparations by big business for a potential Greek exit this summer suggests that investors may be unduly optimistic. Many executives are deeply skeptical that Greece will accede to the austere fiscal policies being demanded by Europe in return for financial assistance.
Greece’s abandonment of the euro would most likely create turmoil in global markets, which have experienced periodic sell-offs whenever Europe’s debt problems have flared up over the last two and a half years. It would also increase the pressure on Italy and Spain, much larger economic powers that are struggling with debt problems of their own.
“It’s safe to say most companies are preparing,” said Paul Dennis, a program manager with Corporate Executive Board, a private advisory firm.
In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow.
“Fifteen months ago when we started looking at this, we said it was unthinkable,” said Heiner Leisten, a partner with the Boston Consulting Group in Cologne, Germany, who heads up its global insurance practice. “It’s not impossible or unthinkable now.”
Mr. Leisten’s firm, as well as PricewaterhouseCoopers, has already considered the timing of a Greek withdrawal — for example, the news might hit on a Friday night, when global markets are closed.
A bank holiday could quickly follow, with the stock market and most local financial institutions shutting down, while new capital controls make it hard to move money in and out of the country.
“We’ve had conversations with several dozen companies and we’re doing work for a number of these,” said Peter Frank, who advises corporate treasurers as a principal at Pricewaterhouse. “Almost all of that has come in over the transom in the last 90 days.”
He added: “Companies are asking some very granular questions, like ‘If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?’ In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees.”
The recent wave of preparations by American companies for a Greek exit from the euro signals a stark switch from their stance in the past, said Carole Berndt, head of global transaction services in Europe, the Middle East and Africa for Bank of America Merrill Lynch.
“When we started giving advice, they came for the free sandwiches and chocolate cookies,” she said jokingly. “Now that has changed, and contingency planning is focused on three primary scenarios — a single-country exit, a multicountry exit and a breakup of the euro zone in its entirety.Banks and consulting firms are reluctant to name clients, and many big companies also declined to discuss their contingency plans, fearing it could anger customers in Europe if it became known they were contemplating the euro’s demise. Central banks, as well as Germany’s finance ministry, have also been considering the implications of a Greek exit but have been even more secretive about specific plans.
But some corporations are beginning to acknowledge they are ready if Greece or even additional countries leave the euro zone, making sure systems can handle a quick transition to a new currency.
In Europe, the holding company for Iberia Airlines and British Airways has acknowledged it is preparing plans in the event of a euro exit by Spain.
“We’ve looked at many scenarios, including where one or more countries decides to redenominate,” said Roger Griffith, who oversees global settlement and customer risk for MasterCard. “We have defined operating steps and communications steps to take.” He added: “Practically, we could make a change in a day or two and be prepared in terms of our systems.”
In a statement, Visa said that it too would also be able to make “a swift transition to a new currency with the minimum possible disruption to consumers and retailers.”
Juniper Networks, a provider of networking technology based in California, created a “Euro Zone Crisis Assessment and Contingency Plan,” which company officials liken to the kind of business continuity plans they maintain in the event of an earthquake.
“It’s about having an awareness versus having to scramble,” said Catherine Portman, vice president for treasury at Juniper. The company has already begun moving funds in euro zone banks to accounts elsewhere more frequently, while making sure it has adequate money and liquidity in place so employees and suppliers are paid without disruption.
FMC, a chemical giant based in Philadelphia, is asking some Greek customers to pay in advance, rather than risk selling to them now and not getting paid later. It has also begun to avoid keeping any excess cash in Greek, Spanish or Italian bank accounts, while carefully monitoring the creditworthiness of customers in those countries.
“It’s been a very hot topic,” said Thomas C. Deas Jr., an FMC executive who serves as chairman of the National Association of Corporate Treasurers. Members of his group discussed the issue on a conference call last Tuesday, he added.
American companies have actually been more aggressive about seeking out advice than their European counterparts, according to John Gibbons, head of treasury services in Europe for JPMorgan Chase.
Mr. Gibbons said a handful of the largest American companies had requested the special accounts configured for a currency that did not yet exist.
“We’re planning against the extreme,” he said. “You don’t lose anything by doing it.”"


The Telegraph Has posted a crisis page:

http://www.telegraph.co.uk/finance/financialcrisis/


Confidence is an effect and not a cause.
Mario Draghi cannot take action.


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2 September 2012 Last updated at 20:12 ET

ECB urged to take eurozone actionEuro coin

The head of the Organisation for Economic Co-operation and Development calls on the European Central Bank to take action on the eurozone crisis.

The Pirate Bay screenshotPirate Bay founder Warg arrested

Gottfrid Svartholm Warg, one of the founders of the popular file-sharing website Pirate Bay, is arrested in Cambodia, police say.

Dead whalesPilot whales stranded in Scotland

A total of 16 pilot whales die and 10 others are saved after being stranded on the east coast of Scotland.


Good night.




















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Saturday, September 1, 2012

@22:25, 9/1/12

The GOP seems to have dropped out of the headlines.
Europe gets the follow spot.

 

 

http://www.telegraph.co.uk/finance/financialcrisis/#

The Telegraph has torn up the page. 

http://www.telegraph.co.uk/finance/comment/liamhalligan/9514169/Will-Mario-Draghi-deliver-on-his-promise-to-buy-bonds.html
Mario Draghi  cannot deliver.

"Will Mario Draghi deliver on his promise to buy bonds?

With Ben Bernanke's deeply inconclusive Jackson Hole missive now behind us, all eyes are firmly fixed on European Central Bank president, Mario Draghi.


6:20PM BST 01 Sep 2012

76 Comments
Back in early August, Draghi publicly pledged to do "whatever it takes" to prevent the break-up of the single currency.
This statement, which a vacationing Angela Merkel didn't contradict, was taken as a sign that the ECB would soon be buying large quantities of government bonds issued by essentially bankrupt eurozone nations.
As such, Spanish and Italian yields stopped rising and global markets remained calm during the dog days of summer – moving mainly sideways, albeit on very low volumes.
Encouraged, perhaps, by the soothing power of his rhetoric, and certainly by the German chancellor's silence, Draghi then stuck his head another few inches over the parapet. His "whatever it takes" message was followed up with an anonymously sourced statement that the ECB is considering "caps on yields".
Such a policy would force the ECB to buy a nation's bonds if the yield spread on those bonds widened a certain amount compared with its German equivalent.
If that sounds complicated, then take it from me the policy amounts to an open-ended ECB commitment to buy bonds on a potentially unlimited scale, even if financed by straight-forward monetisation.
Forbidden by the European treaties, such an idea also cuts deep into Germany's inflation-scarred psyche. No wonder the "yield cap" idea was unsourced. No wonder, also, there are now signs of serious resistance from Berlin – or, at least, from Frankfurt, courtesy of the mighty Bundesbank.
Jens Weidmann was last week unable to contain himself. The Bundesbank chief lacerated not only yield caps but also the very idea of further ECB bond-buying. "Such a policy is, for me, too close to a public finance by the printing press," Weidmann declared, well aware that his words chimed precisely with mainstream German opinion. "We should not underestimate the risk that central-bank financing can be addictive like a drug."
Juergen Stark, a former ECB chief economist, also piled in, declaring that "panic-fuelled and hyperactive measures" were having "negative effects on the credibility of and confidence in the bank and the currency". The ECB is treading a "very dangerous path" in "allowing its independence to be eroded by politicians", warned Stark, who resigned last year, in protest at earlier ECB bond-buying.
Weidmann's predecessor as Bundesbank chief, Axel Weber, also quit last year, for the same reason. There have been rumours lately that Weidmann is now thinking of doing the same, rumours he has been "forced to deny" even if he started them himself.
On cue, Draghi has been in retreat in recent days, trying to mollify Teutonic concerns that the eurozone printing presses will be fired up, with dire inflationary consequences. "The ECB will do what is necessary to ensure price stability," Draghi purred. "It will remain independent and will always act within the limits of its mandate."
In practically the same breath, however, Draghi insisted that "exceptional measures" are also necessary. As such, "Super Mario" is widely expected to detail a bond-buying plan to further contain Spanish and Italian borrowing costs after the next ECB policy meeting on September 6 – this coming Thursday. If he fails to do so, after all this hype, then the markets could surely rebel.
For even though financial markets have recently been calm, the eurozone is enduring an alarming slow-motion bank run. During previous chapters of this crisis, depositors and investors fled the "peripheral" countries, putting their money in "core" countries such as Germany. Now, there are growing signs capital is quitting the eurozone altogether. Even after strengthening a little during August, courtesy of Draghi's warm words, the euro is still down 6pc against the dollar since early May. The exodus from monetary union has forced the Swiss National Bank to buy euros to prevent the franc appreciating. The Danish Central Bank, meanwhile, has taken the drastic step of charging for the use of its deposit facility – again to try to prevent an export-pummelling currency spike. Eurozone capital flight also explains, along with our own domestic money-printing, why UK gilts are so low.
With Draghi having whipped the markets up into a state of high expectation on the one hand, and the Bundesbank in open revolt on the other, the pressure on Merkel is now enormous. She has, since returning from vacation, said just enough not to shoot down Draghi's bond-buying plan completely, but it would still be a very big step indeed for her actually to give him the nod to proceed.
The eurozone economy continues to deteriorate. Unemployment hit a record-high of 18m in July, we learnt on Friday, as another 88,000 people lost their jobs. Surveys of business confidence are flashing red, indicating that even Germany itself could be on the brink of recession. Eurozone inflation, meanwhile, is refusing to abate, jumping to 2.6pc year-on-year in August, from 2.4pc the previous month. That could dash any remaining hope of Draghi conjuring up an interest rate cut next week, to go alongside his "exceptional measures".
Even the Chinese are now putting the thumb screws on Merkel. Premier Wen Jiabao last week told the German chancellor that China and the broader international community are "worried" about the prospect of contagion from the single-currency area, in the aftermath of a systemic collapse. Wen has asked Berlin for clarification over whether Italy and Spain would adopt the "comprehensive rescue measures" needed to unlock the EU bail-out machinery, so opening the door to bond purchases by the ECB.
While Merkel replied by insisting that euro-denominated sovereign debt remains a "safe investment", it is clear that unless Beijing sees some ECB money-printing, and fast, it could soon become a net seller of eurozone government bonds. This is truly alarming. Until now, China has been propping up bond prices with net debt purchases within the eurozone. All the eurocrats' assumptions about funding for future bail-out packages also include a big chunk of money from Beijing. By breaking its silence, China seems to be putting a gun to the Iron Frau's head.
In the end, though, while Merkel is in the spotlight, the decision on whether ECB bond-buying goes beyond the €50bn (£39.6bn) or so of Greek bonds hoovered up since mid-2010, extending to much bigger purchases of Spanish and Italian instruments, rests largely with Spain and Italy themselves. The real obstacle, as Wen intimated, is that Madrid and Rome must apply for assistance from the European Stability Mechanism, the successor to the European Financial Stability Facility, so accepting the attached policy conditions of a formal bail-out. Were this to happen, then Merkel could possibly – no more than that – muzzle the Bundesbank rottweilers and convince the German public, for now, to give her the benefit of the doubt.
What's clear is that, whatever Draghi says this week, nothing will happen before September 12, when the German constitutional court decides if the ESM is actually legal. Then the new bail-out fund must be ratified, which won't happen at least until the end of the month – and that's if all eurozone governments agree.
Even bigger questions loom, though. Spain and Italy had been hoping the ECB would support them on the basis of home-grown austerity measures without enduring the political humiliation, and related market trauma, of applying for a condition-related bail-out. Will Madrid and Rome now bury their pride and agree to some tough Berlin-imposed limits on what they can and cannot do? Will the feisty Spanish and Italian electorates accept such demeaning anti-democratic subjugation?" 

Zero Hedge:

September Arrives, As Does The French "Dexia Moment" - France Nationalizes Its Second Largest Mortgage Lender

Bank Run Bond Counterparties European Central Bank Fail Fitch fixed France Greece Housing Market Ireland Italy Lehman Lehman Brothers LTRO Market Share Nationalization Portugal Rating Agency ratings Real estate Reality Repo Market Reuters September has arrived which means for Europe reality can, mercifully, return. First on the agenda: moments ago the French government suddenly announced the nationalization of troubled mortgage lender Credit Immobilier de France, which is also the country's second lagrest mortgage specialist after an attempt to find a buyer for the company failed. "To allow the CIF group to respect its overall commitments, the state decided to respond favourably to its request to grant it a guarantee," Finance Minister Pierre Moscovici said according to Reuters. What he really meant was that in order to avoid a bank run following the realization that the housing crisis has finally come home, his boss, socialist Hollande, has decided to renege on his core campaign promise, and bail out an "evil, evil" bank. Sadly, while the nationalization was predicted by us long ago, the reality is that the French government waited too long with the sale, which prompted the Moody's downgrade of CIF by 3 notches earlier this week, which in turn was the catalyst that made any delay in the nationalization inevitable. The alternative: fears that one of the key players in the French mortgage house of cards was effectively insolvent would spread like wildfire, leading to disastrous consequences for the banking system. End result: congratulations France: your Fannie/Freddie-Dexia moment has finally arrived, and the score, naturally: bankers 1 - taxpayers 0. 

Saturday, September 1, 2012

Links 9/1/12

By lambert strether
Bernanke confirms bias towards easing FT (text).
Bernanke signals more stimulus, steps into election battle McClatchy
Ben Bernanke Takes Us on a Stroll Down Memory Lane Bloomberg
Bernanke at Jackson Hole Tim Duy
Bernanke on the defensive Felix Salmon
If QE3 is so close, why is the Fed’s balance sheet shrinking? FT Alphaville
The Jackson Hole Speech People Should Long Remember WSJ. Andy Haldane’s “The Dog and the Frisbee.”
The financial system rests on quicksand FT. Excellent, says Yves.
Big Finance’s Best Friend Boston Review. The aptronymic Bob Shiller.
Spain creates bad bank, injects funds in Bankia Reuters
Weidmann resignation report turns up heat on ECB’s Draghi Reuters
Chart of the day Wonkwire. Falling capex.
Factory orders post biggest rise in one year Reuters
A Dismal Outlook for Growth Economix, Times
America’s Descent into Poverty Economic Populist
Corn, soybean prices at all-time high worldwide, World Bank says LA Times
New rules governing organ transplants to be drawn up amid fear of organ sales on social networking websites Independent
Hermès raises profit and revenue targets FT
Desert storm! World’s wildest party underway at city in the sand as 60,000 gather in searing Nevada heat for Burning Man festival Daily Mail
Mother’s love exports cosplayers to overseas fans Asahi Shimbun
In Search of the Living, Purring, Singing Heart of the Online Cat-Industrial Complex Wired
Political gridlock threat to Japanese spending Times of India
Modern China: A tale of luxury villas and displaced villagers McClatchy
Brazil’s Listless Growth Continues WSJ (JC)
Brazilian Congress waters down forest protection Nature
The Future’s So Bright… Foreign Policy. Africa’s booming economy.
It’s Becoming Clear That No One Actually Read Facebook’s IPO Prospectus Or Mark Zuckerberg’s Letter To Shareholders Henry Blodget
Exclusive: Walmart tests iPhone app checkout feature Reuters
Apple Feels Reporting Drone Strikes ‘Objectionable And Crude’ And Rejects App Techdirt. Tag: reporting-the-news-is-bad.
How many Kindle Fires were sold? Aymco
Software Meant to Fight Crime Is Used to Spy on Dissidents Times (furzy mouse)
An Infantilizing Speech American Conservative
The End of Gasoline Warfare The Archdruid Report
Read more at http://www.nakedcapitalism.com/2012/09/links-9112.html#eugdK7B81fZF8sZp.99

http://www.guardian.co.uk/business/debt-crisis

 

this was yesterday.

Ireland 'may have to cut public sector wages'

The Irish health minister warned that the Irish coalition government may be forced to cut public sector wages if spending targets under its EU bailout are to be met.
31 Aug 2012
| Comment
 
 
Krugman:

Monetary Versus Fiscal Policy, Revisited

One recurring complaint from commenters on this blog is that they can’t figure out where I stand on monetary versus fiscal policy as a response to a deeply depressed economy. Sometimes, they say, I declare that monetary policy is ineffective once you’re at the zero lower bound; other times I berate Ben Bernanke for not doing more. Which is it?
But it’s not a contradiction. Mike Woodford’s latest paper, especially taken in tandem with his paper last year at the Cambridge Keynes conference, actually explains it all.
What Mike demonstrates is the point that liquidity-trap worriers have been making for a long time – actually, ever since my 1998 piece. Current monetary policy is indeed ineffective in a liquidity trap; but there is still scope for central bank action in the form of credible commitments to keep monetary policy easy in the future, when the economy is no longer at the zero lower bound.
The trouble is how to make those credible commitments. Actually, it’s a two-stage problem. First you have to convince the central bank itself that it’s a good idea to signal that you won’t return to normal policy (say a standard Taylor rule) as soon as the economy lifts off from the liquidity trap; then you have to convince the private sector that the central bank will not, in fact, just revert to type once the crisis is past.
My judgment back in late 2008/early 2009 was that it would take a long time to get through those two stages; indeed, as Mike’s paper makes clear, four years into the Lesser Depression the Fed is still inching up toward stage one. Meanwhile, the slump was already upon us.
What about fiscal policy? As Mike pointed out in his earlier paper, fiscal stimulus in a liquidity trap doesn’t require that you convince the market that you’re going to behave differently once the crisis is past. It doesn’t depend on expectations at all; the government just goes out and creates jobs. So it made a lot of sense to argue for stimulus as the main immediate response to the slump.
But isn’t fiscal stimulus also a hard sell politically? Yes, indeed – although the truth is that we did get some, and it probably had a major impact in softening the economic blow. And we would have had more if not for the scorched-earth opposition of Republicans, which is not a problem of economic analysis.
So what should well-meaning economists do now, with both fiscal and monetary policy falling short? The answer is, campaign on both fronts, trying to convince influential players both that austerity is wrong and that the Fed needs to start signaling its willingness to see more inflation before it raises rates.
And that’s more or less where I am."


Reuters:  nothing.

















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