Moon of Alabama Brecht quote
March 31, 2005


idea by Cloned Poster

Tom DeLay commenting Terri Schiavos death:

"The time will come for the men responsible for this to answer for their behavior, but not today. Today we grieve, we pray, and we hope to God this fate never befalls another."

A blood-covered girl screams after her parents were fatally shot by soldiers with the 1st Battalion, 5th Infantry Stryker Brigade Combat Team of the 25th Infantry Division

January 18, 2005; Photo Chris Hondros; Link

At least this girl may not die of hunger as so many others kids are now dying in Iraq and so many more will in the coming Great Iraqi Famine.

But this girl will take her revenge - slowly but determined.

The girl will follow "holy" words, more than De Lay may anticipate, following these lines:

The unit's chaplain, Capt. Ed Willis, says there's no reason to feel guilty: "If you kill someone on the battlefield, whether it's another soldier or collateral damage, that doesn't fit under 'Thou shalt not kill'."

That girl, not Terri Slave or Tom DeLay, will define where the next battlefield is. And it may not be in the Middle East.

(The sun shined today, it was quite a dark day.)

Posted by b on March 31, 2005 at 04:04 PM | Permalink | Comments (19)

Billmon: Medicine Show

.. One of the most outrageous aspects of the whole sorry Schiavo circus was the willingness, nay, eagerness of complete idiots -- and even their inferiors, the cable news people -- to second guess the doctors. People you wouldn't trust to fix your downstairs toilet suddenly thought they know more about neurology than men and women who spent, oh, ten or twelve years of their lives learning to be doctors, and another two or three decades as practicing board-certified neurologists, and who repeatedly, over the course of ten years, two trials and more appeals than you can shake a catheter at, examined, tested and diagnosed Terri Shiavo -- making her probably the world's most over-treated patient.
For better or worse, good or evil, her time on this earth is over. But when I think of the thousands, or even millions, of lives that could ride on the next big trial-by-media -- when the topic might be war with North Korea or the reality of global warming or the copyright laws governing the music industry (I'm kidding! I'm kidding!) -- I get worried. Because right now, the corporate media (and the dumbed-down culture it's helped create) are beginning to look more and more like the intellectual equivalent of Dr. Kevorkian. And any of us -- or all of us - could be their next patient. ...


Posted by b on March 31, 2005 at 01:56 PM | Permalink | Comments (11)

Billmon: Fighting Words

An answer to critics of Billmons grand Freak Show piece. Again a good one ...

Posted by b on March 31, 2005 at 01:49 AM | Permalink | Comments (10)

March 30, 2005

Billmon: The Soldier Who ...

The Soldier Who Saw Everything Twice
Today's key document, I think, is former Sen. John Danforth's op-ed in the New York Times, which can be read as both his own personal declaration of independence from the religious right, and a manifesto calling upon the Republican Party to do likewise.
The fact that the movement's radical agenda can't be satisified within the rule of law, and the New Model Army's growing frustration with the lip service it is getting from the politicos, may rattle the nerves and offend the sensibilities of the Republican pundit class, but the real GOP leaders, the ones who have power and know how to use it, realize the ships have all been burned and there's no going back.

Posted by b on March 30, 2005 at 02:45 PM | Permalink | Comments (16)

Optimist or Pessimist?

The UN has come out with its Millenium Environmental Assessment.

The Financial Times' pessimist take: World ecosystems in danger, UN warns


Meteor Blades' optimistic outlook: The Gloom-and-Doomers Say There's Hope

Which side are you on?

More content from the pessimists:

World ecosystems in danger, UN warns
The world's sources of fish and fresh water are so rundown that they can no longer sustain current or future demands, according to a first international report card on the world's environment published today.

The Millennium Ecosystem Assessment, launched by the United Nations in 2001, said that the unprecedented changes humans had made to ecological systems in the past 50 years to meet demands for food, water and energy had helped to improve the life of billions.

But it found that 15 out of 24 types of support provided to humans by the environment were being degraded and the harmful consequences could become significantly worse in coming decades.

Overexploitation of natural resources was increasing the likelihood of abrupt changes such as the emergence of new diseases, sudden alterations in water quality, the creation of "dead zones" in seas, the collapse of fisheries and regional climate shifts.

The study also warned that ecosystem damage was a "road block" to achieving the already elusive 2015 millennium development goals to eradicate poverty and hunger, improve health and environmental protection.

The UN has already warned that in the absence of a dramatic mindshift and an increase in aid flows, the world will miss the 2015 targets on health and poverty.

The project to examine the state of forests, oceans, rivers and farmland and their impact on human wellbeing was carried out by 1,300 scientists in 95 countries.

More from the optimist side:

The Gloom-and-Doomers Say There's Hope

Prognostications of disaster - from Malthusian population scenarios to nuclear holocaust - have proved wrong in the past, so we can expect an outpouring of rightwankery labeling this latest report pessimistic buncombe. It was, after all, commissioned (primarily) by the United Nations, which is about as popular among rightists as Ann Coulter is at a mosque.

So, if you're one to venture into reactionary territory on the blogs or other media, count on reading rips of the Millennium Assessment smattered with epithetical references to Paul Ehrlich, Lester Brown, Greenpeace, the Sierra Club, Julia Butterfly Hill, David Suzuki and the Club of Rome.

What will be missed in all this chatter, I'm can just about guarantee, is that accompanying the report's gloomy assessment is a brighter possibility: if we take action the crises can be overcome.

Posted by Jérôme à Paris on March 30, 2005 at 07:05 AM | Permalink | Comments (24)

March 29, 2005

Billmon: The Spirit of Enterprise

The Spirit of Enterprise plus a Coming Attraction

Why is this hard to not believe anymore?

Posted by Jérôme à Paris on March 29, 2005 at 05:48 PM | Permalink | Comments (21)

Open Thread 05-32

News, views and visions ...

Please share yours here.

Posted by b on March 29, 2005 at 03:53 PM | Permalink | Comments (65)

JimJeff at the NPC: Freak Show

Mr. GuckertGannon has been invited to a panel on blogging by the National Press Club.

The "professional whore" at the Whiskey Bar, Billmon, calls this a Freak Show.

Guckert is on the panel for the same reason Wonkette is: anal sex. Jeff gets paid to give it and Anna Marie gets paid to talk about it, and the "bottoms" at the National Press Club get paid to . . . well, you know. How anal sex got to be THE ticket to blogging fame and fortune (instead of just a sore bottom) I don't fully understand...
What's next? An interactive NPC panel session on masturbation? A guest lecture on bestiality and blogging? A press conference by the North American Man Boy Love Association? No, wait, the House isn't in session this week.

A great piece full of love.

Posted by b on March 29, 2005 at 02:32 PM | Permalink | Comments (11)

Down Under

Dr. Rice, there is an urgent call from Canberra ...

From the Lowy Institute for International Policy, Sydney, a poll on public opinion and foreign policy (PDF, 500KB).

Looking beyond our shores, Australians feel most positive about the countries with which we have longstanding, deep and stable relationships. New Zealand (94%), the United Kingdom (86%), Europe (85%), Singapore (83%) and Japan (84%) are our favourites, quite closely followed by China (69%).

The glaring omission from this list is the United States, for which only 58% of Australians have positive feelings. ... So what is it about America that we don ’t like? For a start, 68% of Australians think we take too much notice of the views of the United States in our foreign policy. When we asked respondents to rate a series of potential threats, we discovered that by one measure both Islamic fundamentalism and United States foreign policies are worrying to 57% of Australians: a startling equivalence. By the same measure, China ’s growing power worries only 35% of Australians, and comes last in a list of threats.

Posted by b on March 29, 2005 at 02:00 PM | Permalink | Comments (19)

Billmon: 03/29

Really Sick Joke of the Day Billmon sez and luaghs and goes to hell

"... to recyle an old Vietnam War slogan, it looks like it’s Sink or Swim with Abdelaziz Hakim"

Posted by Jérôme à Paris on March 29, 2005 at 01:59 AM | Permalink | Comments (15)

March 28, 2005

Pharmacists' Rights Debated

WASHINGTON (RBN)  Some pharmacists across the country are refusing to fill prescriptions to treat erectile dysfunction, saying that dispensing the medications violates their personal moral or religious beliefs.

An increasing number of clashes are occurring in drugstores across the country. Pharmacists often risk dismissal or other disciplinary action to stand up for their beliefs, while shaken man desperately call their doctors, frequently late at night, after being turned away by sometimes-lecturing men and women in white coats.

"There are pharmacists who will only give potency enhancing pills to a man if he's married," said Adam Sonfield of the Alan Guttmacher Institute in New York, which tracks reproductive issues. "There are even cases of pharmacists holding prescriptions hostage, where they won't even transfer it to another pharmacy when time is of the essence."

That is what happened to Heather Pilz and her lifetime friend, who panicked when the condoms they were planing to use suddenly seemed extremly oversized. Their fear really spiked when the Walgreens pharmacy down the street from their home in Milwaukee refused to fill an emergency prescription for a sildenafil citrate drug.

"I couldn't believe it," said Pilz, 44, "How can they make that decision for us? I was outraged."

Wisconsin is one of at least 11 states considering "conscience clause" laws that would protect pharmacists. Four states already have laws that specifically allow pharmacists to refuse to fill prescriptions that violate their beliefs.

"What is a man supposed to do in rural America, in places where there may only be one pharmacy?" asked Bob Dole, who has had some problems corrected through such drugs after a prostate surgery. He is launching a campaign today to counter the trend. "It's a slap in the face to men."

In the end, Pilz was able to obtain her friends prescription last June directly from his doctor.

"I was lucky," Pilz said. "I can sympathize with someone who feels strongly and doesn't want to be involved. But they should just step out of the way and not interfere with someone else's decision. It's just not right."

Posted by b on March 28, 2005 at 01:13 PM | Permalink | Comments (38)

Billmon: 03/28

Billmon scoop: Christian Soldier Bill Tierney,  torturer in Iraq and Schiavo supporter.

And let me add:

Bill Tierney, a former UN weapons inspector, said the evidence pointed directly to Saddam preparing to launch chemical attacks.
He said: "The key point is that the Republican Guard have been issued this new equipment. It would indicate that they are prepared to use chemical weapons."

there is more to google

Et Tu, Gigot?

As Helena Cobban points out.

57 ... days since Iraqis elected an Assembly with a UIA-list majority, without that list being allowed to take power. This delay eats into the time left to negotiate a Constitution, which was 213 days in all.

Billmon's Let's Make a Deal takes an even longer view.

Please allow me to introduce myself - I’m a man of wealth and taste...

The Omen

Posted by b on March 28, 2005 at 03:28 AM | Permalink | Comments (8)

Billmon: In the Steppes of Central Asia

Fitting Jérômes Great Game piece, Billmon writes about managed democracies In the Steppes of Central Asia

Posted by b on March 28, 2005 at 03:11 AM | Permalink | Comments (6)

March 27, 2005

The Great Game

Oil & gas in the Caspian has a long history - indeed it is one of the earliest oil production regions in the world, with Baku a major oil center in the second half of the 19th century and beyond. What makes the situation today interesting is the simultaneuous appearence of three things: (i) new reserves disovered offshore, (ii) the fact that, with the break up of the Soviet Union, the oil is located in (new) countries that are keen to have foreign investment and (iii) these countries have no direct access to the world markets, the Caspain Sea being a closed sea.


(picture from the US Energy Information Agency's Caspian area brief)

(Warning: about 200kb of maps after the jump)

"Caspian energy" actually covers 3 different things:

- the oil production in the region developped under Soviet times, and connected to Russia by oil pipelines. This concerns mostly Kazakhstan, Uzbekistan, and a very small volume of production from Azerbaijan. That oil is usually produced by the national oil company created in each of these countries to pick up the Soviet assets in the sector, and sold to (or through) Russia on the basis of bilateral governmental agreements. This sector is declining and is slowly being replaced by the one described in the third bullet below. Transportation issues that go with it are more and more resolved through the negotiations ongoing in the third sector instead of through the usual Head-of-State-to-Kremlin "dialogue";

- the gas production in the region developped under Soviet times, and also connected to Russia by (gas) pipelines. This concerns mostly Turkmenistan and Uzbekistan. That gas is almost exclusively produced by the national company, and also sold to (or through) Russia on the basis of bilateral governmental agreements. In the absence of the new sector (below) like for oil, Russia has absolute power over these countries and their gas production, because they have absolutely no other choice. They would like to have other pipelines to export their production (for instance going South to India or Pakistan via Afghanistan), and some people seem to tell them that this would be possible, but IT IS NOT. I have written about this elsewhere, and will do so again in the comments if requested, but you need just remember one thing: the mooted pipelines through Afghanistan would be gas pipelines, not oil and they have no chance to being built for a very long time because nobody will pay for them.

- the third and most interesting sector is the new investments being made by Western Oil Majors to develop recently discovered fields, mostly in the oil sector. This is where most of our attention will focus, because that's what most of the diplomacy of the past 15 years has been concerned about, with two main topics (i) how to make the investments to develop production, and (ii) how to get the hydrocarbons to the market once produced.

It is this new sector that has created the hype around the Caspian and its new reserves, because it is one of the few areas in the world where big fields have been discovered in recent years. The excitement in big oil companies is real, because the province is probably the size on the North Sea AND it is accessible to them. Being the size of the North Sea only, it will not change the oil balance of the world either - it will account at most for 3-5% of world production at its peak, in 5 to 10 years.

I have some good news: Caspian oil is actually fairly simple to understand because there are only 5 hydrocarbon fields worth noting, and a couple of pipelines. So here they are:


(table from EIA, same link as above)

(1) ACG (formerly, AIOC)
That's the big oil field just offshore of Baku in the Azerbaijan sector of the Caspain Sea. It is currently the only field in Azerbaijan with proven oil reserves, despite massive exploration campaigns in the past 10 years. It is currently being developed by a Western consortium led by BP (which includes Unocal, Devon, Amerada-Hess and ExxonMobil of the USA as well as a number of other companies), under a contract signed in 1994 (and which is public, you can download it here, along with a ton of other documents on the project). It has an estimated 5 to 7 billion barrels of recoverable oil (slightly less than what is hoped to be found in ANWR, to give you an idea). It has been producing small volumes, about 100 to 150,000 b/d, since 1998, which are exported by a small pipeline going to Georgia, the Baku-Supsa. (They also have the right to use the Baku-Novorossisk pipeline going through Russia, see the maps below).
Big investment is underway to bring production to between 800,000 and 1,000,000 b/d in the next couple of years. Whan I say big investment, I mean big: about 12 billion dollars will have been spent by 2010. Most of that oil will use a new pipeline, the BTC (see below) which is currently being built.


(2) Shah-Deniz. It's a big mostly gas field offshore Azerbaijan. It is actually the only significant discovery of hydrocarbons in the Azeri sector, but it is gas, which was not the best of news for the oil companies, as the markets are very, very far away. The consortium is also led by BP (with Total, Statoil of Norway, TPAO of Turkey and OIEC of Iran) and it has managed to go ahead with the development of the project by signing a contract for the gas with Turkey (although there are doubts about Turkey's need for that gas). BP has agreed to build a gas pipeline in parallel to the BTC oil pipeline to bring the gas to Turkey, and they are now hoping to build new pipelines form Turkey to central Europe to be able to give more value to that gas. That project is still in its early phase, but you can find more details by clicking on this link which refers to its codename: Nabucco (pdf, 280 kb), which includes this map:.


(3) Tengiz
A big onshore oil field in Kazakhstan - one of the biggest in the world, developped by a consortium led by ChevronTexaco (and including ExxonMobil, Lukoil and ENI of Italy), with about 9 billion barrels of recoverable reserves (another ANWR). Although Chevron came in in 1993, they have had a really hard time with that field, as they had no way to export the oil anywhere. They have used amazing ingenuity to sell their oil (including owning most of the railcars of the former Soviet Union - about 9,000, to sell their crude by rail, or sending barges all the way to Finland by the canals of Russia) but this has seriously limited the production of the field. Now that the CPC pipeline has finally been built (see below), they are finally ramping up production, which is expected to reach 700,000 b/d in a few years.

(4) Kashagan
The biggest oil field to be discovered in the past 30 years, it is in the North of the Caspian Sea, in the Kazakh sector (see a detailed map here), and it is being developped by a consortium including all the big majors (ExxonMobil, Shell, Total, ConocoPhillips, ENI, BG and Inpex, with ENI, the Italian group, as the operator (Exxon did not want Shell, Shell did not want Exxon, and ENI was smarter than Total to be voted in...). With 9-15 billion barrels of reserves (exploration is not totally complete), it is yet at least another ANWR fully in control of BigOil, but it is very challenging technically (very high pressures, located in an areas which is at times seawater, ice, mud or any combination in between, and far away from any transport infrastructure in an area with a very tough climate) and it will need to find export routes for its production (a combination of CPC and BTC is likely to start with).


(See here for a larger version with full explanations)

(5) Karachaganak
A big, mostly gas field in North Kazakhstan near the border with Russia, it is being developped by ENI, BG, ChevronTexaco and Lukoil. As a gas field, it is heavily dependent on Russian gas monopoly Gazprom (the gas is currently being processed at the nearby Orenburg Gazprom plant), but the consortium is strong enough to negotiate decent terms and to build its own infrasturcture. As the field contains both gas and liquids (i.e. good quality oil) which have to be produced together, the consortium has focused on selling the oil on the world markets and selling the gas at a low price to Gazprom. The oil will go into the CPC pipeline.

So this bring us to the pipelines. There are a number of existing ones, most of which go through Russia and are thus considered by the oil majors - with reason - as unreliable. They have thus made a lot of efforts to find new routes.
A simple solution would have been to ship oil to northern Iran (where Iran's refineries are) and swap it for Iranian oil produced in the south of the country. This made good sense for Iran, which would not have needed to ship its own oil for the production in the south to its refineries in the north, but it is not possible under the current US sanctions regime (ILSA). This solution would be partial anyway as the capacity of the Iranian refineries is no more than 800,000 b/d and they would have needed significant investment to ba able to use the Caspian crude qualities.
So with Russia and Iran out, this left only the Western (and at a later point Easter to China) routes. An additional problem is that of the Bosphorus, which already sees a significant volume of oil tanker traffic, which the Turkish authorities were keen to not see increase. Bringing in an additional million barrel per day or two into the Black Sea (on the coast of Georgia for instance) would have created a real danger for Istanbul and this was thus stronly opposed.

Thus came to birth the BTC, which goes West from Azerbaijan, through Georgia, and then South through Turkey to the Mediterranean. It is being built by a consortium led, again, by BP (which, interestingly, is different from either the ACG consortium and the Shah-Deniz consortium)


You can find a massive quantity of information on the project starting from here, but the main thing to know is that it will have a capacity of 1,000,000 b/d, a good chunk of which will be used by ACG oil to start with, and all the liquids Shah-Deniz can produce. It is currently being built and is expected to come into service by the end of this year. It has cost 3-3.5 billion dollars to build, more than half of which was financed by international banks with the participation of the World Bank and the EBRD.

You've probably heard nasty things about the project because it has been used as a target by a number of NGOs that absolutely want the World Bank to stop financing the energy sector, and they tried to show that such projects were tremendously damaging to the environment and to the local populations. They've put pressure on the World Bank, on the commercial banks and on the oil companies, thankfully to no avail (this is not the topic here, but I do intend to write more about this and explain that "thankfully". In the meantime, you can go see the envirionmental reports on the BTC site linked to above, and otherwise google "Extractive Industries Review" or "Equator Principles")

The other big pipeline in the region is the CPC (Caspian Pipeline Consortium) which, as you can see on the maps above, does go through Russia and does bring oil into the Black Sea. It nevertheless has the particularity of being the only privately owned pipeline on the territory of Russia (something that they really don't like and are trying to undermine at every turn, especially these days as an extension is being discussed). It was built (and paid for) by a consortium led by ChevronTexaco, and currently has a capacity of 450,000 b/d, due to be increased to 1,300,000 b/d. It is used for oil from Tengiz and soon from Karachaganak.

So, what can be learnt from that?

- Big Oil fully controls the operations of the 5 major oil fields, so the region clearly falls in the sphere of influence of the "West". The two producing countries have made an explicit decision to welcome foreign investment and will be richly rewarded for it. The revenues is split using a standard instrument, the PSA (production sharing agreement), which allocates the oil produced first to repay the initial investments ("cost oil") and then as profit ("profit oil"). Host countries get a growing share of the oil as the fields produce and as prices go up. The marginal split usually gives more than 90% to the host country.

- Oil transit is also pretty much solved, with the CPC in service and the BTC about to be. These two pipelines will bring significant new volumes of oil into the Mediterranean oil markets and are enough to transport the expected oil volumes from the existing fields. Oil majors have been smart enough to lead in parallel the investments in the upstream (production) and midstream (transport) and have thus been able to ramp up the production of their fields as fast as was possible under the circumstances (it still took time - more than 10 years for both ACG and Tengiz, with the same expected for Kashagan).


- Gas is still an almost completely blank field for the Western oil majors. They have not been really happy to find gas when they did, as it is a lot harder to manage (infrastructure is a lot more important and more expensive) and they have to face a much stronger adversary in Gazprom, the Russian monopoly, which controls both the existing infrastructure and the downstream markets in Europe. (The outcome of the Nabucco project will be interesting thing to see, as it would create a new (smallish) competitor for Russian gas in Europe)

- the Caspian oil will go entirely West for the next 10 years, but it is likely that the next route will go east to China. China is making a lot of efforts, especially in Kazakhstan, to procure some oil, but with uneven results. They have tried to buy out BG's stake in Kashagan, but the other shareholders exercised their preemption rights despite strong Chinese pressure (they even threatened to kick Shell our of the Chinese refining business, to no avail). Nevertheless, there is a strong strategic rationale for it to happen eventually.


- don't be impressed by big numbers. We're talking close to 50 billion dollars of investments in a few years. Upfront. (That's what you spend, almost, before getting any revenue)

- please, please be wary of what you read on this topic. Too many people have other interests that you may not be familiar with and their public announcements should be taken with a grain of salt; don't believe that everything which is announced will happen; don't even believe that everything signed will happen. It's not because Halliburton is involved that it is necessarilty a big plan to scam us off (KBR, the Halliburton subsidiary, is one of the biggest contractors for big oil projects, and one of a few to be in the competition. Please remember that they are paid by Exxon or ChevronTexaco and thus will not scam them like they seem to be able to do with the US government).

- finally: don't forget that people are going to these God-forsaken places to get the oil that YOU will be burning today, tomorrow and again. Before blaming them for providing a valuable service, remember that they are providing that service ultimately to YOU.

There is a lot more to write on the topic; I am not avoiding any subject and would be pleased to provide more info in the comments at your request.

Posted by Jérôme à Paris on March 27, 2005 at 04:56 PM | Permalink | Comments (20)

Billmon: 03/27

Parental Guidance Suggested

That the Judges May Judge Them

Posted by b on March 27, 2005 at 03:23 PM | Permalink | Comments (4)


So far Moon of Alabama does not have a blogroll. A blogroll is a collection of hyperlinks to other blogs of interest and usually only of affiliated direction.  I do think this concept falls short, but I do want an equivalent.

A blog should carry a link list that includes blogs, but also news sources and encyclopedias.  It should only include those that are of repeated interest and regularly updated. It should be categorized and not just alphabetically sorted. It should not include pay sides. It should reflect the blogs author and visitor interests but also include contrary views.

Each link should have some indication of the content, the update cycle and the author.

News blogs:
Flogging the Simian (daily)
by Soj, a US girl professionally piece-blogging from Romania on World News and conflicts in lesser known countries

I am working on converting my browser bookmarks right now. You may want to add links in the comments. I will aggregate them and come up with a collection that then can be reviewed again during the next days.

Categories I have so far include:
General News Sites; General News Blogs; Economy&Finance; Technology; Wars; Fun; Others

Let me know what you would find usable.

Posted by b on March 27, 2005 at 02:56 PM | Permalink | Comments (23)

Open Spring Equinox Thread

Happy Newroz, Purim, Easter, Nouruz, Shunbun no Hi  or your favorite spring equinox festivity.

We had fun on the beach with traditional Easter fires at the river Elbe in Hamburg.

Posted by b on March 27, 2005 at 05:49 AM | Permalink | Comments (63)

Billmon: Outside Agitators

"Steinbeck's message, I think, was that there are worse things than injustice, even when the stakes are very high. And one of them is fanaticism -- the kind of by-any-means-necessary mentality that's willing to grind ordinary human decency, and honesty, into the dust in the pursuit or some supposedly higher moral purpose."

Terry and Terri - Mac and Jim

Posted by b on March 27, 2005 at 04:53 AM | Permalink | Comments (2)

March 26, 2005

Billmon: 03/26

Lobbying for Halliburton: A Family Affair

Moral Relativism - indeed

Sanitation Measure - wash hands, its easter, Pilatus did so - any evidence ...

Posted by b on March 26, 2005 at 04:43 PM | Permalink | Comments (10)

Billmon: The Passion of Terri

"But it definitely fascinates me, much as the charismatic rituals of the evangelical churches -- talking in tongues, faith healing, snake handling -- have always fascinated me. These are symptoms of mental states I've personally never been able to attain without the use of powerful psychedelic drugs, and I've always been a little jealous of people who can get there for free, every Sunday, simply through the power of group suggestion."
"..the emotional intensity of the event -- and the depth of the self-righteous hatred it has stirred on the religious right -- will be hard to forget. It feels like we've passed another milestone in the descent of our deeply divided, culturally inflamed society towards . . . well, I'd rather not think about what."

The Passion of Terri

Posted by b on March 26, 2005 at 06:17 AM | Permalink | Comments (37)


More confirmation, if ever it was needed, on the "poodlehood" of Tony Blair, courtesy of this morning's Financial Times:

Blair kept quiet on Wolfowitz candidacy

Tony Blair was sounded out on the candidacy of Paul Wolfowitz to lead the World Bank before the White House announced his nomination but did not share the controversial proposal with cabinet colleagues or fellow European leaders.

The British prime minister was informed about Mr Wolfowitz's possible candidacy and relayed to Washington that he would not oppose him.

The issue was raised with Mr Blair when Condoleezza Rice, the US secretary of state, visited London last month, according to two senior US officials close to the proceedings. Mr Blair's discreet support gave President George W. Bush the confidence to know that Mr Wolfowitz, the deputy defence secretary and an advocate of the war in Iraq, would not face united opposition from the World Bank's European shareholders.

Blair does not care about Europe. Don't ever believe that myth. All he cares about is his personal access to the White House, and that dream that he can be the sole go-between between Europe and the USA.

But by honouring Mr Bush's wishes, Mr Blair chose to keep the candidacy from Gordon Brown, the UK chancellor, who is chairman of the International Monetary Fund's governing body and the European finance minister most closely identified with the development agenda.

Yep, he does not even care that this access be to the UK Prime Minister. No, it's just Tony Blair.

A Downing Street official said: "We had a number of discussions with a number of different countries over possible candidates over a period of time. Like others, we were first notified of the decision to nominate Paul Wolfowitz on the day of the president's announcement." Treasury officials declined to comment.

While the details of Ms Rice's private conversations with Mr Blair remain tightly held, officials and diplomats on both sides of the Atlantic have said they were aware of Mr Bush's effort to secure the support of his chief European ally. The UK Treasury, the British foreign office and officials in other European capitals remained in the dark, according to UK officials.

Following a report in the Financial Times on March 1 that Mr Wolfowitz was a leading candidate for the US nomination, a senior UK Treasury official telephoned his US counterpart.

The US Treasury dismissed the story, according to British officials. A British diplomat, who contacted the administration, was told Mr Wolfowitz was not in the running.

So this was intentional. This is an even bigger "fuck you" from Bush, and the story makes it explicit that Blair knew about the "fuck you" and endorsed it.

The World Bank presidential nomination is seen by Washington as a White House decision and it chose to garner support for Mr Bush's choice by contacting European leaders directly rather than lobbying finance ministries and development agencies.

Unlike Mr Blair, some European leaders were not given advance warning. Jacques Chirac, the French president, and Gerhard Schröder, the German chancellor, only spoke to Mr Bush after the announcement. But European leaders have made clear they will not stand in the way of the Wolfowitz candidacy.

Blair is a traitor. To Europe, which may not be so important, but to his country and his party. What a pathetic fool.

One of the biggest reasons why I hope that France votes "Yes" in the coming referendum on Europe is that a "No" would save Blair from actually having to make a stand on Europe, which he has never done. He has pretended to be pro-European, but has never behaved that way and has never argued the case to the British electorate.

Slimy fucker.

Posted by Jérôme à Paris on March 26, 2005 at 06:16 AM | Permalink | Comments (17)

March 25, 2005

Billmon: The Nice Guy


Posted by Jérôme à Paris on March 25, 2005 at 01:55 AM | Permalink | Comments (12)

Billmon: My Back Pages

My Back Pages

Since I reopened Whiskey Bar back in January, huge numbers of readers – well, OK, one or two – have asked me why I’m not “writing” anymore.

Go read the rest and reply here!

Posted by Jérôme à Paris on March 25, 2005 at 01:52 AM | Permalink | Comments (56)

March 24, 2005

U.S. May Veto UN Vote on Schiavo

BushUNITED NATIONS (RBN) - France is to put to a vote on Thursday a U.N. resolution referring the Schiavo case to the International Criminal Court, daring Washington to cast an embarrassing veto or accept a judgement by a court it opposes.

The U.S. Supreme Court on Thursday refused to order Terri Schiavo's feeding tube reinserted, rejecting a desperate appeal by her parents to keep their severely brain-damaged daughter alive. The U.N. Security Council has been deadlocked on where to refer the case to the ICC as a possible crime against humanity.

France's U.N. ambassador, Jean-Marc de la Sabliere, had introduced a draft resolution that would refer the Schiavo case to the ICC, the world's first permanent criminal court, as recommended by a U.N. panel of experts.

But the United States offered to create a new U.N.-Florida State tribunal in Miami that has drawn little support, with several council members arguing that only the ICC already has investigators on staff ready to begin work.

The Bush administration objects to this court, set up in The Hague to try war crimes, genocide and crimes against humanity. It fears U.S. citizens could face politically motivated prosecutions.

However, a U.S. veto could send a signal to the United States courts that legal officials and judges were safe from punishment in the Schiavo case, where arguments are escalating, thousands have demonstrated and millions of people have voiced religious concerns about the case.

Uncertain yet is whether nine Security Council members will vote in favor of the ICC, the minimum needed to adopt a resolution in the 15-member council. If there are not enough votes, the United States would be spared a veto.

The Bush administration, in the forefront of trying to get action on the Schiavo case, sought to break the deadlock on Tuesday by denying international relevance of the case and referring it back to Florida.

Posted by b on March 24, 2005 at 11:10 AM | Permalink | Comments (16)

Life Expectancy

The most recent life expectancy statistics for France has just been published (4 page pdf, in French), and within that document comes a nice visual of one of the most amazing "laws" of social sciences:


For the past 250 years, life expectancy has increased with amazing regularity (interrupted only by war) at a rate of one trimester per year.

(see also this graph, from this study by Oepen and Vaupel, discussed on the Maternal & Child Health blog)

An even more interesting graph is the following:


(the two lines are for women (above) and men)

It is interesting to note that until the 20th century, improved life expectancy was linked exclusively to better survival rates in the early years, whereas in the past century, the life expectancy in later years has significantly increased. Again, it is striking how close to a straight line these graphs are.

I have also read that this increasing life span has been accompanied by an increasing healthy life span, i.e. older people are, for the most part, in good health, and it is only in the last year of their lifes that their health becomes really bad. So it's not a question of (ab)using medecine to extend the life of severely ill or weakened patients: we live longer AND better.

The obvious question is - how long can that last?

I have no smart answer to that, and there are a lot of worrying tidbits floating around:

- no progress can be expected (in Western countries) on improving survival rates for children : the mortality is already pretty close to nil:


- cancers and other diseases associated to tobacco are only now beginning to strike women in large numbers. A sign of that impact is that life expectancy for women has increased by much less than for men in recent decades (you can find US statistics here (pdf))

- the biggest worry these days is linked to obesity, which has been growing at a rapid pace in most Western countries (and in some thrid world countries as well), with the US leading that sad race. Obesity is associated with a number of diseases and, as a recent study (mentioned in the above link) states, could be a cause of declining life expectancy, for the first time in almost 3 centuries.

In the meantime, enjoy this tidbit - every year, you are only 9 months closer to your death...

Posted by Jérôme à Paris on March 24, 2005 at 09:39 AM | Permalink | Comments (10)

March 23, 2005

Open One Again

News, views, whatever and a link to the forerunner

Posted by b on March 23, 2005 at 02:48 PM | Permalink | Comments (81)

Billmon: Ignorance of the Law ... +++

Tweedledee and Tweedledum

Killing prisoners: Eat Our Shorts, Dude

Christians? In the Name of the Son

Full Court Press

(I need to find a new form for Billmon posts. Any ideas? Please email them.)

Posted by b on March 23, 2005 at 02:44 PM | Permalink | Comments (3)

GM Bullshit

Gen manipulated corn is save. It is thoroughly tested. The controls are strict. There are self regulating elements in the industry that will not fail. The government strictly controls the gen companies and will inform the public immediately in case any irregularities occur.

You do believe this bullshit? Here is news:

US admits GM crop cock-up

A US biotech company has admitted that several hundred tonnes of non-approved GM corn produced from its seed have been sold over the past four years. The Bt10 seed was planted accidently instead of the Bt11 variety, and although developer Syngenta says that its admission of the error to US regulators last year confirms that monitoring procedures are effective, critics claim the opposite.
Since late 2004, the Environmental Protection Agency, the Food and Drug Administration and the US Department of Agriculture - the bodies jointly responsible for GM regulation - have been in talks with Syngenta as to how best to deal with the error, and "how and when information should be released to the public". Regarding said release, the US administration is reported to have taken a keen interest in the damage-limitation procedure.

That the White House is also involved comes as no surprise, given that the US and EU are enjoying an ongoing punch-up over GM crops. Bt11 was approved for importation into the EU in 1998, and the US hopes it will become one of the first GM crops for widespread cultivation across the Pond. Syngenta declined, however, to say whether Bt10 had inadvertantly landed on European shores, or indeed to list any countries to which it may have been exported.

This was no accident and this was a massive cover up, but aside from that, the problem is different.

For thousands of years farmers have saved some of their fruits to seed them the next year. They selected the best looking, the best tasting, the most profitable crops for this. To the GM-industry this is a problem as the can sell their product only once. So they make their seeds impotent. Thereby it is impossible for a farmer to uses the crops from their seeds to use these as seeds in the next planting period. They simply will not grow.

There is no necessity for this plant behavior. Gen manipulated crops may be useful to harden seeds, for example, against salt in the ground. We will probably need such crops to prevent future mass starvation, even if there are some negative issues with them.

But the impotence of the crop is an additional gene manipulated "feature" with the sole purpose of monopolizing the markets. It is not needed to add other desirable qualities to these plants. It is dangerous for the population if, for whatever reason, such seeds may not be available for a planting season. There will be no alternatives if only impotent crops have been grown.

There is resistance to such schemes. But this can be broken. Just conquer the worlds early bread chamber and change the laws for Plant Variety Protection. This wording is  of course pure newspeak as the law is forbidding the thousands of years old diverse selection process of the Iraqi farmers and mandating to buy from the GM monopolies.

Breaking laws in cooperation with the government and not to inform the growers and consumers about accidents is just another way to avoid resistance.

Posted by b on March 23, 2005 at 02:31 PM | Permalink | Comments (16)

Low Taxes and Growth Not Linked

Here's a strong argument to those that say that taxes are a drain on growth and must be cut: there is no correlation whatsoever between public spending levels and growth per capita, as this graph below shows


The economic performance of the US over the past 10 years is pretty much identical to that of sclerotic, socialist, rigid France, and significantly worse than that of socialist, statist Sweden and Finland, measured in statistically significant terms, i.e. growth per capita

Martin Wolf: Big spending doesn’t mean less growth (FT, 23 March)

The question [is whether high shares] of public spending in GDP prove economically harmful. Some think that no economy can tolerate taxes higher than those elsewhere if it is to sustain "competitiveness". Others talk as if public spending disappears into a black hole from which nothing of value emerges. Is there anything in these crude arguments? Not much, is the answer. Citizens of the rich countries deserve a more subtle debate. Start then with overall economic performance, particularly the growth in output per hour and GDP per head. The charts [see at the top of the post and below] show both between 1995 and 2004 against the share of general government spending in GDP in 2004. The share of government spending in GDP varies by a ratio of almost two to one, from Sweden on 58 per cent to Ireland on 34 per cent. There is a group of relatively low spenders: the English-speaking countries (except the UK), Switzerland, Japan and Spain. There is a group of extremely high spenders: Sweden, Denmark and France. What, then, do the charts show about the link between government spending and economic performance? There is none, is the answer.


Ireland's performance generates a small, but statistically insignificant, slope downwards to the right. But Ireland is an exceptional case. What is striking is the slow growth of GDP per head in low-spending Japan and Switzerland and the high growth in high-spending Finland and Sweden. The relatively poor performance of the US may surprise some readers. But remember that US GDP grows faster than those of European countries because its population of working age increased by 1.2 per cent a year, against 0.4 per cent in the European Union between 1994 and 2004. I would not wish to push such crude data too far. Measurement of GDP and so of productivity is increasingly hard to do as output becomes less material. It is particularly hard to measure the output of government services. Yet one overriding point does emerge: the mere fact of a rising ratio of public spending in GDP does not spell doom for the UK (or any other) economy. This is consistent, surprisingly enough, with an analysis from impeccably conservative US sources: the Heritage Foundation and The Wall Street Journal. In the 2005 Index of Economic Freedom, which measures, however roughly, the underpinnings of market economies, Luxembourg (ranked 3rd) and Denmark (8th) are above the US (10th), as is the UK (7th). Sweden (14th), Finland (15th), the Netherlands (17th), Germany (18th) and Austria (19th) all fall in the global top 20. What then of the idea that higher spending (and so taxes) must also spell a lack of global competitiveness? The short answer is that it is nonsense, for reasons elaborated in my book, Why Globalization Works (Yale University Press, 2004). The burden of higher taxation will be shifted on to owners of relatively immobile factors of production. Moreover, no link exists between the size of government spending and a lack of something one could reasonably define as "international competitiveness". What does indeed matter is the efficiency with which money is both raised and spent. But tax levels are only one of many determinants of economic performance. Far more important are: the quality of institutions, particularly of public administration and the judiciary; the security of property; the probity and public spiritedness of politicians; the soundness of money; the quality of education, health and infrastructure; and the extent of arbitrary regulation of economic activities. Monomania is usually a mistake. An exclusive focus on the tax burden is an example. What we must abandon is a debate that takes the form of "public sector bad, private sector good", or the other way round. It is particularly stupid when, as in the UK, the decision has already been made to pay for evidently high social priorities through the state. Health and education do not suddenly become far less important than holidays in Ibiza merely because they are financed through taxation. In making the decision on what to put into the public sector and how much to spend on it, we have to place substantial weight on underlying social and political values. But we must also ask, first, what we must do through the government (defence and law and order, for example); second, what we want,for reasons of social solidarity, to do through government (provision of basic incomes for all, of universal education and of basic health services, for instance); third, whether we wish to pay for services through general taxation or user fees; fourth, what is the least costly way of raising revenue; and, finally, whether we want services to be paid for and provided by government or merely paid for by government and provided by competitive private suppliers. These are the right questions. Labour's higher spending will not destroy the British economy, just as Finland's high spending has not destroyed Finland. What matters here, as elsewhere, is not what you do but the way that you do it. Sources for charts: OECD; The Conference Board

Martin Wolf is one of the most respected (and reality-based, to use a term you may be familiar with...) economics columnists around, which is why I copied most of his column here. Let me repeat again: The economic performance of the US over the past 10 years is pretty much identical to that of sclerotic, socialist, rigid France, and significantly worse than that of socialist, statist Sweden and Finland, measured in statistically significant terms, i.e. growth per capita Do not believe everything you read in the press about continental Europe. There are a number of problems, but we are not in terminal decline. Our economic model has its flaws, but being unsustainable or significantly weaker than the Anglo-Saxon one is not one of them. Taxes are not bad - it's a HARD FACT They are used to provide necessary services or socially useful goods which have positive macroeconomic effects. They are not just a drain on productive workers.

Posted by Jérôme à Paris on March 23, 2005 at 08:14 AM | Permalink | Comments (6)

Billmon: Hillary Rodham DeLay


Posted by b on March 23, 2005 at 03:28 AM | Permalink | Comments (5)

March 22, 2005

France to Vote EU Constitution (I)

An interesting series about the UK elections is currently underway over at dailyKos (provided by Welshman and Febble), and it has been suggested that I provide the same on the other important vote due to take place in Europe in the coming weeks: France's referendum on the EU Constitutional Treaty (or EU Constitution) on 29 May.

I'll use this post to make a brief description of the Constitution, how we got there, what will happen next, and what are the stakes in France. I intend to make a series of posts on the topic as the campaign unfolds, and this can be used to discuss various European issues.

Please bring in your input and your questions, I'll try to respond in the comments or in future installments.

First of all, there are many sites where you can find the full text of the EU Constitution and many detailed explanations, so if you want to have lots of information, you can go there:

Official site of the European Union on the Constitution, including the full text of the Treaty (pdf, 860 kb), links to the various institutions of the European Union, and some interesting Powerpoint presentations (pps, ca. 400kb);

The site of the UK Foreign Office on the topic, including their commentary of the treaty (scroll to bottom of that page);

The European Convention, the group that negotiated over two years the Treaty which was finally adopted by the Heads of Governments one year later, with small amendments;

The BBC Special on the topic, including a summary of its main terms and explanations on the various institutions and decision making mechanisms.

Two of these sites are European, and two British. There is an untractable problem when discussing Europe in English - the perception bias. As you hopefully know, the UK is the most Eurosceptic country in Europe, and this means that, as a general rule, commentary in English about Europe is more critical, distrustful and dismissive of Europe than the general European public is. Being French and strongly pro-European, I will of course strive to fight that perception bias with a bias of my own!

So here we go.

I will not go into a detailed history of the construction of Europe (you can find a British-slanted timeline here courtesy of the BBC), but the idea of the Constitution came about after the disastrous Treaty of Nice, in France in 1999, which then set the parameters for decision making once the enlargement to Central Europe would take place, and which is unanimously considered to be a terrible treaty, with complicated and impossible to explain rules, and very unwieldy voting procedures. The brain child of Chirac and Schroeder when they did not get along, it has come into force last year and will remain in force if the EU Constitution is not ratified.

Faced with that perspective, the European countries decided that it would make sense to try to simplify the rules of the EU, make them clearer to everybody, and hopefully improve the decision-making processes in an union of 25. Thus the European Convention, was born, regrouping representatives of the European Commission (the European executive body), the European Parliament, each national government and each national Parliament, 115 members in all, led by Valery Giscard d'Estaing, the former French President in the 1970s. They worked for 2 years to find a consensus, and it was almost mission impossible as there were so many conflicting requirements and wishes (more federalism, more subsidiarity, more powers to the Commission, more power to the member States, more social norms, etc...) and it is a significant achievement that they managed to produce something in the end.
This is important to note: this document is the result of negotiations between representatives of all countries (including the Central European countries which were not members at the time), where both euro-federalists and euro-skeptics were represented, nationalists and federalists, left and right; it was done in an open and transparent debate which was discussed in each country, and the result was a real pan-European consensus (and Giscard d'Estaing deserves a lot of credit for driving this massive debate to a successful conclusion)

The document was tweaked by the heads of States a little bit, but was kept essentially as prepared by the Convention; it was agreed on 18 June 2004 by the Heads of State and signed on 29 November 2004. (A first attempt to agree on the document failed in December 2003 because of a disagreement between Spain and Poland on one side, and most others, lead by Germany and France, on the other, about country weighting rules for majority votes. The change of leadership in Spain in March 2004 helped unblock this situation)

Its content can be summarised as follows:

- it consolidates all past European Treaties into one single, better written document
- it gives a legal personality to Europe
- it creates a President of the European Council and a Union Minister for Foreign Affairs
- it extends majority decision making (as opposed to unanimous) in the Council of Ministers to a number of new fields, including justice and home affairs, and provides for more co-decision powers to the European Parliament
- it puts in place new voting procedures (a system of double majority voting from November 2009: decisions will need support of 55% of countries, representing 65% of EU population)
- for the first time, it makes it explicit that Member States can leave the EU if they wish
- it incorporates the Charter of Fundamental Rights

It is a tidying exercise, with, as usual, a few more powers given to the European institutions here and there. The main changes are symbolic, through the creation of more visible representatives (the Union chief diplomat, and a more permanent President), through the name of "constitution" itself, and through the Charter of Fundamental Rights. It adds prerogatives to the European Institutions in what are eminently sensitive political issues, and while the substance is not all that different, it is widely seen as a new step towards the creation of a political Union, complete with executive (the Commission); legislative (the Council of Ministers and the European Parliament) and judicial (the European Court of Justice) powers.

As an aside here, Europe has always been a political project, and has always been seen as such in France and other "core" countries. It has been sold to the British public (and thus to the English-speaking world) as an economic endeavor, and that misunderstanding has been the source of many problems, as the British public smells the politics, is more reluctant to go there due to its specific history in Europe, but has Europe rammed down its throat for "economics" reasons which, of course, do not tell the full tale. In France, it is more the other way round: the population likes the political project part, but not so much the economics ("a vast laissez-faire anglo-saxon conspiracy")...

Now that the Constitutional Treaty has been agreed and signed, it must still be ratified by ALL Member States to come into force. Ratification can be done by a vote of Parliament (as Lithuania, Slovenia and Hungary have already done) or by a referendum (as done recently in Spain, and as will be done in France, UK, Netherlands, Denmark, Luxemburg, Ireland, Portugal, Poland and the Czech Republic - see the map in previous link).

So this gets us to the French referendum, which is due to take place on 29 May 2005.
Polls showed initially a strong margin in favor of the "Yes", but this margin has shrunk, and two recent polls have shown for the first time a small majority for the "No". The mainstream parties of both left and right are campaigning for the "Yes", but there are opponents on both sides, nationalists on the right (or "sovereignists"), and the hard left (Communist party and other assorted extreme left groups, as well as a significant minority within the socialist Party). A lot on issues unrelated to Europe are influencing this vote, and I will go into these in coming installments. The main topics of discussion are the following:

- the adhesion of Turkey, while formally totally unrelated, is very present in the debate;

- the Bolkenstein directive, liberalising services within the Union, has become a bogeyman in recent weeks (mainly because of the concept that service providers could do business in one country while respecting the laws of another Union country);

- the general unhappiness over unemployment, lack of revenue growth, and a general sense of social malaise;

- a desire to punish Chirac who appears out of touch, and a desire on the left not to give him a boost with a referendum victory (after having being forced to vote for him in 2002 against Le Pen);

- a perception on the left that the Constitution is too business-oriented and not "social" enough;

- jockeying on the right in the perspective of the 2007 presidential elections (and possibly before that of a change in the Prime Minister, the current one, Raffarin possibly to be fired after the referendum)

- a general feeling that France has lost its dominant place in Europe and that Europe is no longer exactly a tool of French influence and grandeur.

I'll stop here for today. don't hesitate to ask questions, I'll try to respond in comments or in future diaries. I hope that other European posters can contribute with their experience of the debate in their country

Posted by Jérôme à Paris on March 22, 2005 at 05:22 PM | Permalink | Comments (4)

General Motors Junk

As you may have heard, GM shocked the markets last week with its very weak earnings, and its shares dropped almost 12% in one day. What happened on the bond market was actually more interesting, and also more symptomatic of the current state of the world economy in general and the US economy in particular.

Today comes the news that GE Capital pulls $2bn GM credit facility (FT, 22 March). The short version: the smarter rats are leaving the sinking ship.

Below, some thoughts on:

  • the amazing power of rating agencies and how they misuse it
  • too much money in the markets and the "flight to garbage"
  • the backlash

Massive problems for the ungainly giants (FT, 22 March)
(btw this article is a very interesting take on "big business is beautiful" which I recommend)
Fortune favours the large, and consolidation among leading companies is inevitable. There is no more firmly held belief in popular thinking about business. In banking and pharmaceuticals, in oil and insurance broking, in the motor industry and telephony, the future is said to lie with a small number of large global players. Chief executives across industry have followed the maxim of Jack Welch, the former General Electric boss, that unless you are number one or two in your industry, you are dead.

There used to be a phrase for it - the aspiration "to be the General Motors of this industry". Not any more. Last week, GM forecast another set of disappointing results: the latest in a 30-year history of disappointing results. The ratings agencies threaten to call its securities junk.

You have probably heard more about the drop in share prices than about that last item. For market commentators, the big news is that they are actually talking about downgrading GM. Standard & Poor's, the biggest rating agency, put GM on "negative watch", which means that they expect their next rating evaluation to go down, in that case from the lowest rung of "investment grade" to the highest of the "speculative" (or "junk") ratings. Such a rating has been seen as long overdue by many commentators (see box below), but resisted by GM (as it would increase its cost of funding) and by the market more generally (having the biggest debtor of the market downgraded would trigger massive reallocation of portfolios, with many unpredictable consequences, as many portfolio managers are not allowed, either by federal regulations, or by their own internal rules, to hold "speculative" rated paper). Markets are finally coming to terms with reality. GM's debts are increasingly unsustainable.

An inch from junk (FT, 18 March)
General Motors is teetering on the brink of a downgrade to junk bond status. This week's profits warning could push it over the edge. GM could survive a ratings downgrade. But the loss of investment grade status could force it to change the way it organises and funds its business. The impact is unlikely to be confined to GM itself. If the company is downgraded, the shock waves could rock the entire corporate bond market. GM has $300bn (£156bn) debt, of which only one-third is secured asset-backed debt. The jury is still out on whether the corporate bond market can smoothly swallow an issuer of this size.

Rating agencies have an amazing power because so many fund managers rely (blindly sometimes, it would appear) on these ratings for their investment decisions, although such ratings are made by private entities, paid by the issuers of the debt, and are not regulated in any way. This creates herd-like movements on markets, it generates unhealthy conflicts of interest (a rating downgrade is always bad news for a borrower, as it increases the interest rate applicable to its debt, and yet the borrower is the client of the rating agency, not the fund managers). When the rating has a macro-economic effect because it applies to hundreds of billions of dollars (which happens for a few countries and a smaller number of corporate borrowers), the management of such issues becomes, quite frankly, tricky, as it can be argued that these ratings influence economic policy and thus become heavily politicised.

This has happened in a context where interest rates have been very low for a long time, with the world awash in liquidity (and investors desperate to find good returns - thus investing in increasingly risky paper), but the trend is now towards a tightening of such interest rates, with the Fed widely expected to increase its rates by another 0.25% this afternoon, and there is a growing risk that the riskiest investments / the weakest borrowers are going to suffer and possibly bring their creditors with them. High tides lift all boats; we are now in the phase when the sea is going out and we will see who is really in good financial shape as oppsoed to being propped up by cheap money.

GM, oil and the turn of the monetary tide (John Plender, FT 21 March)
The combination of rising US government bond yields, a strong oil price and the threat that credit rating agencies would downgrade General Motors to junk bond status prompted a sudden loss of risk appetite. Or, in the inelegant phrase occasionally favoured by this column, the flight to garbage went into reverse. Emerging markets, with the exception of those in Asia, took the brunt of an otherwise indiscriminate selling wave. Is this the turning point in a credit cycle marked by a manic hunt for yield?

I believe that there may well be a turning point this year and it could be traumatic. But I am not yet convinced that this is it. Monetary conditions in the US, even after the Federal Reserve's interest rate increases since last June, are loose despite the policy of "measured" tightening. A world glutted with excess savings is still awash with liquidity. While the rise in US Treasury yields has done its bit to tighten financial conditions, the bond market has not yet exercised its right to be seriously unmeasured. That suggests that, while carry traders who borrow at low rates to invest in higher yielding assets will have a less comfortable life and riskier assets may be more prone to sporadic panicky evacuations, this may not be enough to spring a systemic shock.

Could General Motors change this plot line? Since I castigated the credit rating agencies last year for failing to downgrade GM's debt to junk, they have woken up. GM paper will soon be downgraded. Such a huge addition to the junk market will cause ructions, with many smaller borrowers being crowded out. Yet the move has been so well-signalled that many market participants will surely have hedged against that eventuality. What could turn this into a trauma would be if it coincided with other shocks such as volatile behaviour by the currency or bond markets. That would encourage over-borrowed traders to engage in the time-honoured dash for the same side of the boat.

Even without a systemic shock, the turning of the credit tide will leave many participants exposed, among them some banks that made pricey acquisitions or heavy investments in branches when interest rates were at historic lows. Nor should we forget that the hefty proprietary trading profit revealed by the big US investment banks last week are largely the product of a freakish cycle in which US monetary policy has granted an astonishingly generous gift to all in the financial community. The laws of financial gravity will not be suspended indefinitely.

The real problem of GM is that it is not making money from selling cars. It has essentially become a huge consumer-credit company / pension fund with an attached manufacturing operation: it makes all of its money from lending money to consumers buying their cars, and it has, in parallel, massive pension liabilities (it has 2.5 pensioners per worker currently, and that ratio is set to worsen yet). In all logic, its management is more focused on financial issues than on manufacturing, and this shows, in terms of market share, profitability and other similar industrial criteria.

(Go read this fascinating account comparing GM to Harley-Davidson, whose market value has just overtaken that of GM, and who has been more successful in regenrating its manufacturing business by focusing on its brand: GM faces life in the slow lane as Harley roars past (FT, 21 March))

In any case, as the initial GE story shows, and as this additional story (Investors bet on GM downgrade chances (FT, 22 March)) shows, the market is beginning to price the GM risk as pretty close to "junk" already, thus underlining both the weakness of the company and increasing wariness of the rating system in current conditions.

There is so much money flying around that the macro-economic effects of changing investment patterns will be both massive and unpredictable, with likely episodes of strong volatility. The smarter investors see the dangers ahead, but worry that their movements (when they are significant players) will trigger the crisis they are trying to avoid. The fact that everybody focuses on the financial side of business means that less attention is given to the underlying manufacturing or service part of the company which makes the crisis in such activities get steadily worse, and weakens the base on which the financial games are played (I am not criticising these games per se, they do bring value, as I am paid to know... but it is a question of balance, as in everything). Equilibrium becomes increasingly hard to maintain, until....

There are so many warning signs:

  • currency movements
  • tensions on the oil market
  • all the risks associated with increasing interest rates
  • the US-China trade unbalance, and all risks of trade wars

All are linked to cheap money and reckless federal spending, feeding a consumer boom based on virtual real estate and other financial asset price increases, hoovering in imports from all of Asia, paid in federal IOUs, fuelling the growth boom of China and others which in turn creates all the current tensions on the commodity markets.

It is all unsustainable, and GM is only the biggest and weakest collateral damage, but it is a sign of things to come.

Posted by Jérôme à Paris on March 22, 2005 at 09:21 AM | Permalink | Comments (45)

March 21, 2005

Billmon: The Burning of Florida +++

A plague of locusts


An Answer to an Orwellian Rightist


A Slow Learner in the Pentagon


Names and Faces

Posted by b on March 21, 2005 at 03:07 PM | Permalink | Comments (35)

Molybdenum and Whale Oil

What happens when there is a supply-demand imbalance in a market with very low demand inelasticity, like oil?

In other words, how high should the price of oil rise to cause a drop in demand sufficient to clear the market in a situation where supply is contrained by physical and/or political factors?

The case of molybdenum, a metal which also displays low demand inelasticity, offers an interesting insight:


Prices multiplied by 10 or more is what is required...

(Thanks to mobjectivist, via Pedro in the comments)

Whale Oil is another interesting precedent for price predictions.


Molybdenum is a metal which is used in steel production. Since 2002 supply demand balance swung to the demand side. The demand has outgrown the supply.

This deficit has had some very interesting consequences for the price. over the past three years the price of molybdenumoxide has increased from $2 to $28.50, a fourteenfold increase . Since the speculative position on this market is relatively small we can assume that these prices reflect the real supply demand fundamentals. It is staggering to see how a relatively small supply shortage can lead to these enormous price increases. It really shows how inelastic these markets are.

I think the steel market and the oil market are fairly comparable when it comes to inelasticity. If so then this is what we can expect for oil when the market runs into a deficit. The price increases we have seen so far are nothing compared to what is going to happen.

If moly is of any guidance we can expect the price to suddenly double, triple or quadruple when a real shortage occurs. That is a pretty scary thought.

As I have argued in several previous posts, we are indeed entering a situation in the oil market where we have a serious risk that there will not be enough supply to satisfy all potential demand:

- demand keeps on increasing (and shows how inelastic it is: since 1999, prices have already been multiplied by 5, and yet demand has increased in every single year, and by record volumes in the past 2 years);

- additional supplies are becoming increasingly scarce, as mature fields see their production decline and not enough investments are made to develop new fields. (Note that I do not personally think this is due to peak oil - this is in my view due to lack of investment - the oil majors would invest but have no access to most of the reserves in closed countries, and these countries seem more intent to spend their oil bonanza than invest in new capacity). OPEC has slowly put in production its existing spare capacity and has nothing left now.

The recent reaction of the markets to the recent quota increase by OPEC shows that the traders believes the same: the increased production does not bring the price down because it is taken from the last cushion of available, and will not be sufficient if demand increases a tad more or if there is a disruption to production anywhere (weather event, strike, accident, terrorist attack, political decision by any producer to withhold production...)

We are living on our last emergency batteries currently (until more investment is made to develop untapped reserves, but that will require a few years). Prices have been multiplied by 5 since 1999, to no obvious effect; if we take the example of molybdenum, if will require another tripling of prices to have any effect; but if we consider that oil prices were in the 15-20$ range in the 90s, it will require another 5-fold increase (and we have no real way to know how relevant the example of molybdenum is - after all its consumers are industrial users that are mostly rational, not citizens with a "God-given" right to drive and travel...).

For once, I won't leave you on this gloomy note but will point you to another interesting historical precedent for oil : that of whale oil, the only commodity to have gone through a full Hubbert's peak cycle:

The "bell-shaped" production curve of a non-recyclable mineral resource was described first by M. King Hubbert in 1956, and was used to correctly predict that the production of crude oil in the United States (Lower-48) would peak in 1970. It is reasonable to suppose that the worldwide production of crude oil will also follow a similar bell-curve, with much of the present debate focusing on when the peak will occur. It is anticipated that it will generate an epochal change deriving from a steep rise in prices.

The rise in prices at the peak is expected because of the switch from a market driven by production to one driven by supply. The Hubbert model, however, does not itself provide quantitative information on prices, and it is not possile to draw conclusions from individual country peaks because oil prices are set globally.

In order to obtain historical evidence for price trends, one needs to examine a case where a non-recyclable resource went through a complete Hubbert cycle worldwide. There are no previous examples of a mineral resource that has done so. In fact, crude oil may turn out to be the first, which incidentally may be one of the reasons why the concept of "peak oil" is so difficult for many people to grasp.

A resource does not need to be a mineral one to show a Hubbert curve. A biological resource which is produced (or "extracted") much faster than it is replaced may also follow a bell-curve. Historically, there have been several cases of terminally depleted biological resources. The whaling industry of the 19th Century is a good example, as already noted by Coleman (Non Renewable Resources, Oxford University Press, 4(1995) 273).



From the figure [above], it is evident that the production of whale oil followed a bell-curve according to Hubbert's theory, modelled with a simple Gaussian curve, albeit showing strong oscillations. These data are in excellent agreement with the report on Right Whale abundance by Baker and Clapham (Trends in Ecology and Evolution Vol.19 No.7 July 2004), indicating that the fall in production after the peak was caused by depletion and not by the switching to different fuels.


we can derive insight into crude oil price trends from the figure. Whale oil prices started to increase approximately at the inflection point of the curve well and before the production peak. An upward spike in prices took place a few years after the peak, being also detectable in the non-inflation corrected price data  (see Coleman, ibid.).

There are good news:

A somewhat surprising result is that the inflation corrected prices remained approximately constant after the peak despite the progressive depletion of whales.

But this may not be the most important:

If, as often claimed, we are close to the peak, and if the analogy with oil production holds, we may expect a further sharp increase in prices in the coming years, a trend that may, actually, have already started in 1999.


The concept of the terminal depletion of a mineral resource is alien to us, since there have been no worldwide precedents. In addition, we are apparently just near the midpoint on the production curve, so we still have to experience the peak, the associated price rise, and the decline.

Put simply: the uncertainty is so great, and the impact likely to be so big on our economies (if only from the wild oscillations of the price) that it is criminal not to plan for this, and not to be actively seeking alternatives.

Terri Schiavo is not the only one to be Brain-Dead.

Posted by Jérôme à Paris on March 21, 2005 at 08:22 AM | Permalink | Comments (32)

Ghost Rodeo

by anna missed, 35" x 28" douglas fir slab, (detail, compressed)
full, resized, compressed (45 KByte)
full, original size, uncompressed (1,500 KByte)

Posted by b on March 21, 2005 at 08:04 AM | Permalink | Comments (39)

March 20, 2005

Billmon: 03/20

Pure Science may be tolerated, may be.

Seperated at Birth? may be yes, may be.

Infectious Disease in Texas and Florida.

(Note to MoA readers: I have a bad, bad cold and lost my physical voice for now. This somehow also blocks my virtual voice here even though there is much to say. If you have a piece for the community, please send it to me and it will be posted. b.)

Posted by b on March 20, 2005 at 04:07 PM | Permalink | Comments (29)

Open Thread 05-29

Two years of war on Iraq and other tales ...

Posted by b on March 20, 2005 at 03:42 AM | Permalink | Comments (38)

March 19, 2005

Billmon: Strategy of the Weak - plus plus

Dangerous folks


All Patients on Life Support Are Equal Some Are Less Equal Than Others


Brain Dead by Billmon

Posted by b on March 19, 2005 at 05:46 AM | Permalink | Comments (21)

Brain Dead

What does it say about the brain activity on the hill, when the U.S. Congress needs to subpoenae a brain-dead women and demands her appearance at a hearing?

Not a good joke, I know, but serious: Do people have a right to die?

Posted by b on March 19, 2005 at 04:00 AM | Permalink | Comments (29)

March 18, 2005

Billmon: 02/18

Cover Up Accomplished: In the Clear

Posted by b on March 18, 2005 at 03:00 PM | Permalink | Comments (5)

There Is No A Plan

But [Bush] expressed astonishment that people constantly refer to "Bush's plan": "I haven't laid out a plan," he said. "I've laid out some ideas that I think ought to be considered for a plan, and that's what's important for people to know."
Bush Won't Budge on Private Accounts about a March 15, 2005 briefing


THE PRESIDENT: I have not laid out a plan yet, intentionally. I have laid out principles, I've talked about putting all options on the table, because I fully understand the administration must work with the Congress to permanently solve Social Security.
President's Press Conference March 16, 2005

via WaPo: White House Briefing

Posted by b on March 18, 2005 at 02:11 PM | Permalink | Comments (3)

Billmon: Triumph of the Wolfowitz

Caspian Follies...

(This beats The Onion!)

Posted by Jérôme à Paris on March 18, 2005 at 12:44 AM | Permalink | Comments (36)

March 17, 2005

Billmon: Scenes From the Cultural Revolution

Which one?

"If the system were fair," says Larry Mumper, sponsor of the Ohio bill, "Rush Limbaugh and Sean Hannity would be tenured professors somewhere."

Posted by b on March 17, 2005 at 06:40 AM | Permalink | Comments (46)

Peak Open Thread

Will we be running out soon?
What with Deanander's reckless consumption of Open Threads, and blatant desire for more, will we have enough?

Posted by Jérôme à Paris on March 17, 2005 at 02:24 AM | Permalink | Comments (67)

March 16, 2005

Oil Prices - Who's Worried - or Not.


the world has been consuming oil faster than discovering it since 1986. (IHS Consulting)

[It is] "no longer tenable" to continue placing environmental issues, including climate change, "in a category separate from the economy and from economic policy" (Gordon Brown, UK Chancellor of the Exchequer - i.e. Finance Minister)

"The economy might be too strong in terms of demand growth. The question is whether the market is underestimating how much work the Federal Reserve is going to have to do" M. Mussa, IIE.

World's growing energy thirst adds to problem caused by falling output

The Cantarell oilfield, in the shallow waters of the Campeche Bay, is regarded by Mexicans as their crown jewel. It is the second-largest oil field in the world by production,pumping 2.2m b/d, the same amount as all the Kuwaiti fields together. For that reason, Mexicans were recently dismayed when Petróleos Mexicanos, the state oil company, said that the field's production would decline this year, signalling a trend towards its depletion. Cantarell's difficulties are not unique.

Other mature oil provinces outside the Organisation of the Petroleum Exporting Countries, such as the North Sea or Alaska, are now suffering huge yearly declines, constraining the world's supply of oil and helping to push up the prices.

Last year's surge in oil prices was propelled by the biggest yearly increase in demand since 1976. But analysts say today's high prices are the result of strong demand and a significant slowdown in oil supply growth from non-Opec countries. Barclays Capital estimates that non-Opec supply outside the former Soviet Union rose by 700,000 yearly between 1990 and 2000. But since then the growth had been roughly flat every year. T

his slower increase in non-Opec supply is boosting demand for the cartel's oil, reducing Opec's already low spare capacity. The market takes the reduction of this cushion against unexpected shocks as a bullish signal, sending the prices higher. "We got a lot of new capacity additions, but the problem is when you net those with the declines in mature regions, you got a flat line," said Paul Horsnell, of Barclays Capital. Among the new projects are several deep water platforms in Brazil, the BTC pipeline project in Azerbaijan, the Thunderhorse field in the Gulf of Mexico and the huge Kizomba field in Angola.

The International Energy Agency, the industrial countries energy watchdog, forecast non-Opec supply will growth this year by 900,000 b/d, but Russia and other former Soviet Union countries would account for about 60 per cent of the increase. Production in Europe, Asia and North America will decline, with significant increases only in West Africa, Brazil and Ecuador. Even non-Opec countries in the Middle East, such as Oman, Syria and Yemen, would see production declining by nearly 100,000 b/d.

At the same time, world oil demand would jump by 1.8m b/d, increasing the dependence on Opec oil for the third year in a row.

Analysts said the trend would continue because oil companies were not investing enough and also lacked the opportunity to drill in promising regions such as Mexico whose constitution barred foreign oil companies.

Lehman Brothers and Citigroup, the investment banks, forecast an increase in worldwide exploration budgets of less than 6 per cent for 2005, a significant slowdown from last year's 12 per cent. "With increasingly depleted reserve bases, non-Opec declines are only expected to gather steam in the years to come," Washington-based PFC Energy said in a report.

IHS Energy, a leading consultancy advising oil majors on upstream operations, estimates that the world has been consuming oil faster than discovering it since 1986.

In addition, new discoveries are more expensive than in the early 1990s, as a large proportion of oil fields are found in deep waters, rather than onshore or the shallow continental shelf. In 2003, about 70 per cent of the largest oil discoveries were in deep waters, with a large proportion of that in waters more than 1,000 meters deep. A decade before, only 16 per cent were in deep waters.

With specific reference to non-Opec countries, the IEA has warned that "a rising share of production will have to come from smaller oilfields, where the unit costs are higher". For this reason, the marginal cost of production in mature basins in non-Opec countries is rising. "This may well deter investment and capacity additions in the long term," the IEA warned in its latest outlook for the oil market.


Central bankers are not worried yet:

Why the rise in oil prices does not yet threaten crisis

In contrast to the experience of the 1970s, the impact of $50 a barrel oil on global growth and inflation has been fairly limited. The rise in the oil price last year did damp growth but the expansion remains fairly healthy. While headline inflation rose last year, core inflationary pressures and, crucially, inflation expectations remain contained. Financial markets do not seem concerned that energy prices will spark higher inflation.


According to a draft of the IMF's forthcoming World Economic Outlook, the fund forecasts healthy world growth of about 4.3 per cent in 2005 and 2006. The slowdown from last year's 5.1 per cent rate is explained partly by the impact of the oil price but also reflects a maturing of the global economic expansion. Separately, the IMF has "stress tested" its forecasts by assuming an oil price rise to $80 a barrel this year, falling to $50 in 2006 and then drifting to the $34 range in 2009. The conclusion is that even a rise to $80 would not be disastrous for global growth.


This fairly sanguine IMF view of the impact on the world's biggest economies rests on the assumption that central banks would act to prevent a rise in inflation expectations. Central bankers' credibility was built up by the eventual defeat of the inflation unleashed in the 1970s and by the subsequent maintenance of low inflation.


Public confidence that inflation is not about to take off makes the effects of oil price rises far less painful. While price rises have reduced profits for businesses and squeezed household budgets, there appears to have been little impact on inflation expectations and hence on wage demands. A desire to maintain hard-won credibility means that the Federal Reserve and the European Central Bank will watch closely for any rise in inflation expectations - not so much in the "headline" inflation numbers, which show the direct effect of oil price rises, but in the indirect "second-round" effects on prices and wages.


Michael Mussa, a fellow at the Institute for International Economics in Washington, says it is still surprising that the high oil price had so little impact on growth last year. In the US, he says, the fact that long-term interest rates remained low - even as the Fed tightened monetary policy - continued to stimulate the housing market and consumer spending. "The main concern is not that the US slows down too much in 2005 but that it does not slow down enough, particularly domestic demand growth," Mr Mussa says.


"The economy might be too strong in terms of demand growth. The question is whether the market is underestimating how much work the Federal Reserve is going to have to do," Mr Mussa says.

So expect more pressure on wages and posturing on the international stage to get OPEC to increase production, and then, as this is unsufficient, an abrupt increase in interest rates which will surprise the markets (thus causing them to fall) in addition to making debt a lot more expensive.

Meanwhile, some countries are reacting:

High oil price drives users to other fuels

As the US was putting pressure on Opec ministers to damp oil prices, other leading consumers of energy were yesterday talking about adjusting to a new reality of higher prices.

China, the world's second largest consumer of oil after the US, yesterday said high oil prices and threats to the climate from fossil fuels were forcing it to become the world's biggest producer of nuclear power.

Gordon Brown, UK finance minister, urged his counterparts from 20 developed and developing countries to incorporate environmental concerns into economic policymaking. "Higher energy prices are requiring industry and commerce to examine the cost and efficiency of energy use," Mr Brown told a London conference of finance, environment and energy ministers.

"In terms of policy, these challenges all point now in the same direction towards a reduction in the carbon intensity of energy production and greater efficiency in its use."


Liu Jiang, vice chairman of the national development and reform commission of China, also urged western countries to give Chinese industry access to renewable energy technologies.

He said Beijing, as well as experimenting with advanced pebble-bed technology, hoped to "achieve self-reliance on nuclear power" by introducing advanced 1,000MW press-urised water reactor nuclear technology. "Nuclear power belongs to clean energy and nuclear power construction also serves the purpose of achieving a low-carbon economy," Mr Liu said.

He called on developed countries to manufacture renewable energy equipment - such as solar cells and wind turbines - in China.


Mr Brown said that after "the twin objectives of high and stable levels of growth and employment", there was a "third objective on which our economies must be built, and that is environmental care".

He said it was "no longer tenable" to continue placing environmental issues, including climate change, "in a category separate from the economy and from economic policy".

"Across a range of environmental issues . . . it is clear now not just that economic activity is their cause, but that these problems in themselves threaten future economic activity and growth," he said. Mr Brown said measures to tackle climate change, such as energy efficiency and low-carbon technologies, could stimulate innovation and improve economic productivity, rather than imposing an economic cost.

Posted by Jérôme à Paris on March 16, 2005 at 06:04 AM | Permalink | Comments (51)

Billmon: 03/16

David Horowitz's (Losing) Battle With the Truth
After reading Billmon I´d say he lost that battle a long time ago.

Forgive and Forget

Posted by b on March 16, 2005 at 04:27 AM | Permalink | Comments (5)

March 15, 2005

'Pursuit' not the Best Way to Happiness


I quote the Financial Times a lot. That's because (i) that's what I actually read, (ii) they have some really good articles, and (iii) it's a paper that not too many of you read here. Oh and (iv) I enjoy reading it. It's what I do when I get to work, just before going to get my coffee. It's actually a nice way to start the day... Actually, I also have to connect my computer to the bank's servers, which is pretty slow. I am usually going through page 2 (European News) when I finally have access to internet and click on dailyKos and Moon of Alabama. I then go back and forth between the three...

Anyway, this is just to introduce you to tomorrow's FT column on Happiness. (Yeah, I cheat - many articles are available online the previous evening already. That's enjoyable too - the feeling of being there before all others).

Here goes...

I liked the sentence that I used as the title to that diary, and I thought I'd share this article which fits with the 'zeitgeist' here on MoA; I am especially happy to report that what I read in the Financial Times (the - smarter - European answer to the Wall Street Journal) and what I read here on MoA are rarely incompatible, which should tell you something about the other side...

John Kay: Winners and losers in happiness stakes (behind subscription wall)

[A] fascinating new book* by Richard Layard, the British economist, argues that we should make happiness, not growth, the object of our economic policies. At first sight, there is not a lot of difference - the countries with the highest productivity are also the happiest. But on closer inspection, there are interesting differences.

People in rich countries are generally happier than people in poor countries. But once basic needs for food, clothing and shelter are more or less universally met - higher gross domestic product does not seem to make societies happier. All affluent countries are rather happy. Within this group, the Danes and the Dutch are at the top and the French and Italians at the bottom but the differences are not large. A generous welfare system does not seem to fulfil either the fears of the right or the hopes of the left. The best assessment is that welfare adds happiness if, but only if, most people believe the system is fair.


People who say that video recorders are more important than fair trials and free speech are just wrong. Still, richer countries tend to be happier and, within a country, richer people tend to be happier. Since people care a lot about their relative income, equality adds to happiness. But in a subtle way: we compare ourselves to people like us, we envy the neighbours rather than Bill Gates. Nothing seems so corrosive of social welfare as the sense that people in similar circumstances are freeloading at work or on benefit. Fairness, trust and the strength of social bonds make us happier. They also do a lot to make us richer.

That is why the notion that greed is good is doubly flawed - perhaps trebly so, because you do not become happy by taking out more than you put in. Almost every survey shows that stable relationships and fulfilling jobs are the most important contributors of personal happiness.

This evidence points to policies appropriate for a society that aims to promote the happiness of its citizens. Such policies are family friendly, and provide generous benefits to the unemployed. Decent employment is available to anyone who wants a job but people who are fit to work must accept that this is a condition of benefit. The happy country maintains social homogeneity and institutionalises trust between citizens.

Again, these messages should not surprise many here. The interesting thing is that they come in a serious business publication and are based on the work of a renowned mainstream economist (whose book you can find here: Happiness: Lessons from a New Science (if you don't mind Amazon), and an earlier summary of whose ideas on the topic can be found here (in html) or here (in pdf) from where the graphs on this post have been taken).

You may remember the story about child care ranking far behind watching TV among enjoyable activities. Well that table here shows where that came from...



Posted by Jérôme à Paris on March 15, 2005 at 05:28 PM | Permalink | Comments (15)

Thread Open

News, views, opinions ...

and a link to the forerunner.

Posted by b on March 15, 2005 at 05:49 AM | Permalink | Comments (98)

40 Years of Chirac. Pauvre France!

Well, to be precise, he was first elected to a public function 40 years ago (in the municipal council of the small village of Sainte-Ferreole in central France).

He was a cabinet member for the first time under de Gaulle in 1967, and Prime Minister (i.e. really in power) for the first time in 1974, more than 30 years ago.

He has been a canditate for the presidency all his life, and, mostly accidentally, President for the last 10 years. People under 50 in France have never voted in a presidential election when he was not a candidate.

And now, in yet another negative consequence of your elections, he is still seen as a possible candidate for re-election in 2007, thanks to his international prestige as the leader of the Coalition of the UN-Willing.

Thank you, Mr Bush.

As I wrote almost a year ago when I was contemplating our sad situation (edited for today's post):

France has the sad privilege to be one of the last countries in the world to be ruled by a "dinosaur", i.e. a political leader which rose to power in the early part of the second half of last century and has not left that place since. Amongst the sad specimens of that race, one can include Fidel Castro, Muhammar Khadafi or - until late last year - Yassir Arafat. Jacques Chirac, who was a Cabinet member for the first time in 1967 under de Gaulle, can rightfully claim to be a full member of that select club whose main (and only) competence is to grab power and keep it, on the back of the general populace.

To be fair to Chirac, he has been consistently - and mostly fairly - elected and reelected in his various posts, and the French thus bear a heavy responsibility for his continued presence in power. The man is clearly a gifted campaigner, able to run campaigns well suited to the mood of the day (as a Thatcherite in 1986, as a social populist in 1995, on a law and order platform in 2002) and able to make the French people forget that he has been utterly ineffective each time he has actually been in power - and that he has each time been voted out two years later (1976-78, 1986-88, 1995-97, 2002-04*).

How to explain this apparently irrational love of the French for such a manifestly incompetent politician - whom a majority agree should be in jail? The mediocrity of the alternatives? Nostalgia for a long-lost (and presumably glorious) past? Pity for a man who made it clear that he would not give up until he reached the supreme job? The feeling that it is not so important? Or the peculiarly French trait to stick it up to others (including other Frenchmen)?

Maybe we should at least care to make sure that we are not the last country with a dinosaur...

* in March 2004, the right was routed in local elections; this reflected the population's annoyance with Chirac and his government, led by Raffarin. As the right still controls the majority in Parliament (in principle until 2007), he stays in power, but his legitimacy has been severely weakened.

Yesterday's Guardian had a good article on this phenomenon, which, for a British article about France, was almost - almost! - fair...

Milestone for the president who mirrors his people
First and foremost, Chirac is an energy," said the writer and broadcaster Bertrand Delais, author of the first of a plethora of commentaries due out this anniversary year. "That's what's kept him going - an extraordinary energy in the service of a boundless ambition."

He works hard at his popularity. In the early days, he kept a bucket of iced water in the back of his car to plunge his aching fingers into after every campaign stop. "In this country, everyone has either shaken Chirac's hand or knows someone who has," says a current cabinet minister.

But for many observers, the real secret of his success is that the French see themselves in him. He is " un bon gars "; a good bloke, down-to-earth, no snob. Like them (certainly like their rugby team), he is not beaten even when he's down, never stronger than when he is up against it.

"He can reinvent himself and come back from the worst of whitewashes," says one pollster, Antoine Chaballier. "He just has to win one more time."

Also like the French, Mr Chirac appears to be a bit dodgy: if his voters fiddle their tax returns and fail to pay their parking tickets, their leader has been accused of indulging in jobs for the boys, electoral list-padding, illicit party fund raising schemes and luxury foreign holidays paid for in cash. The French like to feel they've got away with something naughty; Mr Chirac's many corruption scandals have not harmed him in the slightest.

That's not exactly true. He was really hurt in 2001 when a lot of the nastier stuff came out. He was saved by the change of attention brought by 9/11 and his own presidential campaign which focused relentlessly and in a nasty way on insecurity and fear - he has nothing to learn from Bush and Ridge in that respect. - JaP

"Chirac is like us" (...) "De Gaulle was our father, Mitterrand made us dream, Giscard was an economics professor. Chirac is the cousin who has made good. His talent is feeling what concerns us, intuiting the demand of the moment. He doesn't have convictions, or if he does, they're not political ones - he has sentiments."

There are, of course, some constants, and they are to his credit. Mr Chirac, despite temptation, has never had any serious truck with the far right. He has always fought anti-semitism, and was the first French head of state to publicly recognise, in 1995, the responsibility of Vichy France in the Holocaust.

His wife, Bernadette, calls him "the St Bernard". Pompidou called him "the Bulldozer". Others have dubbed him "the Weathervane", even "Superliar". For his political victims, he is "the Killer". But whatever they know him as, there is now, after 40 years, a kind of compassion between the French and their head of state.

Is that enough? De Gaulle created postwar France; Pompidou modernised its industry; Giscard legalised abortion; Mitterrand abolished the death penalty, built monuments, reformed French capitalism, generally dragged the nation into the 20th century. And Mr Chirac?

"The president of proximity is not the president for posterity," says Mr Barbier. In 40 years in politics, he has left no permanent mark on France, done nothing about unemployment or undertaken any major reform beyond, perhaps, abolishing military service.

"He has, basically, done nothing," Mr Delais said. "But that's because he believes in nothing - except, perhaps, in the way we live in this country."

That's a nasty indictment, but sadly true. Chirac has never been interested in running the country, he just loves the campaigning and political fighting that goes with it. I think he was happy to be forced to share power for so long during in first term, in 1997-2002, when Jospin, the Socialist leader, was Prime Minister and held the effective executive power thanks to the socialist majority in Parliament. He had little responsibility, and could spend his time "presiding" (strutting on the world stage, meeting the French in all sorts of public events) and quietly undermining Jospin government at every turn, creating tensions in his Socialist-Communists-Greens "plural left" coalition whenever he could.

He has been unbelievably lucky most of his political life. In 1995, he was elected because people somehow felt that it was "his turn", after having wanted the job so badly for so long, and with no obvious alternative (the left was still reeling from the last, corrupt years of Mitterrand and the blame attached to the nasty recession of 1993). In 2002, despite having done nothing in 7 years, having presided over the disastrous Nice European Summit and generally undermined French influence in Brussels by his single-minded and despicable defense of French farmers (his first Cabinet job in 1967 was a Agricultural secretary, and that job has never left him), he was reelected because the hard left, part of the governing coalition but unhappy with the compromises that requires, fielded so many different candidates, who all seemed to be more against the "sold out centrist" Socialists that they ended up taking enough votes from Jospin that Le Pen swooped into the second round instead of him, and Chirac duly got elected in the second round.

He has since surfed on the popularity of his anti-Iraq War stance, despite having no substitute policy for the region, and no real vision beyond opposing the US.

France policy has drifted along, with no clear vision, torn between a system that obviously works well in some ways, needs reform in many other ways and faces the relentless pressure of the dominating Anglo-Saxon business-oriented English-speaking paradigm which spends a lot of time explaining how France is fucked up.

Chirac is not helping in protecting the things that deserve to be and reforming those that should - and could - be. He is just drifting along, enjoying his time in the limelight for the opportunity to be in the limelight, not to actually do something.

And you wonder why French people are grumpy.

Posted by Jérôme à Paris on March 15, 2005 at 05:44 AM | Permalink | Comments (18)

March 14, 2005

Billmon: 03/14

It's laundering, basically: Signed Sealed Delivered

The Camera as Weapon: Home Movies

Channeling Moon of Alabama (again ;-) ): Modernizing Hemingway

Billmon is really great at finding the right contrast to demask the issue.

Posted by b on March 14, 2005 at 04:40 PM | Permalink | Comments (4)