Moon of Alabama Brecht quote
April 30, 2005

Barfly Art: Transhumanity

The Evanescence of Things
by beq

pastels with sumi ink
on paper from Thailand
(fullsize, uncompressed - 600 KByte)

There is more ...

The Full Moon was Quick to Rise
by beq

pastels with sumi ink
on paper from Thailand
(fullsize, uncompressed 600 KByte)

Generally, the primary purpose of transhumanism is to increase the efficiency of human functioning by modifying the human genome of zygotes, which I assume means eliminating the countless rare, common, and omnipresent genetic flaws, not excluding age-induced degeneration, and to increase human desirability, ability, versatility, and resilience. Other technologies that serve a similar purpose are also considered.
A Proposed End-Goal: Justice Maximism (suggested by the artist)

Posted by b on April 30, 2005 at 11:54 UTC | Permalink | Comments (13)

Billmon: Rush to Judgment

R.L.: "Compassion is no substitute for justice."

Posted by b on April 30, 2005 at 8:10 UTC | Permalink | Comments (40)

April 29, 2005

Flag-Draped Anniversary

Short after the Abu Ghraib pictures became public knowledge one year ago, Rumsfeld said:

Judge us by our actions. Watch how Americans, watch how a democracy deals with wrongdoing and scandal and the pain of acknowledging and correcting our own mistakes and weaknesses.

Powell added:

Watch how we deal with this. Watch how America will do the right thing. Watch what a nation of values and character, a nation that believes in justice, does to right this kind of wrong. Watch how a nation such as ours will not tolerate such actions.

The Army's whitewash

ignores centuries of norms within the military profession and undermines the legal doctrine of command responsibility

says Phillip Carter. The responsible civilists have been promoted, Congress ignores its responsibility, the media show interrogations as a laudable act and in Iraq torture continues.

Some newsshows, set to re-broadcast some Abu Ghraib torture pictures today, will cancel these plans and show flag-draped coffins instead. Pictures that conveniently were released today. Threehundertandsixty perfect illuminated photographs of neatly flag-draped coffins published -incidently???- on this special day. Nice try - the Iraqis will love their anniversary cake! How much was Ketchum paid for the job?

Mr. Rumsfeld, Mr. Powell - we are still watching. Waterboarding Abu Ghraib pictures on flag-draped coffins may work on Faux News. It doesn´t work around the world - not yet at least.

Billmon asked a year ago:

So how much deeper into the sewer are we collectively going to climb before we finally admit defeat?

Still climbing deeper, still climbing deeper ...

Posted by b on April 29, 2005 at 12:35 UTC | Permalink | Comments (49)

Billmon: Down Time

What the U.S. bubble economy needs, then, is for even more speculators to take even larger unhedged positions in the bond market financed with borrowed yen. And the best way to persuade them to do that is to convince them short-term yen rates will remain close to zero; that the ODIC cartel will defend the dollar to the death; and that long-term U.S. bond prices are unlikely to fall dramatically. It also helps to make alternative uses of speculative capital look less appealing.
.. As I told a friend the other day, the supply side hag may be aging rapidly, but she may still have a few more, um, carnal moments left in her yet. And at this late date, that may be about the best we can expect.

Down Time

Posted by b on April 29, 2005 at 7:34 UTC | Permalink | Comments (27)

April 28, 2005

Bush Not Putting Enough People in Jail

Despite real efforts in 2003 and 2004, the US prison population has been mostly stagnant under Bushco, as compared to previous periods:



Is Bush soft on crime?

Of course, I am being snarky. The recent news (linked to above) about the renewed growth of the prison population in the past 2 years have not been mentioned widely in the blogosphere as far as I have been able to ascertain, and I thought I would provide these numbers and a few others below.

The scandal is the sheer size of the prison population in the US, and its becoming another chunk of the militaro-industrial complex - or another "complex" on its own right.



With an inflation of around 265% for the period, this means that police and justice budgets were flat or growing very slightly, the corrections budget doubled in real terms, and the prison population tripled. (of course, the Dow Jones was multiplied by 16 during the period)

It's also interesting to note that this is a fairly recent trend:


Source: The Sentencing Project (pdf, 17 pages).

The result is that the US now have the highest incarceration rate in the world, by very far if compared to other Western countries (2002 numbers):


This graph comes again from The Sentencing Project, which thus analyzes these numbers:

The high rate of imprisonment in the United States can be explained by several factors:

  • A higher rate of violent crime than other industrialized nations.
  • Harsher sentencing practices than in other nations, particularly for property and drug offenses.
  • Sentencing policy changes over a period of three decades, particularly the shift toward mandatory and determinate sentencing, restrictions on judicial discretion, and a greater emphasis on imprisonment as a preferred sanction.
  • Policy changes adopted as part of the “war on drugs,” leading to a vastly increased use of the criminal justice system as a means of responding to drug problems.
  • An even more terrifying statistic, provided in the first Yahoo link above, is that

    An estimated 12.6 percent of all black men in their late 20s were in jails or prisons, as were 3.6 percent of Hispanic men and 1.7 percent of white men in that age group

    That's one in 8 in prison, which means that, with those that have been and those that will fall at some other point in the future, one black man in 3 or so will know jail in his twenties. How is that not a major scandal bringing real action? One man in three?

    (Note that I am not claiming that minorities are treated any better in other countries: the Sentencing Project notes that the relative ratio of incarceration for minorities is similar or worse in other countries; but, combined with the high absolute level of incarceration, only the US sees such a high proportion of its young men go to jail)

    Note also that with 2.1 million people in jail (and another 5 million under the control of the penal system), most of them of working age, the US unemployment rate is artificially lowered by at least 1.5 points (if not 5 points, depending on how you evaluate the employment prospects of ex convicts or people on probation).

    The other scandal of course, is the way these people are treated while in jail. Abu Ghraib was not news to US inmates.

    Abu Ghraib .... Shocking? What Happened There Is Commonplace at U.S. Prisons

    in the typical American prison, designed and run to maximize degradation, brutalization, and punishment, overt torture is the norm. Beatings, electric shock, prolonged exposure to heat and even immersion in scalding water, sodomy with riot batons, nightsticks, flashlights, and broom handles, shackled prisoners forced to lie in their own excrement for hours or even days, months of solitary confinement, rape and murder by guards or prisoners instructed by guards--all are everyday occurrences in the American prison system.

    The use of sex and sexual humiliation as torture in Abu Ghraib and the other American prisons in Iraq is endemic to the American prison. Psychological and physical sexual torture is exacerbated by the underlying policy of denying prisoners any volitional sex, making the only two forms of sexual activity that are physically possible--homosexuality and masturbation--both offenses subject to punishment. Strip searches, including invasive and often intentionally painful examination of the mouth, anus, testicles or vagina, frequently accompanied by verbal or physical sexual abuse, are part of the daily routine in most prisons. A 1999 Amnesty International report documented the commonplace rape of prisoners by guards in women's prisons.[2]

    Each year, numerous prisoners are maimed, crippled, and even killed by guards. Photographs could be taken on any day in the American prison system that would match the photographs from Abu Ghraib that shocked the public

    Some US Prisons as Bad as Abu Ghraib

    Prisoner Abuse: How Different are U.S. Prisons? (Human Rights Watch)

    Abu Ghraib, USA (Anne-Maris Cusac, The Progressive - many more links in that article)

    When I first saw the photo, taken at the Abu Ghraib prison, of a hooded and robed figure strung with electrical wiring, I thought of the Sacramento, California, city jail.

    When I heard that dogs had been used to intimidate and bite at least one detainee at Abu Ghraib, I thought of the training video shown at the Brazoria County Detention Center in Texas.

    When I learned that the male inmates at Abu Ghraib were forced to wear women's underwear, I thought of the Maricopa County jails in Phoenix, Arizona.

    And when I saw the photos of the naked bodies restrained in grotesque and clearly uncomfortable positions, I thought of the Utah prison system.

    Donald Rumsfeld said of the abuse when he visited Abu Ghraib on May 13, "It doesn't represent American values."

    But the images from Iraq looked all too American to me.

    I've been reporting on abuse and mistreatment in our nation's jails and prisons for the last eight years. What I have found is widespread disregard for human rights. Sadism, in some locations, is casual and almost routine.

    Reporters and commentators keep asking, how could this happen? My question is, why are we surprised when many of these same practices are occurring at home?

    A Visit to Valley State Prison for Women (Amnesty International, 1999)

    Recommendations to address human rights violations in the USA (Amnesty, 2004)

    But of course, inmates cannot vote. So maybe it is a good thing that prison populations have not grown so much in recent years...

    Posted by Jérôme à Paris on April 28, 2005 at 14:15 UTC | Permalink | Comments (18)

    Billmon: The Grand Delusion

    To the Straussians, rationality does not provide an adequate basis for a stable social order. To the contrary, the Age of Enlightenment has ushered in the crisis of modernity, in which nihilism – the moral vacuum left behind by the death of God – inevitably leads to decadence, decline and, ultimately, genocide.

    That logical leap from Jefferson to Hitler might seem like the intellectual equivalent of Evel Knieval’s outlandish attempt to jump the Snake River canyon on a rocket-powered motorcycle. But it’s essential to the Straussian world view – just as it provides the crucial angst that gives neo-conservatism such sharp political edges.

    The Grand Delusion

    Posted by b on April 28, 2005 at 7:45 UTC | Permalink | Comments (346)

    April 27, 2005

    News, Views, Opinions ...

    An open threatd ...

    Posted by b on April 27, 2005 at 17:58 UTC | Permalink | Comments (85)

    Bye-bye 747

    The latest tool for the most inconvenient way to travel comes down at a list price of some $270 million.

    On your flight to that "lonely spot" the travel agent envisioned, you will be joined by up to 839 fellows in being immobilized, dehydrated and deprived of oxygen.

    Having arrived you will just forget about peak oil, global warming, uncontrolled development and all the other menaces your unreasonable fellow humans bring about.

    Okay, apart from that depression, congrats to the Airbus folks who did get this hydrocarbon eating bird up and down without trouble.

    Posted by b on April 27, 2005 at 17:26 UTC | Permalink | Comments (13)

    It's Too Late

    For those of you that have followed my previous economic stories, this should not come out as a surprise, but the Financial Times publishes yet another pessimistic article about the US economy.

    Today's installment is quite explicit: Property could fall like a house of cards

    Nout Wellink, president of the Dutch central bank, last month warned that a hangover from the property boom could well exacerbate the next downturn. Both the Dutch experience and the history of housing booms suggest that this counsel deserves to be taken seriously. However, it is probably already too late for the leading Anglo-Saxon economies to escape lightly from the consequences of their property bubbles.

    In the late 1990s, the Netherlands had one of the most successful economies in Europe. At the time, both Dutch house prices and household credit growth were rising at double-digit rates. As homeowners cashed in on their burgeoning home equity, the Dutch savings ratio collapsed (from more than 13 per cent of income in 1997 to less than 7 per cent three years later).

    The Dutch housing market cooled after interest rates began climbing in 1999. The following year, house-price inflation came to a halt. Household credit growth slowed simultaneously - mortgage equity withdrawal fell from €10bn ($13bn) in 1999 to €5bn in 2002. This had an adverse effect on consumption. As consumer confidence dipped and unemployment climbed, the Dutch began to save more. Three years after the end of the housing boom, the economy contracted.


    Contrary to popular perception it is not necessary for house prices to fall to create a serious problem for the economy at large. When house prices merely cease rising, the rate of credit growth normally slows, inducing householders to save more and spend less. At best, this produces a mild drag on the economy, as has been the case in the Netherlands. At worst, the economy undergoes a severe slowdown with soaring unemployment and a painful recession - as occurred in Japan, the UK and Scandinavia in the early 1990s.

    Note this - you need perpetually increasing housing prices to support consumption when such consumption is not based on growing wages (stagnant in the US for the past 2 years) but on increasing asset prizes being monetized through equity withdrawals and mortgage refinancing on increasingly aggressive terms.

    Even if prices stop increasing, you get economic pain: consumption slowdown, stagnant economic growth, with all the usual consequences: higher unemployment, bankruptcies, higher budgetary deficits as tax revenues decrease.

    But it is not just borrowers who are hurt by a housing market collapse. Rising levels of bad debt inflict damage on lenders' balance sheets. This often leads to a credit crunch and sometimes to a full-blown banking crisis. The failure of the Bank of United States in 1930, for instance, during the Great Depression, was due largely to losses on property lending. Furthermore, as over-indebted households cling tenaciously to their homes and lenders delay the politically unpopular and costly process of foreclosure, the banking system may have to deal with the aftermath of a housing crash for many years.

    Remember also that houses represent the biggest share of US assets. For most people, their home is their single biggest asset; and their mortgage their single largest financial commitment. Should a serious economic crisis hit, banks will be seriously hit along with many of their clients, especially when they have provided highly leveraged financing (like the 30-year, no principal repayment, interest-only-in-the-first-few-years loans provided in some markets). And banking crises cost a lot of money in bailouts, and always have the risk of a systemic crisis (when there are bank runs or at least a massive loss of trust in the financial system). Furthermore, many of the recently invented financial instruments (like CDOs) have NEVER been tested through an economic downturn.

    Government finances commonly deteriorate after housing booms end, as fiscal policy is employed aggressively to prevent the economy from slumping further. Since the end of the property bubble in the early 1990s, Japanese government debt as a percentage of gross domestic product has more than doubled and currently exceeds 160 per cent of national income.

    That's actually the worst part: housing market slowdowns have massive negative consequences for government budgets, which suffer mightily form the downturn. If you think that the budget deficit is bad, think what it will be like after that... The Bush administration has used up all reserves and spent recklessly despite benefiting from a supposedly strong economy.

    It's REALLY a house of cards. The recent apparent economic growth has been obtained by throwing massive amounts of money at an economy increasingly unable to absorb it (to invest) - that money has thus been spent, either in the total waste that the Iraqi war is, or on a growing volume of imports from China and other places. It's not growth, it's binging on plastic - and it leaves no room for maneuver when the bad times actually come, as they will.

    The end of housing bubbles in other countries has been associated with periods of prolonged economic weakness, increasing financial fragility, rising government deficits and the appearance of monetary instability.

    We already have this before the end of the bubble, what will it be after?

    Again, the blame goes to both Bush for his reckless budgetary policies and to Greenspan for his amazingly lax monetary policy. Call him "Bubbles" Greenspan each time you write and talk about him, because that's the only way to put it. Stephen Roach, the markedly bearish chief economist of Morgan Stanley, which I quote often, has another piece this week where he wonders if there could actually be some kind of conspiracy in Greenspan's act, in view of their obvious recklessness:

    Morgan Stanley's Global Economic Forum (25 April 2005)

    I am not a believer in conspiracy theories.   But the Fed’s behavior since the late 1990s is starting to change my mind.

    In all my years in this business, never before have I seen a central bank attempt to spin the debate as America’s Federal Reserve has over the past six or seven years.   From the New Paradigm mantra of the late 1990s to today’s new theories of the current-account adjustment, the US central bank has led the charge in attempting to rewrite conventional macroeconomics and in making an effort to convince market participants of the wisdom of its revisionist theories.  The problem is that this recasting of macro is very self-serving.  It is a concentrated effort on the part of the Fed to exonerate itself from the Original Sin of failing to address asset bubbles.  The result is an ever-deepening moral hazard dilemma that poses grave threats to financial markets.

    Go read the whole piece, it provides more in-depth explanations of how the Fed has dug itself deeper at every turn, by inflating a new, bigger bubble whenever the previous one threatened to burst. The housing one is likely to be the last (unless, as Sterling Newberry suggests over at dKos, the Bushistas manage to raid the Social Security Trust fund for one last binge), and it will have consequences in the real world that are known, as they have been experienced many times in many countries.

    I'll let Edward Chancellor, the author of the Financial Times piece, conclude:

    The head of the Dutch central bank now regrets what he calls the "artificial stimulus" provided to the economy by the housing boom. With the housing markets in the UK and the US vulnerable to rising interest rates, officials at the Federal Reserve and the Bank of England may shortly be forced to learn the same painful lesson.

    Posted by Jérôme à Paris on April 27, 2005 at 10:40 UTC | Permalink | Comments (28)

    April 26, 2005

    Friendly Fire 2

    by Vauro, Il Manifesto

    Details released in Washington on Monday by a US army official said the soldiers "were not culpable of dereliction of duty in following their procedures."


    [Sgrena said:] "They're saying they were only following the rules of engagement. But if you fire on a passing car which you were warned about, and follow the rules of engagement, you have to ask what those rules really were?"

    US-Italian talks after report clears soldiers in friendly-fire shooting

    Posted by b on April 26, 2005 at 17:22 UTC | Permalink | Comments (37)

    April 25, 2005

    Building Sand Castles


    As you  can see, I am on holiday and enjoying the Atlantic beaches in the spring, keeping myself busy building sand castles and trying to get them to resist the onslaught of the rising tide.

    I love building sand castles; I did that as a kid, and now as a father I have a great excuse to have a go at it again. It's utterly pointless, it's tiring and it's not even always successful. And yet it usually brings about a peaceful kind of satisfaction, of fulfillment that makes it all worthwhile.

    As I've been cut off from the internets most of the time in the past few days, I've been thinking about politics, and about what I've been doing on MoA, and what we are all doing, and while I was fighting the tide it felt that it was not so different from what we are all doing on MoA.

    When I think about it, a lot about life is pointless. You grow up, do stuff, work, possibly have a family and kids, and die, without changing the world around you in any noticeable way other than a more or less wide circle around you. We do it because we're there. But this is a bit like the sand castles, isnt it? That's the whole point. You do it because you're there, and while you're at it you do your best, even if you know that it will eventually be run over by the tide. Precisely because it is fleeting, the effort and the heart you put into it as just as important, if not more, than what you build. Same with your life: you try to live it as well as you can, behaving throughout in the way that you think if the most appropriate. If you have any perspective, you may decide that how you do things is more important than the result, which will be meaningless in the end.

    Taking the image a notch down, you get to the level of our current political situation, where I think we all feel that we are fighting against a rising tide of seemingly unstoppable right wing assertiveness and arrogance, capturing power, defacing language, polluting many supposedly neutral institutions, and generally showing little respect for those that do not think like them. That's where my sand castle came in initially in my thoughts - we are an island or resistance, fragile, always in danger of being overwhelmed, and yet also, precisely, a symbol of resistance, of not giving up, of making a stand. And it is also a sign of hope: after all, sand is available, all is takes is enough effort to build it high enough to withstand the force of the waves, and to start again and again as the walls are being sapped, to reinforce the weakest parts, to focus on the most urgent when required but take the time to build stronger foundations when the threat is more remote, to build new front lines that protect your main asset by moving the fight elsewhere.

    Writing on blogs in general and here in particular is a bit like that. It's a small effort against a relentless adversary, it's probably not going to have any long term effect but it offers us many important things:

    - the ability to make a stand, to identify oneself clearly with a set of values and policy choices (in the immortal words of Bridget Jones: "we stand for the principle of sharing, kindness, gays, single mothers and Nelson Mandela as opposed to braying bossy men having affairs with everyone shag-shag-shag left, right and center and going to the Ritz in Paris then telling off all the presenters in the Today programme");

    - the provision of ammunition (shovels and buckets) to fight our fights - information, a lot of information, to argument, to act or simply to feel more confident in the essential rightness of our opinions;

    - the feeling of community, that we are not alone in that fight, that many energies are focused on the same goal and that their strength - our strength -  could very well be enough and that we will be able to outlast the tide.

    Because that's also the lesson here: the tide will go back out. The only thing that matters is - will we still be around when it goes out, and will the flag on out castle still be there to be raised? Will we have sold out? Will we have been utterly defeated? Or will the sand walls have withstood the onslaught?


    I remember growing up, learning the history of my country (France) during this century, and wondering often: what would I have done during WWII? Would I have been brave enough to be in the Resistance? Or would I have been opportunistic and risen in the Collaboration Vichy administration? Or would I have been in the majority, all the people that remained silent, did not choose sides and waited for the fight to play itself out? I have been very grateful, for many years, that there have been no wars or no conflicts in my country that would have pushed me to make such a choice. I did my military service, but did not have to face real combat. I respect men (and women) who serve in the army to protect us, risking their lifes for us, but I hate their job which is to kill and destroy and I grieve the fact that we still have not managed to make peace without them.

    I loathe violence and selfishness but see these as part and parcel of human nature; they are not to be fought as such, but to be channelled into innocuous, harmless or even productive uses, and that's what institutions do. Institutions are essentially sets of rules that we all decide to believe in, and which are then formalised into laws and administrations and big buildings, but at the core they are that - rules that we all believe in ,and that thus become true because we all follow them. Such institutionalised rules are extremely strong and self-sustaning, as deviant behavior is not tolerated, but they are also very difficult to bring about, as you need everybody to accept them and to believe that everybody else accepts them.

    We are again lucky to have been born at a time, and in countries, where we have pretty good institutions, based on the rule of law, a strong State with mostly honest civil servants able to makes rules and to enforce them and to control the monopoly of force in legitimate ways. We also sense that the situation is fragile today, that these institutions are under unprecedented attack, and that we have to choose sides to protect our institutions. This is not a fight of left against right, although most of the left is on our side; it is a fight against fundamentalism, obscurantism and the simplistic "might is right" which has been the default option for mankind since its inception. It is résistance vs collaboration; it is action vs the easy slope of silence and low expectations. At least today I know what side I will be on with all my strength.

    This is also why this is not just a domestic US fight, as the perverted values of the current US administration and its fundamentalist friends threaten not only US democracy but also peace and stability in many parts of the world, either directly as in Iraq or indirectly by fuelling resentment and the rise of fundamentalism inside Arab countries led by Western-supported corrupt dictators. I fear that I will not continue the blessed life of an European of today, with peace and prosperity, for very long, as a long fight, possibly another war, threatens to engulf us all. Hopefully this fight will remain at the political level, but it seems unlikely in view of the extreme objectives of the fundamentalists and the lack of consciousness of that threat in the population.

    Sometimes it seems to me that our peoples are yearning for such strong leadership. We are dominated by individualism and selfishness, forces for collective organisation of society, like Churches, ideologies or States, are corroded and discredited by such individualism, and the only thing that thrives in that atomised environment are mediocre politicians and numbless media/entertainement and it seems that everybody yearns for higher meaning and sense, most people not having enough discipline and personal standards to find these on their own or on this site... And opportunists rush into this flaw to try to take advantage of this situation for their benefit.We must not let them.

    Thus our institutions are in danger, our freedoms are in danger, our political sand castles are in danger.

    But, as I spend these few days by the sea reflecting on all this,  I can say that I am ready to fight for these with you guys. It's pointless in the large scheme of things, but it is essential, and it is worth it. For now, I train myself on real sand castles, and I enjoy it. Both fights keep me alive and in good spirits!



    Posted by Jérôme à Paris on April 25, 2005 at 22:03 UTC | Permalink | Comments (35)

    Bush Meats Crown Prince Abdullah

    Christians detained for illegal praying in Saudi Arabia

    RIYADH, Saudi Arabia -- Saudi Arabia has detained 40 Pakistani Christians for holding prayers at a house in the Muslim kingdom, where practicing any religion other than Islam is illegal, newspapers said yesterday.

    A group of men, women and children were attending the service in the capital Riyadh when police raided the house, Al Jazirah newspaper said.

    It said authorities also found Christian tapes and books.


    There are hard reasons for Bush to behave this way despite the above news.
    Oil prices, business connections, proselytize Abdullah, manly exuberance needs - he certainly has to set persuasive priorities.

    Posted by b on April 25, 2005 at 20:26 UTC | Permalink | Comments (37)

    April 24, 2005

    Fallen Angels

    Fallen Angels, in financial language, are companies that used to have an investment grade rating and have been downrated to "junk". In normal language, they are companies which used to be a good risk as borrowers but are now considered by the rating agencies to be a poor risk (with a much higher chance that it will default on its debt).

    (Yes, yet another graph of things improving under Clinton and falling apart under Bush)

    GM is likely to become a Fallen Angel this year, and I would argue that the US economy is not far behind.

    Well, GM has been put by Standard & Poor's, one of the three main rating agencies, into a list of 50 companies (pdf, 10 pages) likely to become "fallen angels" this year. This came from S&P's decision on March 16 to revise GM's outlook from "stable" to "negative", i.e. announcing that the next likey change in rating was downwards. 291 billion dollars of debt were thus put into a twilight zone, sending jitters through the markets on various occasions, especially following its latest bad news (a quarterly loss of 1.1 billion $) last week.

    The interesting thing to note here is that the market is already behaving in some ways as if the downgrade had taken place: the interest rate required on GM bonds has shot up in recent weeks and is firmly in junk territory, i.e. it is becoming more and more expensive for GM to borrow money:

    What has not changed yet is that, thanks to the fact that it still keeps its investment grade rating, GM can still have its bunds purchased by most fund managers, many of which have strict rules on what they can and cannot purchase, and "junk" bonds being a very frequent exclusion. Mant fear what would happen if 300 billion dollar worth of bonds switched turned into junk and a number of fund managers were forced to sell. That amount would constitute around 10% of the junk bond market and would be quite hard to absorb.

    Despite soothing headlines in the US press (GM won't face Cash Crisis If Ratings Get Cut, in the WSJ), you sense that the financial press is getting itchy, noting that GM's financial costs amounted to 12 billion dollars in 2004, up 26% from 2003, and likely to increase significantly again this year.

    Standard & Poor's expect why you should worry: "fallen angels" are twice as likely (pdf, 29 pages) to default as companies that were rated "junk" (or "high yield" if you want to look at it with a positive spin) from the start.

    British business papers put it more directly: How much worse can it get? in the Economist, and Rotten cars, not high costs, are driving GM to ruin in the Financial Times.

    These two articles focus on what's wrong with US car companies:

    For the past two years the threat of collapse has hung in the Detroit air as America's car firms have wrestled with falling sales, unprecedented competition at home and soaring retirement and health-care costs for current and former employees. No one really expects either GM or Ford to seek Chapter 11 bankruptcy protection this year or next, but the likelihood is growing fast that they will do so eventually.

    GM's cash outflow from its car business was $3 billion in the first quarter, 50% more than it had forecast for the whole year.


    And the more that Detroit's finest retrench, the greater the burden of their "legacy" retirement and health-care costs will become proportionately: GM now has 2.5 pensioners for every current employee. In 1999, a deal between Detroit's big three carmakers and the United Auto Workers Union (UAW) included generous healthcare benefits for pensioners as well as workers. These are locked into labour deals that run until 2007.

    The Economist focuses on the "legacy costs", i.e. healthcare and pensions. Predicatbly in view of that paper's laisser-faire ideology, they blame that fact on the Unions, which have made the car manufacturers unprofitable:

    But at least they point to a real problem: companies are not very good at providing health care and pensions for their employees: either they do a decent job at a high cost, or they do a bad job.

    The Financial Times is even more scathing and to the point: the companies are losing money and being downgraded because they make bad cars and no amount of financial engineering (the usual solution) will help here. Unions or pensions are just side shows, hiding the core problems:

    GM's problems stem not from its spiralling healthcare costs but from its inability to build cars worth buying.

    The Grand Prix is a case in point: cheap plastics, uncomfortable seats, bone-jarring suspension, the exterior dimensions of a large car combined with the interior space of a small car.

    The US car-buying public agrees.


    Is lack of resources to blame for this procession of disappointing products? It does not help. Healthcare costs add $1,500 to the cost of each new GM vehicle, putting pressure on design engineers to use lower-grade materials and off-the-shelf components. Yet resource allocation remains by far a bigger problem. For example, while Toyota and Honda were investing in gasoline-electric "hybrid" engines, GM pumped research and development dollars into hydrogen-powered vehicles that remain years away from mass production. The result is that the world's biggest carmaker has nothing to compete against the new breed of hybrid vehicles led by Toyota's Prius.

    Similarly, while the Japanese companies were investing in their core products, GM squandered capital on the acquisition of Saab, the niche Swedish car company, and a questionable investment in Fiat.


    Yes, GM needs to find a way to reduce pensions and healthcare costs. But this is a necessary, not sufficient, condition for a turnround. A company happy to inflict the Pontiac Grand Prix on its customers does not deserve to thrive.

    To be frank, this sounds just like the US economy as a whole: with an increasing, and increasingly worrying, debt burden (which, had it be borne by any Third World country in would have brought the IMF in), distractions about pensions, while the country's competitivity keeps on going down.

    Would you have guessed that France and the Netherlands together export as much as the US, with little over a quarter of the population and "sick" economies? Not to mention Germmany's performance, of course...

    What was good was GM was good for the US. What is wrong with GM is also what's wrong with the US economy.

    - when the business/economy slows down, flood it with cheap credit ("keeping America rolling") and generally rely on financial tools and generous debtors to keep going;

    - fragilised by the increasingly heavy burden of pensions and healthcare;

    - most of all, totally dependent on the availability of cheap oil (fuelling SUVs, sprawl, McMansions and outsourcing to faraway suppliers)

    As I wrote in recent diaries, these are not going to improve soon, and both GM and the US economy are likely to get into even direr straits in the near future.


    Posted by Jérôme à Paris on April 24, 2005 at 21:24 UTC | Permalink | Comments (28)

    Armitage's Revenche

    This should break the Senates Foreign Relation Committee deadlock about the John Bolton nomination.

    Newsweek reports:

    Colin Powell plainly didn't like what he was hearing. At a meeting in London in November 2003, his counterpart, British Foreign Secretary Jack Straw, was complaining to Powell about John Bolton, according to a former Bush administration official who was there. Straw told the then Secretary of State that Bolton, Powell's under secretary for arms control, was making it impossible to reach allied agreement on Iran's nuclear program. Powell turned to an aide and said, "Get a different view on [the Iranian problem]. Bolton is being too tough."

    The very best US puppy Jack Straw had to intervened against Bolton to get a solution on Iran,

    Perhaps the most dramatic instance took place early in the U.S.-British talks in 2003 to force Libya to surrender its nuclear program, NEWSWEEK has learned. The Libya deal succeeded only after British officials "at the highest level" persuaded the White House to keep Bolton off the negotiating team. A crucial issue, according to sources involved in the affair, was Muammar Kaddafi's demand that if Libya abandoned its WMD program, the U.S. in turn would drop its goal of regime change. But Bolton was unwilling to support this compromise. The White House agreed to keep Bolton "out of the loop," as one source puts it.

    and the puddle himself had to bark out loud to keep Bolton away from messing up the successful negations with Lybia. The only success this administration had on WMD proliferation so far.

    The Bolton case should now finally move away from the fruitless discussion about bullying subordinates - an issue that can not be a serious ground for Republicans to deny Bush their consent on the nomination. But the heavyhanded attempts to mess up foreign relation policy are very good reason. Additionaly

    the committee is examining fresh allegations that Bolton misused or hyped flawed intelligence against Syria, China and Iran.

    Add to this the already proven Bolton WMD lies on Iraq and Cuba and you can tell that no future word this man may utter would be taken as serious fact or likely intelligence by friends or foes.

    Bolton is a uncontrollable firebrand who throws lighted matches at any gas station he passes. He can not be trusted to run any responsible foreign relations position.

    The grownup Republicans in the SFRC must now ask Bolton to step away from the UN job.

    They should offer him an ambassadorship in McMurdo. Thinking again - the possible  consequences of accelerated glacier melting should raise serious concerns on even that nomination.

    Posted by b on April 24, 2005 at 14:30 UTC | Permalink | Comments (11)

    April 23, 2005

    MediCare Claim Hearing

    WASHINGTON (NYT/RBN), April 23 - A new federal policy will make it significantly more difficult for Medicare beneficiaries to obtain hearings in person before a judge when the government denies their claims for home care, nursing home services, prescription drugs and other treatments.

    For years, hearings have been held at more than 140 Social Security offices around the country. In July, the Department of Health and Human Services will take over the responsibility, and department officials said all judges would then be located at just four sites - in Bucharest; Bangladore; Manila; and Antananarivo.

    Under the new policy, Medicare officials said, most hearings will be held with videoconference equipment or by telephone. A beneficiary who wants to appear in person before a judge must show that "special or extraordinary circumstances exist," the rules say.

    But a beneficiary who insists on a face-to-face hearing will lose the right to receive a decision within 90 days, the deadline set by statute.

    All beneficiaries are 65 or older or disabled. About 5 million of the 41 million beneficiaries are 85 or older, and some are so sick they die while pursuing appeals.

    The Department of Health and Human Services defended its new policy, saying the use of videoconference equipment would enable judges to "complete more cases" within the 90-day deadline, because they would not have to spend time traveling to remote sites. In a summary of its plans, the department said it was "not economically or administratively feasible" to station judges around the country.

    Posted by b on April 23, 2005 at 23:19 UTC | Permalink | Comments (9)

    Open Again

    News, views and visions ...

    Posted by b on April 23, 2005 at 22:46 UTC | Permalink | Comments (58)

    April 22, 2005

    Cost-Effective, Humane, Even Thrilling

    The counter on Helena Cobban's site says

    82 days since Iraqis elected an Assembly with a UIA-list majority, without a government accountable to that Assembly being allowed to take power.

    Meanwhile longtime CIA asset's Allawi list refuses to join Iraq cabinet without five posts

    Allawi's Iraqiya list took just 40 of the 275 seats in parliament in landmark elections on January 30. The Shiite-led United Iraqi Alliance took 146 seats, while the main Kurdish bloc took 77.

    You are free to guess who gave the advice to Allawi to further block the creation of an Iraqi government with his ridicules request. It is time for Sistani to call for some impressive peaceful demonstrations or for Al Sadr to induce some other forms of mass protest.

    The military situation of the U.S. forces is getting worse day by day. In a Washington Post report by an embedded reporter we find this scene from a Forward Operating Base only 25 miles from Baghdad:

    Capt. Ryan Seagreaves, of Allentown, Pa., told [his commander] McMaster that he needed engineers to reinforce and expand his austere base so that there would be room for more Iraqi forces. He said he also needed dirt to fill protective barriers. Iraqi contractors are so terrified to work in the area that a convoy of 10 earth-filled dump trucks recently refused to travel south to McMaster's base. One driver fainted when told the destination, he said.

    USA Today writes about another FOB:

    Unable for safety reasons to patrol the city on foot and in vehicles, troops are limited in their ability to gain important street-level intelligence. So the Marines primarily mount counterattacks on insurgents and criminals who fire into the camp. Last week, the Marines averted disaster when three car bombers backed by 30 insurgents assaulted the camp.

    May I suggest that situations where you are "unable to get dirt" and you are "restricted to counterattack" are exactly those, that tell you it is game-over and to get your ass out of there. These under supplied FOBs are ready to be run over. One of them will inevitably be annihilated by the insurgents within the next weeks. I do not expect them to allow for survivors.

    In this context an important book by Andrew J. Bacevich has been released and excerpts are available at Mother Jones and elsewhere. From the The Normalization of War:

    The American public's ready acceptance of the prospect of war without foreseeable end and of a policy that abandons even the pretense of the United States fighting defensively or viewing war as a last resort shows clearly how far the process of militarization has advanced.
    The old twentieth-century aesthetic of armed conflict as barbarism, brutality, ugliness, and sheer waste grew out of World War I, as depicted by writers such as Ernest Hemingway, Erich Maria Remarque, and Robert Graves. World War II, Korea, and Vietnam reaffirmed that aesthetic, in the latter case with films like Apocalypse Now, Platoon, and Full Metal Jacket.

    The intersection of art and war gave birth to two large truths. The first was that the modern battlefield was a slaughterhouse, and modern war an orgy of destruction that devoured guilty and innocent alike. The second, stemming from the first, was that military service was an inherently degrading experience and military institutions by their very nature repressive and inhumane. After 1914, only fascists dared to challenge these truths. Only fascists celebrated war and depicted armies as forward-looking -- expressions of national unity and collective purpose that paved the way for utopia. To be a genuine progressive, liberal in instinct, enlightened in sensibility, was to reject such notions as preposterous.

    As it is convenient (and profitable) for the established media not to show the real aesthetic of war, you can watch some videos made by the legitimate resistance to get some sense of what is going on. Here are some links form the Oxford Antiwar site:

    Mercenary chopper shot down - no prisoners taken (RealMedia)
    Vehicle born IED on convoi (RealMedia)
    Secondary IED attack on US troops (RealMedia)
    IED on Stryker vehicle (mpeg)
    Kid gets shoot by US(?) sniper (Windows media player)


    In the right circumstances, for the right cause, it now turned out, war could actually offer an attractive option--cost-effective, humane, even thrilling. Indeed, as the Anglo-American race to Baghdad conclusively demonstrated in the spring of 2003, in the eyes of many, war has once again become a grand pageant, performance art, or a perhaps temporary diversion from the ennui and boring routine of everyday life.

    War has not changed, but the people and the ruling class of the United States. As Bacevich says: "only fascists celebrated war."

    Posted by b on April 22, 2005 at 20:46 UTC | Permalink | Comments (13)

    Billmon: 04/22

    V.  End Game


    IV.  Stormy Weather


    III.  The Good German


    II.  Unintentional Irony


    I.  Indecent Exposure

    .. So it occurred to me that maybe the media megamonsters are trying to deposit some journalistic capital in the First Republican Bank of Congress, in hopes of being able to write checks on it when and if the FCC launches its crackdown. Who knows? Sucking up to the Bible fedayeen with a little prime time rapture might also pay dividends down the road. ..

    Posted by b on April 22, 2005 at 6:18 UTC | Permalink | Comments (86)

    April 21, 2005

    On Pain, Addiction, and Powerlessness

    by lorraine

    My name is Lorraine and I am an addict.

    These simple words, and a hell of a lot of hard work, have saved my life--hell, given me a life, a life that was lost to me for several years while I struggled with the effects of a debilitating neck injury that caused incessant pain. In part one of this diary, I want to talk about personal addiction. In part ii, I want to talk about the politics of addiction. 

    I remember what the pain felt like, because I wrote about it one night, while in its toxic embrace:

    On a bad pain day, she felt locked in Spock's Vulcan grip, only for her there was no relief of unconsciousness, just a throbbing at the top of her shoulder that was relentless. But that wasn't the worst of it. The pain leaked forward, down her arms, as if someone had poured molten steel along the nerve paths, down her biceps, through her elbow, and then, like a train at a switching yard, changing path, and following the ulnar nerve along the edge of her arm. Where her wrist met her palm, that knob of bone directly below her pinkie, someone had stationed a big, beefy construction worker with a jackhammer, and he rat-a-tatted his drill so that her hand burned. And finally, at the end of the road, the tips of her pinkie and ring finger, a buzz of electricity constantly arced--as if between two diodes in a mad scientist's laboratory.

    The injury was simple, really. A severely ruptured disc in my cervical spine. It was complicated by a pregnancy that made surgery impossible, and so, for months, I lived with crushed nerves in my neck, which eventually led to nerve damage.

    The first course of treatment was medication. Here is what the early days of meds were like:

    Different pain medications had different effects and she sought to match pain intensity to analgesic, and then to titrate the dose, so that the buzzing yellow of her pain could become a gentle green, changed by the soporific blue of the narcotic capsules. On days that weren't too bad, she took tylenol with codeine-- 30 to 60 mg as she needed it. Codeine's effects were like that of a doily on an old coffee table--it covered the stain but couldn't remove it. When she took codeine, she was smoke wafting through her house. On days that were slightly worse, she turned to Vicodin. She secretly admitted to herself that Vicodin could become a vice if she let it. Stronger than codeine, one of the lovely side-effects was the euphoria that accompanied it. The sense of well being that made the world a vivid, inviting, invigorating place where she had visions of herself as victor of the world--a Valkyrie swooping down from the heavens. But Vicodin was a selfish master, needing her flesh more and more. It was the one she rationed to protect herself from addiction. The final option, which she did not like to take except on those occasions when pain had brought her to her knees, was morphine. Morphine replaced the blood in her veins with pudding, making her heart beat sluggishly against her ribs, suffusing her with an unpleasant heat and rendering her helpless. It frequently made her throw up, so she only took it when there was no alternative to pain. Pain had held her in its toxic embrace for three years now. It was a cruel lover, but battered and hurting, she had no place to go. She was pain's prisoner on some days, but occasionally, on rare mornings, she awoke to find herself pain-free and she reveled in those days like a kid at a carnival--eager to do everything at once before all the prizes had been given away on the midway.

    What followed was labor and delivery, major spinal surgery, more pain, more drugs, acupuncture, chiropractics, hypnotism, more epidural steroid injections, counseling, applied kinesiology, more drugs, surgery to implant a dorsal column stimulator, and more drugs. By the time I realized that I was in trouble (okay. strike that. By the time I accepted that I was in trouble) I was on Fentanyl patches and was taking enough supplemental OxyIR and Vicodin to supply an opium den.

    I went into detox. On February 19, 2001, I emerged for the first time in several years, drug-free. Should have been gravy from there, right? Nope. Ask any addict or alcoholic. Recovery is damn hard work.

    I started hanging out with other people who were trying to stay clean and sober. I started intensive therapy. I got a divorce. I made a new life for myself.

    My pain was real. But my pain was exacerbated by the fact that my life was out of control. I took drugs to kill the pain in my body, but a fair portion of that physical pain was caused by the pain in my life. By my unmanageable feelings. By my sense of worthlessness. By my inability to connect to the things that were really important. By my feelings of inadequacy. But mostly, my life was ruled by fear. Fear of everything, that despite my big mouth, turned me into a person who was deathly afraid to stand up for herself. Afraid she would get hurt. And this is my segue into American politics. If you're still reading, I thank you for your patience.

    Part II
    The politics of addiction.
    Hello. My name is America, and I am sitting in this meeting because my friend Lorraine suggested I should come.

    I'm not sure really when my addiction began. I look back over the past two-hundred odd years of my history and I see all sorts of psychic wounds. I had a tyrannical father, and I rebelled against him. Took up arms against him, and drove him out. I thought that would take care of my problems, but I wasn't done hurting myself. Even when I had the chance, I chose to cut myself off from parts of my body--Africans, women, those without property--told myself that those parts of me were less important, and that I didn't need to pay attention to the discomfort those parts of me caused.

    Since then, those parts of me keep getting hurt, but I don't want to go back to that original wound and deal with it. That would require feeling some things that I'd prefer not to feel. I'm in pain now, but I've developed a whole host of ways of dealing with my pain. I know some of you think that qualifies as addiction. But I'm not ready to admit I have a problem yet.

    I've got ways of dealing with my pain, however. They're called distractions. There's war, which is always good for taking my mind off whatever's bothering me. If I focus my attention on getting control over other people's lands and cultures, I don't have to think about the unmanageablility of my own culture. I've got plenty of women and poor people and racism, but I don't to focus on that right now. That would hurt.

    If I can't shoot someone, maybe I can buy something. I like to spend money. Buying things makes me think I can be happy. I'll go out and buy a new gas-guzzling car that lets me sit high up on the road, or I'll buy the newest gadget or the newest pair of shoes from Nike. I know people suffer who make those products, but I don't want to think about those things. That would make me uncomfortable.

    I'm not very comfortable with my sexuality, either. Too many feelings attached to that, too. But if I tell homosexuals and women how to conduct their private lives, then maybe I can exert some control over this stuff that makes me feel bad. I think about my body and it makes me feel icky. But if I make someone else feel icky about their body, perhaps they'll shut up. And I won't have to deal.

    I'm really not comfortable with what's happening to the color of my skin, either. It used to be pale white, but now, it's starting to darken up; parts of me are speaking a language I can't understand. Makes me feel out of control. I think I'll tell everyone they have to keep to their own kind. Speak English, damnit. I can't stand feeling uncomfortable.

    The hallmark of addiction is an inability to deal with one's feelings. I could go on and on about why I think we're a nation of addicts. I think we need a major intervention, but I'm not sure we've hit bottom yet. The only problem I have is that until we collectively hit bottom, some of us are going to wind up falling a hell of a lot farther than others.

    Posted by Jérôme à Paris on April 21, 2005 at 18:18 UTC | Permalink | Comments (41)


    by beq
    (fullsize, 500kbyte)

    O, what a tangled web we weave,
    When first we practise to deceive!
    Sir Walter Scott,
    Marmion, (canto vi, stanca xvii)

    Posted by b on April 21, 2005 at 18:14 UTC | Permalink | Comments (18)