Moon of Alabama Brecht quote
October 30, 2006

WB: The Computer Ate It


After all, if the computer is going to eat all the data, why bother collecting any?

The Computer Ate It

Posted by b on October 30, 2006 at 8:24 UTC | Permalink


I still think the airlift of tons of $100 bills into Baghdad was the ultimate score.

Weren't captains given suitcases full of cash to distribute to the local villagers?

It's no wonder that billions of dollars have disappeared. On the positive tip, the IRS is too broke to investigate anyone. Looks like Billmon was right (May 6, 2005):

And when the dollar bubble finally bursts . . oh man. If you’ve ever heard the joke about the pig, the monkey and the cork, you have some idea what to expect. Which is why hopeful talk about a “soft landing” or a “smooth adjustment” makes me laugh. By now it should be obvious: We’re not going to stop until somebody or something makes us stop – just as a jumbo jet in vertical descent doesn’t stop until the ground makes it stop.

But the part of Roubini’s post I found more interesting – and the reason why I wrote this one – is his heated rejection of the Federal Reserve's official (or at least, semi-official) explanation for the jam the global economy now finds itself in.
This may seem like a dry and arcane squabble over economic terminology. But it raises some issues that go to the very heart of the question that most interests me: Why is the global capitalist economy in such a state of disequilibrium? Is it really just a function of U.S. fiscal recklessness and Asian mercantilism? Or is there a deeper structural malady at work?
Ever since I first started writing about international economics back in the early ‘90s, I’ve heard the same points lobbed back and forth: The world is forcing America to run huge deficits. If you would just liberalize your economies, we wouldn’t have this problem. No, no America is forcing others to run huge surpluses. If you saved more, we wouldn’t have this problem.
next Billmon post:
the question of whether the huge U.S. deficit – and the yawning imbalance it has created in the global economy – is the product of excessive savings [in the rest of the world] (the chicken) or excessive U.S. demand for those savings (the egg.)
Even our Chinese creditors seem to think the label on the problem should read “Made in the USA” – which hasn’t stopped them from continuing to provide the massive amounts of vendor financing needed to keep the problem from turning into a crisis.
At some point the providers of that support – the central banks of China, Taiwan, Korea and Japan, or as I prefer to call them, the Organization of Dollar Importing Countries – will be forced to pull the plug.
How did we get into this fix? In a world filled with poverty and scarcity, how could there possibly be an excess of savings? And why is so much capital flowing to the world's richest nation, instead of remaining in the developing world, where it could presumably earn a much higher rate of return?
This is not to argue – as our reality-challenged vice president likes to do – that deficits don't matter. They clearly do matter, particularly when they become so large they can no longer be financed by foreigners at rates of interest consistent with a non-imploding economy. But it's difficult to make the case that deficits have created a global shortage of savings.
They ["China, Taiwan, Korea and Japan, or as I prefer to call them, the Organization of Dollar Importing Countries"] are propping up the market because they, too, are afraid of the deflationary wolf and so far haven’t figured out another way to generate the kind of growth rates they need to stay one step ahead of it.
More competent analysts than I – such as Roubini and his colleague Brad Setser – have addressed the problems and perils of running a Keynesian monetary policy in such a fragmented system. What interests me, though, are the structural causes (if any) of the steady decline in savings and investment rates in the industrialized countries – and why those trends have saddled the global economy with such enormous imbalances. So that will be the subject of the next installment in this series.

Interesting stuff.

Posted by: jonku | Oct 30 2006 9:59 utc | 1

Hate to keep catapolting the propageda, but The Government Accountability Office has long been defanged and the former Pentagon inspector general Joseph E. Schmitz did 'a heck of a job', he learned so much and was such a superstar attack accountant that he decided to quit his post and go to work for, (Drum roll please...)

Blackwater USA.

Guess he went to the school of Enron economics...

And this ought to have a studio laugh track that comes with it...

However, Franklin C. Spinney is a former Pentagon analyst and whistleblower is still around. And if we had a real press, you wouldn't have to find these things out in obscure leftist websites.

Also see, U.S.: Pentagon's auditors absent from Iraq

Posted by: Uncle $cam | Oct 30 2006 10:02 utc | 2

Scam, about the altering documents to pass the Pentagon audit -- I've seen this kind of desperation before, where a well-funded group turns its skills to covering up.

No laugh track needed, at least if you have somewhere else to go.

I just read about the Government Accountability Office 15-year term auditor general going on a reality tour of the US, with a panel of accountants. Don't laugh, he was talking about the current 2 trillion dollar deficit ballooning to some 40 trillion over the next decade or two.

It is like those movies where you owe someone a thousand dollars and bet your last borrowed money with a crooked bookie, and lose. Not a good scene. Can't find the link right now ...

Posted by: jonku | Oct 30 2006 10:17 utc | 3

Here's the link to the comptroller general of the United States.

"This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed." ... The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it. ... Walker can talk in public about the nation's impending fiscal crisis because he has one of the most secure jobs in Washington. As comptroller general of the United States — basically, the government's chief accountant — he is serving a 15-year term that runs through 2013. ... But the backbone of his campaign has been the Fiscal Wake-up Tour, a traveling roadshow of economists and budget analysts who share Walker's concern for the nation's budgetary future. ... Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America — Bill Gates, Warren Buffett and those Google guys included.

I'm not sure if this is helpful or not ... but doom and gloom seem to be the order of the day.

Posted by: jonku | Oct 30 2006 11:18 utc | 4

Don't laugh, he was talking about the current 2 trillion dollar deficit ballooning to some 40 trillion over the next decade or two.

Why not?

Posted by: DM | Oct 30 2006 12:12 utc | 5

Why not?

yeah, why not? we can just tell the rest of the world to support us and if they don't we'll sic rummy on them.

about those weapons. i'm shocked. totally shocked.

Exactly where untracked weapons could end up — and whether some have been used against American soldiers — were not examined in the report

wow, i wonder why not? do you think anyone asked whether some of those weapons were used against iraqi civilians?
the civil war? how very generous of america to provide the means by which iraqis can make war w/themselves. what would they do without us?

Posted by: annie | Oct 30 2006 17:02 utc | 6

Does the "unseen hand" of Adam Smith economic theory only apply to "Mom and Pop" economies or does size matter? If size does not matter then we may be looking at the 'other', fist.

Posted by: pb | Oct 30 2006 18:19 utc | 7


The Iraqis had plenty of weapons before we showed up with them. So many, in fact, that we also don't know where they landed or if they are currently being used against our troops.

Posted by: ralphieboy | Oct 30 2006 18:21 utc | 8

I will boldly state that the NRA is extremely pleased that those weapons will not now have to be registered, assuring that a well armed militia will defend the Iraqi people from tyrannical rule.

Something like that...

Posted by: tmay | Oct 31 2006 0:10 utc | 9

those weapons probably never even went to iraq, or if they did, it was only to drop off some for the death squads (and possibly to the kurds, but israel likely already has that covered) and then deliver the rest elsewhere. maybe colombia? or some training camps near an oil-rich nation in africa? just guessing...

Posted by: b real | Oct 31 2006 4:21 utc | 10

@ b real #10

Good question b real, which in turn makes me wonder if a hugh cache of these arms weren't handed over to the the MEK (Mujahedin-e-Khalq) in and around Iran through Bolton's No "Inhibition" Support.

Of course, if our Tsarist Occupation Government were honest it would call it the "War on Some Terrorists," unless CCB (Chief Clearing Brush), plans to bomb the CIA headquarters in Langly, VA. If Bush was serious about making a war on terrorists, that is the first place he would bomb because they have been the worst terrorists in the last 60 years.

Posted by: Uncle $cam | Oct 31 2006 6:39 utc | 11

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