8/16/2011   glimmers of intelligence from the Wall St. Journal (j), NY Times (t) or online - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Buffett's call for taxing 'mega-rich' hits chord with Obama, AP via Boston Globe, B9.
  Warren Buffett has said the tax system in the United States has contributed to the growing gap between rich and poor. (photo caption)
  Billionaire investor Warren Buffett is calling on the “mega-rich’’ to pay more in taxes.
  Buffett said yesterday in a New York Times opinion piece that he would immediately raise rates on households with taxable income of more than $1 million, and he would add an additional increase for those making $10 million or more.
  He also recommends that the 12 members of Congress charged with devising a deficit-cutting plan leave rates for 99.7 percent of taxpayers unchanged.
  “My friends and I have been coddled long enough by a billionaire-friendly Congress,’’ Buffett wrote. “It’s time for our government to get serious about shared sacrifice.’’
  Buffett, who is chairman and chief executive of Omaha-based Berkshire Hathaway, has been calling for higher taxes on the super wealthy for several years. He has said the tax system has contributed to the growing gap between rich and poor.
  President Obama cited Buffett’s op-ed to reinforce a point he was making at a town hall meeting in Cannon Falls, Minn., about spreading the pain when drafting a plan to deal with the nation’s mounting deficit. Obama drew laughter and applause when he quoted Buffett’s line about not coddling billionaires.
  Buffett noted yesterday that the mega-rich pay income taxes at a rate of 15 percent on most investment income but practically nothing in payroll taxes. The middle class, meanwhile, typically falls into the 15 percent and 25 percent income tax brackets and is hit with heavy payroll taxes. He said Washington legislators “feel compelled to protect us, much as if we were spotted owls or some other endangered species.’’
  Buffett said most of the mega-rich he knows wouldn’t mind paying more in taxes, especially when fellow citizens are suffering.
  [- never mind that consumer spending is suffering, and all the formerlly investment-worthy marketable productivity that depends on it...]
  He also said he has yet to see anyone shy away from investments because of tax rates on potential gains, even in past decades when rates were much higher. “People invest to make money, and potential taxes have never scared them off,’’ he said.

4/10-11/2011   glimmers of intelligence from the Wall St. Journal (j), NY Times (t) or online - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Iceland Declares Independence from International Banks, by Bill Wilson, 4/11 NetrightDaily.com (item-flag credit to 7/02 Marc Landry via 7/09 Gilles Pilon).
  REYKJAVIK, Iceland – Iceland is free. And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers. On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008. At the time of the bank’s failure, Iceland refused to cover the losses. But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union.
  [What idiots have taken over the EU - they think they have any attraction when they want an impossible payback from uninvolved innocent people to have the "Inexpressible Privilege" of joining a bunch of clowns who want to tax millions more uninvolved innocent people to cancel the risk of wealthy investors who have flushed billions down toilets in Greece and Portugal and who knows what other corrupt and irresponsible polities.]
  In response, the Icelandic people have told Europe to go pound sand.
  [Icelanders should also string up a couple of their own bankers who fell for this and exposed their fellow citizens to this ridiculous pressure. They're SUPPOSED to be the smartest people in the world, with the most PhDs per capita - are we still talkin' "idiot savants" here?!]
  The final vote was 103,207 to 69,462, or 58.9% to 39.7%. “Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group that opposed the bailout
  [Wasn't America founded on a fight against "taxation without representation"? Now it's deeper in it than ever cuz the "representatives" are corrupt cowards with no polestar.]
  A similar referendum in 2009 on the issue, although with harsher terms, found 93.2 percent of the Icelandic electorate rejecting a proposal to guarantee the deposits of foreign investors who had funds in the Icelandic bank. The referendum was invoked when President Olafur Ragnur Grimmson vetoed legislation the Althingi, Iceland’s parliament, had passed to pay back the British and Dutch.
  [So, a parliament full of cowardly crooks, but there was one man with a clue about fairness and cartload of courage - thankgod he happened be to the President with veto power over the slimy Things from the Althingi. Can we assume that Icelandic voters will take a flamethrower to these pieces of crap at their earliest opportunity?]
  Under the terms of the agreement, Iceland would have had to pay £2.35 billion to the UK, and €1.32 billion to the Netherlands by 2046 at a 3 percent interest rate.
  [Shame on the UK and the Netherlands for their part in this travesty. There are more and more suckers for The Big Lie when it's couched in intimidating mathematics, economics and unimaginably huge numbers. As the wealthiest humans get stupider and more suicidal - everyone else first - everyone needs to get a lot smarter and more abrupt with these dolts who sacrifice function for symbol, and exchange what works for what merely puts them a notch higher in an extreme, dysfunctional, unsustainable, obscene and kinda pathetic pecking order.]
  Its rejection for the second time by Iceland is a testament to its people, who feel they should bear no responsibility for the losses of foreigners endured in the financial crisis.
  That opposition to bailouts led to Iceland’s decision to allow the bank to fail in 2008. Not that the taxpayers there could have afforded to. As noted by Bloomberg News, at the time the crisis hit in 2008, “the banks had debts equal to 10 times Iceland’s $12 billion GDP.”
  “These were private banks and we didn't pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks,” Iceland President Olafur Grimsson told Bloomberg Television.
  The voters’ rejection came despite threats to isolate Iceland from funding in international financial institutions. Iceland’s national debt has already been downgraded by credit rating agencies, and now those same agencies have promised to do so once again as punishment for defying the will of international bankers.
  This is just the latest in the long drama since 2008 of global institutions refusing to take losses in the financial crisis. Threats of a global economic depression and claims of being “too big to fail” have equated to a loaded gun to the heads of representative governments in the U.S. and Europe. Iceland is of particular interest because it did not bail out its banks like Ireland did, or foreign ones like the U.S. did.
  If that fervor catches on amongst taxpayers worldwide, as it has in Iceland and with the tea party movement in America, the banks would have something to fear; that is, the inability to draw from limitless amounts of funding from gullible government officials and central banks. It appears that the root cause is government guarantees, whether explicit or implicit, on risk-taking by the banks.
  Ultimately, such guarantees are not necessary to maintain full employment or even prop up an economy with growth, they are simply designed to allow these international institutions to overleverage and increase their profit margins in good times — and to avoid catastrophic losses in bad times.
  The lesson here is instructive across the pond, but it is a chilling one. If the U.S. — or any sovereign for that matter — attempts to restructure their debts, or to force private investors to take a haircut on their own foolish gambles, these international institutions have promised the equivalent of economic war in response. However, the alternative is for representative governments to sacrifice their independence to a cadre of faceless bankers who share no allegiance to any nation.
  It is the conflict that has already defined the beginning of the 21st Century. The question is whether free peoples will choose to remain free, as Iceland has, or to submit.
  Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at@BillWilsonALG.

• Good and boring? - Learning from worthwhile Canadians, op ed by Paul Krugman, 2/01 NYT, A17.
  In times of crisis, good news is no news. Iceland’s meltdown made headlines; the remarkable stability of Canada’s banks, not so much.
  Yet as the world’s attention shifts from financial rescue to financial reform, the quiet success stories deserve at least as much attention as the spectacular failures. We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model.
  Yes, I know, Canada is supposed to be dull. The New Republic famously pronounced “Worthwhile Canadian Initiative” (from a Times Op-Ed column in the ’80s) the world’s most boring headline. But I’ve always considered Canada fascinating, precisely because it’s similar to the United States in many but not all ways. The point is that when Canadian and U.S. experience diverge, it’s a very good bet that policy differences, rather than differences in culture or economic structure, are responsible for that divergence.
  And anyway, when it comes to banking, boring is good.
  First, some background. Over the past decade the United States and Canada faced the same global environment. Both were confronted with the same flood of cheap goods and cheap money from Asia. Economists in both countries cheerfully declared that the era of severe recessions was over.
  But when things fell apart, the consequences were very different here and there. In the United States, mortgage defaults soared, some major financial institutions collapsed, and others survived only thanks to huge government bailouts. In Canada, none of that happened. What did the Canadians do differently?
  It wasn’t interest rate policy. Many commentators have blamed the Federal Reserve for the financial crisis, claiming that the Fed created a disastrous bubble by keeping interest rates too low for too long. But Canadian interest rates have tracked U.S. rates quite closely, so it seems that low rates aren’t enough by themselves to produce a financial crisis.
  Canada’s experience also seems to refute the view, forcefully pushed by Paul Volcker, the formidable former Fed chairman, that the roots of our crisis lay in the scale and scope of our financial institutions — in the existence of banks that were “too big to fail.” For in Canada essentially all the banks are too big to fail: just five banking groups dominate the financial scene.
  On the other hand, Canada’s experience does seem to support the views of people like Elizabeth Warren, the head of the Congressional panel overseeing the bank bailout, who place much of the blame for the crisis on failure to protect consumers from deceptive lending. Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending.
  Above all, Canada’s experience seems to support those who say that the way to keep banking safe is to keep it boring — that is, to limit the extent to which banks can take on risk. The United States used to have a boring banking system, but Reagan-era deregulation made things dangerously interesting. Canada, by contrast, has maintained a happy tedium.
  More specifically, Canada has been much stricter about limiting banks’ leverage, the extent to which they can rely on borrowed funds. It has also limited the process of securitization, in which banks package and resell claims on their loans outstanding — a process that was supposed to help banks reduce their risk by spreading it, but has turned out in practice to be a way for banks to make ever-bigger wagers with other people’s money.
  There’s no question that in recent years these restrictions meant fewer opportunities for bankers to come up with clever ideas than would have been available if Canada had emulated America’s deregulatory zeal. But that, it turns out, was all to the good.
  So what are the chances that the United States will learn from Canada’s success?
  Actually, the financial reform bill that the House of Representatives passed in December would significantly Canadianize the U.S. system. It would create an independent Consumer Financial Protection Agency, it would establish limits on leverage, and it would limit securitization by requiring that lenders hold on to some of their loans.
  But prospects for a comparable bill getting the 60 votes now needed to push anything through the Senate are doubtful. Republicans are clearly dead set against any significant financial reform — not a single Republican voted for the House bill — and some Democrats are ambivalent, too.
  So there’s a good chance that we’ll do nothing, or nothing much, to prevent future banking crises. But it won’t be because we don’t know what to do: we’ve got a clear example of how to keep banking safe sitting right next door.

1/10-11/2010   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Ballot Issues Attest to Anger in California, by JENNIFER STEINHAUER, NY Sunday Times (NYT), A1.
  [Direct democracy is covered in Phase One of the Timesizing Program.]
  This is the third in a series of articles that examine how California’s multibillion-dollar budget crisis is changing the state.
  LOS ANGELES, Calif. — From San Diego to Mount Shasta, voters are expressing mounting disgust over California’s fiscal meltdown and deteriorating services, and they are offering scores of voter initiatives that seek to change the way the state does business.
  Gov. Arnold Schwarzenegger greeting Robert Hertzberg of California Forward, which seeks to change the state's budget processes, before the governor's State of the State address last week.
  Over 30 such initiatives — among over 60 total initiatives so far — are now wending their way toward the ballot box. Every day, it seems another vexed voter adds a proposal to the fray.
  Some verge on the radical, like one to establish the state’s first constitutional convention in over a century, to rewrite California’s most fundamental legislative rules. There are initiatives in circulation that would reduce the time the Legislature is in session, punish legislators for late budgets and criminalize “false statements about legislative acts.”
  Other states, of course, are also suffering through red ink, but none have quite the same mechanism as California’s to let voters get involved with the process. Despite the fact that past initiatives helped get California into its budget crisis — forcing spending in some areas while limiting taxation in others —
  [Californians are still in the babyhood of direct democracy. The first groundrule that must be built into the constitution of a state or nation that would move into the 21st century of direct democracy is, No spending proposal without a prior-accompanying funding proposal. This was the enlightened policy of Luigi Einaudi, prime minister of Italy after World War II, as told to us by Prof. Paul Rosenstein-Rodan in his History of Economic Ideas class around 1980 at Boston University.]
  the pileup of new ones suggests that many voters still believe they hold the solution to the state’s mess. Few seem to believe that elected officials are up to the job.
  Some initiatives, in fact, could even limit the initiative process itself, or erase old ones.
  The number of initiatives so far, while high, is not the largest in history. But the rage that underlies them has not been seen in decades, said lawmakers, pollsters, political consultants and the proponents.
  “The feeling is one of revolt,” said John Grubb, the campaign director for Repair California, a coalition behind a pair of initiatives to call a constitutional convention. “And come January, they will start negotiating the budget again, and there will be more fear and loathing. The feeling here is that California state government is broken, and we need not a little fix, but a big fix.”
  Most of the initiatives seek a spot on the November ballot, when voters will choose a new governor and other statewide officials. And while many of the measures will fail to get enough signatures to make it to Election Day, the sheer number of change-centered ideas reflects California voters’ frustration.
  In 2009, lawmakers struggled to close billions of dollars’ worth of budget gaps. The net result was service reductions — from longer lines at the Department of Motor Vehicles to the loss of dental benefits for Medicaid recipients — as well as widespread furloughs for state workers and the rare use of i.o.u.’s issued to vendors and residents who were owed tax refunds.
  But California is still projected to be $20 billion in the red over the next 18 months, and some state services are already showing the scars from their cuts.
  The public university system, once the crown jewel of California, is struggling with layoffs, tuition increases and outright student and faculty revolts. In the public secondary schools, classroom sizes have swelled and program cuts are rampant.
  And everything costs more: sales taxes went up last year, as did many user fees.
  On Friday, Gov. Arnold Schwarzenegger released his latest executive budget, with pay reductions for state workers and more draconian service cuts.
  California voters are distinctly unimpressed with the roles played in the crisis by the governor and legislators. Many lawmakers cater to the fringe elements of their respective political parties and are beholden to special interests that finance their campaigns. A paltry 13 percent of registered voters approve of the job the Legislature does, according to a poll by the Public Policy Institute of California.
  And so the efforts to take matters into their own hands.
  “It is a very California moment,” said Robert Hertzberg, co-chairman of California Forward, a group of business, political and academic leaders that seeks to change the state’s budget processes. “It is almost like there are a bunch of weapons on the battlefield, and the bullets will be the funding of these initiatives.”
  The governor has embraced California Forward’s proposals.
  To get an initiative on the ballot, a person or group pays a $200 fee, gets approval of the text from the state attorney general’s office, and then has 150 days to collect hundreds of thousands of signatures [how many exactly? = lazy reporting!], which must be rigorously verified against voter registration records.
  Throughout the decades, initiatives have followed the changing concerns of voters. In the 1930s, for instance, many dealt with liquor regulations, and in the 1970s and early ’80s, taxation was a principal concern. The most famous initiative of that era was Proposition 13, which put a cap on property taxes. In the past 20 years, criminal justice and civil rights issues have often been on the ballot.
  “Government reform has been a repeated theme over time,” said Nicole Winger, a spokeswoman for the secretary of state’s office, which manages the initiative process. “Now those measures are on the rise again.”
  The initiatives concerning the state budget are most in the spotlight, particularly the one that calls for a convention to rewrite the state’s constitution. Delegates to such a convention would quite likely change the law requiring a two-thirds vote in the Legislature to pass a budget, and they could impose limitations on the initiative process and undo earlier initiatives that require spending for certain programs.
  A constitutional convention could also alter the balance of power between state and local governments by giving cities greater control over their portion of the state budget. Many critics of the current system deplore Sacramento’s centralized spending power and policy making for issues like education and local public safety.
  Other ballot efforts would put stringent spending limits on the government, require a rainy-day fund and end $2 billion in corporate tax breaks.
  Much of the anger in the ballot ideas is aimed straight at the Legislature. There are proposals to cut the pay of lawmakers in half and to prohibit them from voting on legislation that would have a financial impact on their contributors. (One that would force them to get drug tests recently failed to pass muster.)
  Gabriella Holt, president of Citizens for California Reform, an advocacy group behind proposals to cut the pay of the Legislature and shorten its term, said, “We decided we should put the question to voters.”
  “I think people are very, very angry and very, very frustrated,” Ms. Holt added, “and they want to send a message that they want to take back their government.”
  Placing the Legislature in the ballot cross hairs may be of questionable effectiveness. But last spring, the only one of six ballot measures to succeed was one that prevented lawmakers and other high-ranking officials from getting raises in times of fiscal distress.
  One initiative would even redraw the boundaries of Congressional districts, in order to make those races more competitive.
  “There is a great deal of voter unhappiness with the dysfunction of their Legislature generally,” said the plan’s proponent, Charles T. Munger, who donated more than $1 million toward a successful 2008 initiative to redraw state legislative districts, “and some of that is fueling the general voter’s desire to see reform of the political process.”
  He added: “The gerrymandering of districts is a national problem. But this is my state, and I am trying to fix it here.”
  Whatever the outcome of these initiatives, the end of the year is almost certain to bring change to California, whether it is modest adjustments to the way the state passes its budget or a full-scale constitutional convention.
  “Lots of people are unhappy, but for so many different and conflicting reasons that it is hard to envision where we will end up,” said Bruce E. Cain, a professor of political science at the University of California, Berkeley. “It could be a chaotic jumble.”

10/17/2009   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• In Britain, a Soaring Deficit Lifts a Hawk, by Landon Thomas Jr., NYT, B1.
  George Osborne speaking on Oct. 6 at the Conservative Party conference in Manchester. He said he believed voters were ready to return the Tories to power. (photo caption)
  MANCHESTER, England — It’s the deficit, stupid.
  That was the message, though not in exactly those words, that George Osborne, the ambitious finance minister-in-waiting for the Conservative Party, delivered to the Tory faithful here earlier this month as he warned of Britain’s mushrooming debt burden.
  “The government borrowed too much, the banks borrowed too much,” he said in a long-awaited speech at the party conference setting out the Conservative agenda going into next spring’s election against the Labour government of Prime Minister Gordon Brown. “Let’s tell the truth: We all borrowed too much. We are sinking in a sea of debt.”
  It is rare for a major party anywhere to run for office on a platform of pain and penny-pinching. But Mr. Osborne and his fellow Tories, in adapting a variation of James Carville’s unofficial slogan in 1992 that carried Bill Clinton to victory, are betting that voters will not just accept a dose of harsh medicine but will actually appreciate his honesty in offering it.
  Mr. Osborne has even gone against a core Tory constituency, the wealthy financiers who fill the offices in the City of London, by saying that he will not reduce the top 50 percent tax rate recently imposed by Labour on Britain’s richest.
  “We have to show that we are fair to all parts of society,” Mr. Osborne said in an interview in Manchester. “It would be impossible to cut taxes now while we are asking others to sacrifice so much.”
  It is a cheeky, unproven strategy.
  Republicans in the United States are also focusing on the country’s similarly large deficit, forecast at 12.3 percent of gross domestic product this year, the highest since World War II. So the extent to which Mr. Osborne can persuade the British public to embrace a program of reduced social services and public-sector wage freezes — without base-rallying tax cuts — may serve as a model for a 2012 campaign against President Obama.
  At the moment, because of the sharp economic recession here and widespread disenchantment with the Labour Party, the Conservatives are far ahead in the polls. They are widely expected to return to power after more than a decade out of office.
  But that may be the easy part. As Mr. Osborne made clear in his speech, Britain, whose currency in recent months has taken a beating even worse than the dollar has, is expected to generate a deficit of 13 percent of G.D.P. this year, with its government debt forecast to reach 100 percent of G.D.P. by 2014, according to the International Monetary Fund.
  By comparison, the debt burden in the United States is forecast to increase to 66 percent, from about 40 percent, over the same period, according to the Congressional Budget Office.
  Just this week, the European Commission termed Britain’s debt “unsustainable” in a devastating report that compared public finances here to those of countries like Ireland, Latvia, Lithuania and Romania.
  According to the report, which has been latched on to by the Conservatives as a further sign of Britain’s economic decline, the government needs to find £200 billion.
  Mr. Osborne, in setting out the Conservative fiscal agenda, is playing bad cop to the good cop role of David Cameron, the Tory leader. And with his penchant for delivering bad news with little sugarcoating, it is no surprise that Mr. Osborne, who is just 38, almost proudly confesses that he is looking forward to being the most reviled man in Britain.
  “You have to be honest with people,” Mr. Osborne said in the interview. “There is so much distrust in the system that I believe there is a premium on straight talking.”
  Mr. Osborne, though, is not a naturally gifted political salesman. Indeed, while his Tory colleagues were inclined to push into the conference crowd, he tended to keep his distance. And on television, he often projects the clammy, awkward persona of a schoolboy making his first speech.
  Mr. Cameron, who is close to Mr. Osborne and comes from a similar background, has transcended the ignominy of his membership in the Bullingdon Club, the elite drinking enclave at Oxford. By contrast, Mr. Osborne seems far less removed from the haughty picture of himself and his club members, garbed in bow ties and tails, that has come to define the view that the recast Conservatives still lack a common touch.
  What Mr. Osborne does not lack, however, is what even his toughest critics recognize as an acute sense of how to play for keeps in the rough and tumble sandpit of British politics that is at odds with his aristocratic demeanor.
  The first of his political calculations came during his early teenage years when he had his name legally changed from Gideon to George, explaining to a schoolmate at the time that one could not become prime minister with a name like Gideon.
  But it is the more recent gamble — persuading Mr. Cameron that the Tories must relentlessly attack Mr. Brown on Britain’s debt — that will most likely define him and the Conservative Party, for better or for worse.
  It has left him open to plenty of personal attacks from the party in power.
  “Cutting spending at the height of a recession — I have never heard of such nonsense,” said Peter Mandelson, the business secretary, who has been a senior strategist to Mr. Brown and his predecessor, Tony Blair. “This is not an economic philosophy; it is crude objectionism.”
  Even in the financial district, concerns have been raised that Mr. Osborne is too doctrinaire.
  “He comes across as callow and rich,” said Andrew Hilton, who runs CSFI, a research center focused on financial issues. “The City wants Labour out, but there is trepidation. If we cut spending right now it would be a lot worse.”
  At a luncheon for Tory business supporters, Mr. Osborne struck a more relaxed tone. But his main focus was the same.
  Britain’s deficit “is a clear and present threat; we have to deal with it,” he said. Acknowledging the tough measures he laid out during his speech and the criticism that followed, he added: “You have to bring the public with you. To get elected on a false prospectus would be catastrophic. All this will help ensure a democratic mandate.”
  To meet his goals, Mr. Osborne will have to rely on financial institutions in London and abroad (close to 40 percent of Britain’s debt is held by foreigners) to keep buying government bonds at reasonable interest rates.
  “Osborne is dealing with the hard realities,” said Michael Hintze, a prominent Tory financial supporter and founder of the hedge fund CQS, who suggested that Mr. Osborne would bring a much-needed business sensibility to the challenges facing the British government. “It is a U.K. P.L.C. issue at this point. You can’t just keep spending.”

10/11/2009   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Enough with the bright side - Positive thinking can be dangerous, says Barbara Ehrenreich, book review by Jenna Russell of Ehrenreich's "Bright-sided: How the relentless promotion of positive thinking undermined America," 10/11 Boston Sunday Globe, K3.
  [This is important when we're still defining as "good news" a rate of bad news that is not a much as expected. So at last, this article presents an antidote to the everlasting cheerleading and happytalk from our "leaders," so averse to negative feedback which is the most important kind that signals needed change that they have virtually excluded adaptability from our economy. Thus we have a large complex system with no adaptability and therefore it is certainly doomed.
  [The two minimum necessary core modifications for survivability are: (1) automatic overtime-to-jobs conversion on an (A) company basis and (B) individual basis, and (2) automatic workweek adjustment against un(der)employment. These two essential modifications need to be sandwiched between two minimal, protective, public-participation modifications: (i) regular binding democratic referendums with auditable paper trails (a) to focus the affected population by defining the key problem of un(der)employment and (b) to block sabotage from central bankers by moving their arbitrary functions such as rate setting to the entire market, ie: the public, and (ii) regular auditable binding democratic referendums to block leakage or 'damburst' from population variables, namely imports, immigrants (and their flipside, outsourcings), and births. (And a regular referendum to signal when rising expectations require us to move on to the next program of minimal modification.]
  IT’S HARD TO imagine a more virtuous-seeming subculture than the pink-ribboned world of breast cancer support and survivordom, where T-shirts and 10K races invoke messages of courage, sisterhood, and perseverance.
  So it comes as a shock when writer Barbara Ehrenreich starts her new book by launching an assault on the pink ribbons: Not only does the forced, “smile or die” cheerfulness of the breast cancer culture infantilize women, she argues, it can do them harm, by making them feel guilty for “failing” to heal themselves by staying positive.
  Belief in the power of positive thinking - the idea that we can prosper, stay healthy, and live the lives we dream of simply by focusing on what we want and banishing doubt - has come to seem fundamentally American. But Ehrenreich sees it as something else, too: a dangerous invitation to dodge reality. In her new book, “Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America,” Ehrenreich documents the destructive power of the happy-think movement in numerous corners of American life, from the motivational speakers and megachurch pastors who exhort their followers to visualize wealth (and good tables in restaurants) and then go “get what’s yours” to the Wall Street giants who ignored signs of trouble, demoted naysayers, and led the country into economic collapse.
  The problem, Ehrenreich argues, isn’t optimism per se, but the notion that fear and doubt serve no useful purpose - that success requires ridding yourself of all dark thoughts and critical people, shutting off the news (too negative), and paying attention only to one’s own desires and feelings. Ehrenreich, best known for chronicling the struggle of the underclass in “Nickel and Dimed: On (Not) Getting By in America,” makes a case not for pessimism, but realism: “A vigilant realism does not foreclose the pursuit of happiness; in fact, it makes it possible,” she writes. “How can we expect to improve our situation without addressing the actual circumstances we find ourselves in?”
  She spoke to Ideas by phone from her home in Alexandria, Va.
  IDEAS: Was it your own experience with breast cancer that made you want to write this book?
  BE: Definitely. I wrote something about it while I was undergoing treatment, but then I put it out of my mind. I thought it was just that pink-ribbon culture. Then a couple years later, I was going to motivational workshops with laid-off white-collar workers, and I thought, Oh my God, this is it all over again - people in a terrible time in their lives being told that they ought to be upbeat and positive about it.
  IDEAS: What is positive thinking, as you see it, and what’s so bad about it?
  BE: I think of it as an ideology that says we have to work on ourselves to be positive, optimistic and upbeat, and that that will make us healthier
  [note the potential linkage to blaming the victim!]
  - will help us recover from cancer for example. Where it begins to get a little wacky is in saying that you can actually have anything you want by concentrating on it enough, because positive people attract positive things to themselves. I was seeing it applied to people who were really having serious problems, such as cancer or having lost a job, and they were being told it’s all in your mind - whatever happens to you comes from your attitude and thoughts {hellip} I think it’s kind of cruel to tell people who are suffering, and did not in any way bring it on themselves, that you just have to change your attitude and you’ll be OK.
  IDEAS: A lot of people just find it more pleasant to be around people who are positive.
  BE: Well, negative people are culled out. In the workplace, for example, they may be fired just for raising too many questions or being too critical. So yes, sometimes it’s irritating to be around somebody who doesn’t say every idea you have is brilliant, who says instead, I have these doubts. But I want to be with the person who has the doubts.
  IDEAS: Has the widening gap in American incomes made people more susceptible?
  BE: I would say positive thinking has made people less angry about inequality. The best recent example [during the 2008 presidential campaign] was Joe the Plumber, who objected to the possibility of taxes being raised on people making more than $250,000 a year, although he was an unlicensed assistant plumber, and his chances of ever getting into that category seemed pretty remote. But if you think positively, why, you’re always just about to be rich yourself.
  IDEAS: You spent some time at conferences for motivational speakers. Did you ever find yourself feeling fired up in spite of yourself?
  BE: No. And I think I was open to it. I wanted to feel the love, or feel what people were supposed to feel, but unfortunately, I’m saddled with this rational mind. At one conference in 2007, there was constant talk about how quantum physics explains how you can have anything you want just by thinking about it. That just infuriated me. I have very scant formal exposure to quantum physics, but I have some notion what it’s about, and it’s not about my being able to have that necklace in the jewelry store window.
  IDEAS: And you found the same attitudes when you visited megachurches?
  BE: The old guys, like Jerry Falwell, were all about sin and fire and brimstone. But if you go to Joel Osteen’s church, you’re not going to get any of that disturbing stuff. It’s all about how you can get what you want - it’s like God as personal servant. Osteen, America’s most successful preacher, will describe how God will get him a better parking space.
  IDEAS: Why is his message so popular?
  BE: Well, it’s certainly better than being told that you’re bad, and you have to struggle against your sins.
  IDEAS: You make a convincing case that this kind of thinking contributed to the economic meltdown.
  BE: There were other factors, like sheer greed and the speed of transactions and new financial products, but I think it probably would not have happened if we had not been swept up in this culture of positive thinking. For ordinary people, this meant accepting levels of debt that are really scary, and using your house to get more cash. {hellip} I like to imagine that someone at the top is clear-headed, but at the upper levels of Wall Street, they too seemed to be in the grip of this delusional thinking.
  IDEAS: For the person who gets laid off, who has to get up out of bed and find a new job, I can’t help thinking that thinking positively might be an advantage.
  BE: I think there is yet another way of thinking, that’s not, “Oh yes, everything will be all right because I think it will,” but a way that involves determination, where you understand that things are really against you, and still you’re going to keep trying.
  IDEAS: Did working on this make you feel like a curmudgeon?
  < BE: (Laughs.) I’ve had to fight the accusation at times. I did feel somewhat isolated at the beginning, because it’s like going up against {hellip} everything. It’s like coming out and saying “I hate peace, and I hate Ellen DeGeneres.” It sounds wacko.
  IDEAS: Clearly the forces of positive thinking are strong. Do skeptics just have to grin and bear it?
  BE: Well, I’ve taken the rather unusual stand of saying that it’s something noxious, that it’s become something dangerous in our culture. I’m saying this is not just a benign way of reassuring ourselves, that this has led to not seeing very bad things coming, and trusting the wrong people - and can we wake up from that, not to being depressed or pessimistic, but to being realistic, and trying to really see what we’re up against in the world.
  Jenna Russell is a reporter for the Globe. E-mail jrussell@globe.com

9/10/2009   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Income gap shrinks in slump at the expense of the wealthy, WSJ, A1.
  The deepest downturn in the U.S. economy since the Great Depression may finally shrink the gap between the very best-off Americans and everyone else.
  If so, it won't be by lifting up the bottom. It will be by pulling down the top.
  Over the past 30 years, chief executives, Wall Street bankers and traders, law-firm partners and such amassed ever-greater incomes, while the incomes of factory workers, teachers, office managers and others in the middle grew much more slowly. In 2007, the top 1% of U.S. families accounted for 23.5% of all personal income in the U.S., according to economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics. That was a level not seen since the Roaring Twenties.
  The top 1%'s share appears to be falling fast. Mr. Saez and other economists expect income going to the top 1% of taxpayers -- currently, those with about $400,000 a year -- will drop to somewhere between 15% and 19% of all income by 2010. That still would leave income distribution more top-heavy in the U.S. than in many other countries.
  One early indication: Median chief-executive pay at companies in the S&P 500 fell 15% in 2008 (to $7.3 million), according to University of Southern California pay expert Kevin Murphy.
  "Based on past experience, it looks like inequality will go down and change the long-term trend of America becoming a less egalitarian society," says Ariell Reshef, a University of Virginia economist and another student of the equality issue.
  This is among several potentially far-reaching changes wrought by the bursting of the housing and credit bubbles and the deep recession that ensued. Finance is likely to claim a smaller share of the nation's talent and make up a smaller part of the economy. The relationship between employers and employees may shift, and some workers will never fully recover from the blows they have suffered. Borrowing will be harder for many, and in any case, reducing debt instead of increasing it will hold new priority, possibly for a long while. In time, the past two years may be seen as a watershed in Americans' behavior and the nation's economic life.
  At the same time, the income gap, after narrowing during the 1991 and 2001 recessions, quickly widened again later. That could happen again. New York University economist Edward Wolff says that if efforts in Washington to rein in executive pay, impose new regulations and raise tax rates on capital gains don't succeed, investment and CEO riches could snap back.
  Still, the recession that began in December 2007 has been of a different animal from those of 1991 and 2001, in that it followed a credit bubble that had sent incomes of finance executives soaring far above those of other engineers and other highly skilled people. The finance and insurance industries, which accounted for 5.9% of gross domestic product in 1990, rose to 8.1% in 2006, according to Moody's Economy.com. That fell to about 7.5% of the economy in 2008, the firm says; it estimates the figure will slip to 7.2% this year.
  New York University economist Thomas Philippon and Virginia's Mr. Reshef estimate 30% to 50% of the extra pay received by finance-industry workers reflected a bubble in the sector.
  Less income flowing to the top could have broad effects, from the amount of revenue the government collects to the kinds of cars piling up on dealers' lots. For instance, the top 1% of earners will pay 36% of all federal individual income taxes this year, according to an estimate from the Tax Policy Center, a Washington think tank. If their income softens, so will federal revenue, making budgets harder to meet.
  Less income for the wealthy could lead to a reshaping of the luxury-goods economy, what some call the plutonomy. Half of U.S. consumer spending came from the top 20% of earners in 2000, according to economists Dean Maki and Michael Palumbo. Sales of all luxury goods are expected to decline 15% this year, according to consulting firm Bain & Co.
  Among big-ticket items, U.S. sales of Bentleys, Maseratis, Maybachs and Lamborghinis have fallen over 50% this year, much worse than the 26% drop for the broader car market, according to Autodata Corp.
  Another loser: philanthropy. In the brutal second half of last year, the number of charitable gifts of $1 million or more from individuals fell by more than a third from a year earlier, according to the Center on Philanthropy at Indiana University.
  Outsized pay will surely live on for some -- in sports, in entertainment and on Wall Street. But there are reasons to believe that on the whole there will be less for people at the very top, not only in this feeble economy but for some time after the financial system heals.
  For one thing, the Obama administration and the Democrats who control Congress are pressing for regulatory changes and tax increases that target the wealthiest and eyeing restraints on corporate compensation.
  In addition, the scaling back in the size of the finance sector, at least in the near term, puts a damper on the kind of riches the industry created over the past decade. Mr. Reshef estimates that 21% of the increase in overall income inequality from 1980 to 2005 was attributable to rising compensation in the finance industry. Generally lower leverage and risk-taking on Wall Street serve to shrink the pot of gold from finance.
  All this would be welcomed by some, particularly on the left. But reduced rewards at the top also "could diminish incentives for talented people and stifle a certain kind of innovation," says Michael Spence, a Stanford economist and Nobel laureate.
  One member of the top 1%, Charles McDaniel, CEO of a Virginia moving company called Hilldrup Cos., is blunter. "When high-wage earners make less, at some point they'll say all the policies are stacked against them," he says. "They won't take risks [and] you won't have jobs created or new opportunities."
  The leveling of incomes is no abstraction to people like Anthony Carmenate, a son of Cuban immigrants who worked his way from a boyhood job at a Chinese laundry in Hoboken, N.J., to the top ranks of Bank of America's asset-management business.
  After graduating from Montclair State University in New Jersey, where he paid his way by tending bar, Mr. Carmenate got a job at a call center for Alliance Capital, a predecessor of AllianceBernstein. He sold mutual funds to brokers and rose to become head of U.S. product management. In 2003, Bank of America recruited him to help manage a new unit called Banc of America Capital Management.
  He bought a five-bedroom colonial home in the Boston suburb of Natick. His wife, Angela, managed the home and raised the couple's three children. The Carmenates didn't consider themselves big spenders, but, with an income of more than $500,000 a year, they began to splurge. She bought Coach handbags and designer shoes. He bought a BMW and Land Rover. When they took their kids to Disneyland or the Jersey shore, they sometimes paid to bring along a baby sitter.
  This spring, the 42-year-old Mr. Carmenate was laid off, and he has struggled to find a job at anywhere near his former pay. He meets with ex-colleagues, calls headhunters and taps his personal network, but, with banks wiping out layers of management, he says, "whenever I get a lead, I find that there is a sea of people like me applying for the same one." He has started to do some consulting work.
  "I'm an optimistic guy," he says. "But salaries like mine aren't likely to come back anytime soon. It's simple: Wall Street doesn't need as many people as it used to."
  Although nine large banks gave million-dollar bonuses to nearly 5,000 individuals last year, according to a July report by New York's attorney general, the report also showed that the banks' total pay and benefits declined nearly 11% from 2007.
  The country has seen large shifts in income distribution before. In the 1930s, top earners were battered by the bursting of the financial markets, and New Deal regulation and taxes helped narrow the gap further. The top 1% of U.S. families had 23.9% of pretax income the year before the crash of 1929. By the time World War II ended, their share was less than 13%, where it stayed for some 35 years, professors Saez and Piketty calculate.
  Starting around 1980, a mix of deregulation, technological change and globalization produced larger markets and fatter payouts at the top. Median CEO pay at large companies rose by a factor of six between 1980 and 2005, after accounting for inflation, say economists Carola Frydman of Massachusetts Institute of Technology and Raven Saks of the Federal Reserve. By 2007, the top 1%'s share of income had swollen to about as high as it was before the 1929 crash.
  The gains at the top didn't necessarily come at the expense of others, because the economy expanded greatly after 1980, letting incomes grow across the spectrum. But those at the top end rose more rapidly. In 1980, for instance, the income of the top 5% of households was 2.86 times median incomes; by 2007, it was 3.52 times the median. In other words, the gap widened by 23%, Census data show.
  At the same time, the amount of mobility up and down the American income ladder has remained largely unchanged over the years, according to most academics who have studied the issue. The rate has been relatively unchanged since 1969, says the Pew Charitable Trust.
  Among the factors putting pressure on incomes at the top now is a shift in the political winds in Washington. Tax changes pushed by President George W. Bush after the 2001 recession reduced income taxes disproportionately on wealthier Americans. President Barack Obama, by contrast, campaigned on a pledge to use the tax code to reduce inequality, and he hopes to limit the Wall Street risk-taking that fed huge paydays. The White House and Congress are taking aim at executive compensation, with a federal pay czar scrutinizing compensation at some companies in which the government invested.
  White House economist Austan Goolsbee says that "this isn't Robin Hood. The president's policy is not about trying to prevent incomes from growing in the top 1%," The administration argues that higher tax rates on wealthier Americans would pay for needed investments.
  Pressure on pay at the top extends well beyond finance. At law firms, billings ballooned earlier this decade, and law-firm salaries accounted for 1.5% of all U.S. salaries in 2007, twice the share in 1980, according to Economy.com. The firm expects this to fall to 1% in 2018.
  Darren Tucker, a 36-year-old antitrust attorney in Washington, was rising at O'Melveny & Myers, earning about $400,000 last year as a "counsel." That was one rung below partner, where annual payouts average about $1.5 million. But earlier this year, his boss told him he shouldn't expect to make partner anytime soon, in part because business was slowing.
  Having already seen a round of layoffs, he leapt at a chance for a job at the Federal Trade Commission paying $153,000. "What was keeping me at O'Melveny & Myers was the big salary to come," Mr. Tucker says. His former boss at the firm, Richard Parker, says he helped Mr. Tucker land the FTC job and praises his legal skills.
  Mr. Tucker and his wife have been spending $100,000 a year for treatment for their two children, who he says were diagnosed as autistic. With the job shift, says his wife, Anne, they have moved one child, who has greatly improved, into public school. For the first time in years, she is looking for a job, as a substitute teacher.
  The wealth boom of the past decade was also fueled by entrepreneurs and family companies -- beneficiaries of easy credit, economic growth and rising asset values. Many of them, too, are taking a hit.
  A world away from Wall Street, Mr. McDaniel, whose family owns the Hilldrup moving-and-storage firm in Stafford, Va., is used to luxuries. "I like to be well treated," he says. He has hopscotched to high-priced vacations in five-star hotels: skiing in Colorado in winter, snorkeling in the Caribbean in the spring and fly-fishing in Wyoming or Montana in the summer. The burly Mr. McDaniel, a 45-year-old former University of Virginia star linebacker, is also a regular, with his teenage son, at Super Bowls, and sometimes charters planes for East Coast trips. He drives an Audi A8 L, a model that starts at about $75,000.
  When the economy is humming, "psychologically you're on a high, and the business supports that high," he says.
  This year, Mr. McDaniel worries that the family company's revenue of about $100 million may drop by 20%. To cut costs, he is turning salaried drivers and packers into independent contractors, paid by the move. For those still on salary, he is freezing pay and suspending 401(k) contributions.
  This summer he rented a house on a North Carolina beach rather than jetting to Jackson Hole, Wyo.
  Among those sharing in the income setback at the top will be the charities to which Mr. McDaniel commonly gives. "If my business is off 20%, my salary may be off 20%, so my charitable giving should be off 20% too," he says.
  Write to Bob Davis at bob.davis@wsj.com and Robert Frank at robert.frank@wsj.com

8/15/2009   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Seeds: Nature's Microships - Home gardeners reap huge returns as the Old Economy is new again, op ed by CEO George Ball of Burpee Seeds, WSJ, A13.
  Once introduced, Americans invariably inquire what business you're in. While foreigners find the question a bit crass, it's second nature to us. The question reflects our work ethic on the one hand, and our democracy on the other: It's not who you are but what you do that defines you. We mean business.
  Wall Street high-fliers—investment bankers, brokers and hedge fund profiteers, elaborately upholstered all—tend to regard my business as impossibly outmoded and arcane. Seeds? Plants? Do I, perhaps, belong to the Flat Earth Society as well?
  When I'm at a social function, I invariably find myself chatting with a Wall Street tribe member. Jared, let's call him, since that's always his name, is a player. A pink-cheeked master of the universe fluent in junk bonds, zero-coupon bonds, REITs and interest rate swaps; he knows what business is all about. His world is one where funds appear from somewhere, most of them go somewhere else, and he pockets the difference.
  Seeds have no place in Jared's business cosmology. They aren't stylish, prestigious or luxury things. They make a humble showing in the land of high-end bling, although in some traditional cultures they're used as money, and in others these "botanical eggs" are collected rather like jewels.
  Jared hauls over his pal Nick and says, "Nick, this is George. He's in seeds." They look me up and down, as if I were an exhibit in a natural history museum, their expressions a blend of amusement and disdain.
  I look them over in turn. I explain that seeds are God's microchips: miniature devices programmed with information and algorithms to generate life. This befuddles them for a moment. Are they missing the next big thing? Or am I playing the players?
  I spot a friend across the room. "Fellows," I say momentously, as I ready to take my leave. "The future belongs to seeds." Their pink faces flush crimson; they whoop with laughter.
  Jared and Nick were first-string players in the New Economy, a playground fueled by easy credit, speculation and other people's money. Seeds rightly appeared to them as the barter of another era. And it's true, the seed business has changed little in the last 500 years. The major shift in the last century has been the transition of the home garden from a necessity—how you feed the family—to a hobby for some, a passion for others.
  A few steps into the 21st century, the role of the home garden has once again changed. Standing in my garden, I can almost hear the stampede of new and rededicated American gardeners. Outfitted in jeans, baseball caps and Wellingtons, clutching their trowels, Americans pioneer their new frontier—their backyard garden.
  Converging on the home garden is an extraordinary array of trends in tastes, health awareness, lifestyle and demographics—a phenomenon I call a "perfect storm of tipping points." The Old Economy is new again.
  The major catalyst is the economy's downward spiral. Americans are getting wise to the extraordinary savings they can reap, along with their tomatoes, peppers, green beans and squash. A home garden delivers reliable and extraordinary returns on your investment, a hundred dollars in seeds producing a harvest that would cost you $2,500 at your supermarket. A 25-to-1 return? Snap my striped suspenders!
  In the last 10 years, Americans have grown exquisitely attuned to issues of nutrition and food safety. Their increasing insistence on food quality—optimally nutritious, fresh, flavorful and safe—is well-founded.
  The vegetables and fruit bought at the supermarket are picked prematurely, spend weeks in trucks and warehouses exposed to carbon monoxide and other contaminants, and are frequently gassed to boost their colors. To purchase supermarket produce is to compromise on flavor, nutrition, texture and safety—while getting a swift kick in the budget.
  The local food movement has built upon this kind of new awareness, and farmer's markets are sprouting across the country. But why go to the farmer's market when a few steps away is a garden bursting with fresh tomatoes, string beans and watermelons? It doesn't get more local—or fresher—than this.
  And in this world of iPhones, PCs, Twitter, 200 cable channels and over the top home entertainment centers, the garden suddenly appears as something new and delightful: a multidimensional, interactive realm of flavor, nourishment, fragrance, pleasure, beauty, recreation, sanctuary and self-realization.
  At first, we are smitten with our glittering new techno-toys, only to relearn that these clever machines cannot provide what we really want—a sense of connection and authenticity. Welcome to the garden: It doesn't get more real or connected than this.
  Mr. Ball is chairman of the W. Atlee Burpee & Co. and past president of the American Horticultural Society.

10/05/2007   glimmers of intelligence from the Wall St. Journal (j) &/or NY Times (t) - missing earlier and later dates are handled entirely on current homepage or archive pages -

• Angry voices: torture, Iraq, the [child health] veto, letters to editor, NYT, t.A26.
  [It seems to take a trio of outrages to send a ripple of awakening across America. That's what happened just before the last midterm elections, and that's what's happening now. This time the three are torture, Blackwater and a child health veto.]
  • By Monica Mori of Chicago.
    "Secret U.S. endorsement of severe interrogations" (10/04, A1) and "Bush vetoes health bill privately without fanfare" (10/04) make me feel sick and desperate about what this president has done, and continues to do, to our once-proud country in only seven years.
    Could he have done more to debase us if he had set out purposely to destroy us, our economy, our moral values and our dignity?

  • By Kenneth Aaron of Portland, OR.
    So we have a Justice Dept. that endorses torture, and an Army that hires private contractor-mercenaries who are outside of U.S. or military law, and a president who views the world as an episode of "24." All this is supported by a party that is homophobic and seeks to merge church and state. All in the name of democracy and freedom.
    Since when does trashing civil liberties...defend democracy?
    How did we come to have leaders who exhibit qualities of those from whom they claim to protect us?

  • By Pres. Leonard Rubenstein Physicians for Human Rights of D.C.
    ...No amount of legal jujitsu can change the fact that torture is defined as the infliction of physical and mental pain and suffering - precisely the conduct that administration lawyers approved for the C.I.A....
    It is time for the law to be enforced, for perpetrators to be held accountable, for Congress to explicitly prohibit the CIA's enhanced methods, and for American institutions and values to be reclaimed.

  • By Stephen Lehman of St. Paul, MN.
    James Comey said his colleagues at the Justice Dept. would be ashamed when the secret opinions authorizing torture came to light. So are they ashamed? I know I am.

  • By Carol Delaney of Providence, RI.
    Bush...vetoed a bill to expand health care provision for the poorest children in the U.S.... Yet he has no qualms about spending billions every month [$2B/wk! - ed.] on death and destruction in Iraq.
    That money could have enhanced the life of every person in the U.S. by financing free health care for everyone, not just children, and Social Security for years to come.
    [And if it was spent in the U.S. on lots of people, it would strengthen the U.S. consumer base and U.S. markets a lot more than spending it in Iraq and on a few wealthy weapons dealers in the U.S.]

  • By Paul Nadler of Metuchen, NJ.
    I walked through the World Trade Center 20 minutes before the attack, saw the buildings burning, breathed the poisonous dust, wept for my country.
    Now Blackwater. Torture. An unprovoked war.
    I am aghast. Revolted. And ashamed.

  • By Joel Sheffield of Haddonfield, NJ.
    After reading "From errand to fatal shot to hail of fire to 17 deaths" (10/03, A1) about Blackwater USA and the column by Maureen Dowd the same day ["Sinking in a swamp full of Blackwater"], I find myself overwhelmed by sadness, fury and impotence.
    First, there is the profound tragedy that a man can't drive his mother to the hospital without losing his life and precipitating chaos.
    Then, there is the [disgrace] that our State Dept. requests protection in a warzone and our own forces are unable to provide it. So we pay exorbitantly for mercenaries to do the job that we can't, and we also give them carte blanche to carry out their "mission" in any way they wish.
    There are apparently as many "contractors" in Iraq as members of our military. What if they decide that our own armed forces are in the way?
    [Too late. Apparently in several incidents they already have.]
    And then there is the impotence of the members of Congress, who are trying to triangulate among their constituents..., their president and their perception that to take any action is to be labeled.
    Surely this Iraq mess is not a partisan issue. We look to Congress for leadership and we get talk and evasion.

  • By Richard Dickinson of Glendale, CA.
    Re "Sinking in a swamp full of Blackwater," by Maureen Dowd (10/03): As a Vietnam-era veteran, I am extremely troubled by the privatization of our military. Even if Blackwater mercenaries had not killed a single innocent Iraqi, I don't want these surrogate soldiers in America's defense force. ...Donald Rumsfeld said he wanted to build a leaner military force, but then he hired contractors like Blackwater because he said he didn't have enough troops.
    If you want more troops, restore the draft....
    [They don't have the guts to restore the draft. They're scared that if they do, people will really wake up, storm Washington, and lynch every one of them.]

• Let's outsource professors who defend outsourcing, by Kathleen Slocum of Hope NJ, WSJ, A19.
  In regard to "The way we live now," editorial-page commentary by [Prof.] Jeremy Siegel, Jan.26: It's easy for Mr. Siegel personally to take his rosy view of the decline of Western economies while his business school is still importing students from China, India and other developing countries for him to teach here [instead of teaching there themselves] - in other words, while his job here is still safe. But why should that persist?
  When other American corporations can more cheaply turn out their product overseas, why shouldn't production of MBAs, PhDs, MDs and JDs also move offshore? All sorts of American professionals, many struggling with huge education debt as well as masive insurance premiums, are seeing their jobs outsourced. Professors will not be immune from this trend forever.
  Mr. Siegel decries "protectionism" when it is exactly a de facto protectionism that keeps him employed at home and allows him to be sanguine about everybody else's job moving overseas.
  [Hold on, Kathleen - we got another one doing it today in the Times -]
  Job migration is not all bad, pointer (to C2), NYT, C1.
  Some technology jobs may indeed be migrating overseas [like there's any doubt?!], but the trend is less frightening [to the author anyway] and more promising [to super-flush, short-sighted CEOs?] than one might think.
  [Target -]
  Economic scene - A researcher sees an upside in the outsourcing of programming jobs, by Virginia Postrel, NYT, C2.
  [Oh look, it's a twofer. Snug&sheltered Virginia is touting for snug&sheltered Catherine Mann, an economist at the Institute for International Economies in Washington. How much are they paying you two? Accepting articles from you two on this subject is like asking the tobacco industry if tobacco causes cancer. "Oh no-o-o!" And Catherine Mann is another 18th-century mind who thinks that -]
  ...Over the long run...the globalization of software and computer services will enhance American productivity growth and create new higher-value, higher-paid technical jobs.
  [What is it about these people's partitioned brains that keeps them from connecting the dots between worksaving "software and computer services," and CEOs' downsizing, not timesizing, response thereto? This manly Mann then cites a fatal example -]
  What's happening now to software and services has already happened to hardware, with great economic results.
  [OK, let's look at what has happened to hardware and look at these "great economic results." Hardware competition has driven PC prices below $500 for desktops and below $1000 for laptops, but, let's just take 3 hardware manufacturers that spring to mind and see what's happened to hardware employment - and derivative consumer demand. Hewlett-Packard has laid off 15,000+1,800 people - see 9/26/2002 #1 (where's the "new higher-value higher-paid tech jobs", Dr. Mann?). IBM has laid off 7,790 last year alone: 1060 on 1/08/2003 #3, 1000 on 2/28/2003 #1, 600 on 8/19/2003 #1, 400 (+ 3000 furloughs) on 9/26/2003 #3 and offshored 4,730 on 12/13/2003 #1. Gateway has laid off 11,500 noted on 1/07/2003 #2 plus 1100 on 9/04/2003 #1. So maybe both you two cheerleaders, Postrel and Mann, should just siddown & shaddap - you're just muddying the waters and discrediting yourselves. Or go peddle your valium in the Wall Street Journal. The only sustainable response to the domestic spending&growth-eroding effects of offshore outsourcing is the principle, "Firms are allowed to access a national consumer base only to the degree in which they maintain it with jobs and wages." Automatic mechanisms are designed to enforce this in any individual products, services or whole industries that are experiencing high offshore-outsourcing job displacement, as distinct from domestic-technological job displacement. The primary ingredient is the unremedied unemployment dba labor-surplus level that is tolerated or fostered around their offshore facilities. Based on that we impute to them an estimate of effective "unfair taxpayer subsidy" going on in that offshore location, even though such subsidy is probably forced by their CEOs and highly detrimental to the taxpayers there who are living with low wages, long hours and poor working conditions). If we estimate a high effective unfair subsidy there, two secondary ingredients come into the recipe for the automatically balancing trade mechanism that we are designing: the proportion of their headcount that is employed in the USA and the proportion of their payroll that is paid in the USA.]

• New Mexico: Plan to end food and medical taxes, by Steve Barnes, NYT, A18.
  Gov. Bill Richardson [will] ask the Legislature to phase out sales taxes on groceries and medical services and reduce them on professional sporting and cultural events as part of a larger restructuring of the state's tax code.
  [As Milton Friedman says, "You get more of whatever you subsidize, less of whatever you tax." If we really want more business, more sales, we've got to stop taxing sales, ALL sales. In the short term, we need to switch taxes from sales onto sluggish concentrated money (the rich) via graduated income taxes, and in the longer term, we need to morph taxation into fees for services or shares of service (e.g., individual usage-share of roads, individual share of national defense - we now have the computational power to handle this level of accountability) and enable EVERYONE to more easily support themselves so that taxpayers don't have to do it. We estimate that some 75% of government today is makework, maybe more. Timesizing enables all that big government to be safely dismantled.]
  The food tax alone yields more than $90m annually to the state and local governments, and Mr. Richardson said he would work with lawmakers to soften the revenue loss when the Legislature convenes in a week.
  [We repeat, tax concentrated income and wealth - at current levels of compaction, it's just being wasted - creating a Black Hole economy.]

1. [1 UPsizing]
   WalGreen Co., NYT, C4.
   ...Deerfield, Ill., the drugstore chain, [plans] to build a 700,000-sq-ft distribution center in Anderson County SC to serve its growing number of stores in the southeastern U.S.
   [Unspecified new low-wage jobs.]

2. A vital immigration debate, editorial, NYT, A30.
   pResident Bush [our mixed case] has now waded into one of the most turbulent and emotional issues of our day: immigration reform....
   [With birth policy (delayed immigrants) close behind it, on a population-stressed continent that's hurting for water. And with imports policy (proxy immigrants) and offshoring policy (job-emigrants) close ahead of it. The Timesizing full-employment program handles all these issues, the "population variables," in Phase 5, and ties them right in to direct democracy and to living-standard deterioration.]
   ...The nation [has] 8-10 million illegal immigrants....
   [Or if those of us who entered this nation legally wish to question the use of the term "immigrant" in conjunction with "illegal" and to assume the connotation of "legal" inherent in the term, we had rather say -]
   The nation has 8-10 million illegal aliens.

3. One nation, under secularism - Why candidates should take religion out of politics, op ed by Susan Jacoby, NYT, A31.
   [Been there, done that, bought the bloodshed - century after century after century. We need to be building on the separation of religion and politics, and moving on to separate politics and economics.]

1. [1 UPsizing, unspecified new jobs]
   Panama Canal at crossroads - Waterway must add locks, at a cost of billions, or lose importance as trade route, WSJ, B1.
   [Compare general upsizing -]
   The weak dollar is prompting, pointer (to C14), WSJ, front page.
   ...some European car makers to expand manufacturing capacity in the U.S., Mexico and Brazil.