Doomwatch^TM vs. Timesizing^®

• Does Schroeder have political capital to reform economy? - Another German recession could infect the rest of the continent, by Mark Landler, NYT, A3.
  ...Unemployment...stands at a 4-year high of about 4m people..\.. "I haven't seen a situation this bad in my 25 years in political life," said Oswald Metzger, an expert on budget issues for the Greens.... "The government is offering no long-term vision of how we are going to emerge from this period."...
  [Sounds like a version of The Big Question. However, what the NYT-WSJ-IMF-mainstream means by "reform" - "make it easier for companies to hire and fire workers" - means "easier to fire" and "easier to hire at lower pay," a formula for weaker consumer markets and deeper recession. Despite the strength of the union-based 35-hr workweek movement in Germany, they still don't have a clue about the worksharing/timesizing imperative.]
  [Followup - the above story irresponsibly did not actually provide the unemployment rate, but it turned up 5 days later -]
  Germany: Unemployment rises, by Petra Kappl, 12/05/2002 NYT, W1.
  The German unemployment rate rose to 9.7% in November from 9.4% in October, sending the number of people out of work above 4m. Unemployment in the western part of the country was 7.8%, while the figure in eastern Germany [former East Germany aka Deutsche Demokratische Republik] was 17.6%....

1. Doomsday and reinsurance, editorial, Wall Street Journal (WSJ), A14.
   It may be too early to declare the bear market kaput, but the fact that global stocks have been creeping up since October is good news in one major, mostly unremarked, way. Each little ratchet-up makes it less liekly that the world financial system will suffer a major meltdown.
   But what if...? The doomsday scenario starts in Europe with the reinsurance industry. Reinsurers supply risk capital to life and property and casualty insurers and, as insurers of last resort, they are critical to the world financial system. More than half of the industry is in Europe and U.S. insurers rely heavily on them to spread their risks.
   This past year has been grim for many European reinsurers. Not only were they first in line to financial exposure to losses from terrorist attacks, widespread flooding in Europe and asbestos settlements, they have been socked by the slump in global stock markets.
   ...It gets worse: Both American and European insurers are exposed to a variety of risks in the credit market at exactly the moment that the corporate credit market is experiencing a severe and intense downturn....
   Trouble is, nobody knows for sure how serious the problems are. Accounting rules for insurance companies are - to put it politely - lax. Balance-sheet disclosure is inadequate and transparency is best described as exceedingly opaque....
   [And this is the industry that the Journal wanted to unseparate from banking (and brokerage) by repealing the "1930s-era" Glass-Steagall Act?!]
   Government oversight is also haphazard.
   [Oh and who's fault is that, Journal editors?!]
   Iin the home markets of the two largest reinsurers, Munich Re and Swiss Re are mostly unregulated....
   [Exactly the way the Wall Street Journal always pushes for!]
   We don't report all this to be alarmist, but to inform our readers and to underscore how interrelated the world's financial system has become. Mostly this has been a great boon [to the top brackets - ed.], feeding capital faster and more widely to its most productive [ha!] uses. However, it also means that financial problems in one part of the world can quickly spread across borders and hurt everyone. Problems for European insurers would surely echo through U.S. stock and bond markets.
   Some vast new global regulator would only add one more layer of bureaucracy, but more disclosure and better financial accounting would be helpful.
   [And who's going to define and enforce that?]
   Meanwhile, let's hope that revived stock markets ease this reinsurance problem before it does broader damage.
   [Problem with that hope is that most stocks rely on consumer markets, and consumer markets rely on employment, and CEOs are still downsizing right and left, instead of preserving their overall markets by trimming hours for all, instead of jobs for a few, and a few more, and a few more, and....]
   [Followup - Apparently embarrassed by the non-happytalk headline on its Friday editorial (above), the WSJ on Monday tried some damage control with -]
   Doom or boom? - Don't believe the hype; things aren't as gloomy as all that, editorial page opinion by Charles Wolf Jr., 12/02/2002 WSJ, A18.
   [wherein it ascribes gloom to everyone else -]
   Exemplifying the sometimes apt description of economics as the "dismal science," several well-known practitioners have been busily purveying bleak assessments of the American economy's prospects. The doomsayers include two Nobel Prize winning economists, two prolific columnists of the New York Times, one of Wall Street's top financial economists, and several alarmist writers of the London Economist [magazine]....
   [Not to mention the Wall Street Journal's own editors on Friday.... Guess the truth just slips out sometimes, - even out of manifest cheerleaders.]

2. New York says those on welfare are increasingly hard to employ - Hindered by addiction, AIDS or disability, by Leslie Kaufman, NYT, front page.
   [See our main disability article on 9/01-02/2002 #2.]
   As the willing and...able have been prodded off public assistance...they have left behind peers hobbled by addiction, disability and AIDS..\..NYC officials say..., a complaint that is increasingly voiced by welfare administrators across the country.... The number of people on public assistance with AIDS in NYC has nearly doubled in the last 3 years and now hovers at nearly 14,000. The city exempts all HIV-symptomatic individuals from any work and training requirements to get their benefits. The Bush plan offers no such wholesale exemptions for them..\.. More than half of public assistance cases involve individuals who meet the city definition of being capable of only limited work or no work at all. Even those able-bodied people still on the welfare rolls are increasingly likely to be illiterate or to stubbornly refuse work assignments despite fiscal penalties, city officials say.
   Since 1996, when the city began requiring able-bodied welfare recipients to work for their benefits, the number of people receiving public assistance has plummeted by more than two-thirds. Now, city officials say, comes the hard part. "...We have gotten down to a core group that is mostly willing but not always able to go to work...," said the commissioner of the city's HR Administration, Verna Eggleston. The agency administers the federal welfare program and Safety Net, the program for the impoverished who have exceeded the 5-year federal limit or otherwise do not qualify for federal funds.
   ...Part of the dispute between the city and the federal government...revolves around who should be exempt from work. pResident Bush's plan calls for 70% of those receiving federal welfare dollars to be engaged in some kind of work activity. The plan exempts people over 60, women with children under 3 months, and children who are eligible for aid but whose parents are not eligible, for example, because they are not citizens. If the standards under the proposed Bush plan were in place today, the city's HR Administration calculates, the city would have only 45% of the eligible caseload working.
   ..\..Former officials of the Giuliani administration say the "unengageable" element of the welfare population is rising because the city is playing reclassification games. For example, individuals with relatively mild disabilities like asthma or arthritis, who were counted as able-bodied 3 years ago, are now counted among those whose work abilities are restricted....
   Beyond the issue of defining who should be considered able to work, city officials say there is the question of just how flexible the program that brings these people to work should be, and how to define work. The Bush administration's plan, for example, gives addicts 3 months of recovery time in which they are exempt from work requirements. But the city [says] drug and alcohol abusers, for example, can be in residential treatment programs for up to a year and be considered, in effect, [employed] by the city....
   But substance abuse is just one of many areas in which there is dispute over what kind of programs can be counted as work. In recent years, the city has started a therapy and job training program called Pride, which is mandatory for those on welfare with disabilities severe enough to affect whether they can work but too mild to get them income support from the federal government. ...The catch..is that the therapy part of Pride would not currently be counted toward meeting the 40-hour workweek under the Bush program....
   [Further -]
   Report: NYC welfare cases hard to employ, AP 11/29/02 05:17 EST.
   ...Welfare rolls have dropped by 2/3 since 1996, when the city began requiring that able-bodied people on public assistance work up to 35 hours a week in exchange for benefits....

1. Economic scene - Some may shrug off 5.7% unemployment, but it pinches hard at the bottom of the economic ladder - The prosperity of the 1990's has raised the bar for employment goals, byu Jeff Madrick, NYT, C2.
   There seems to be a notion around that an economy with unemployment at the current rate of 5.7% is not doing too badly at all. At least that's how some members of Congress justified their refusal on Friday to extend unemployment benefits, which will soon expire for nearly a million [people]. After all, many economists asserted only a few years ago that an unemployment rate around 6% is about the best the economy could do.
   [And worse still, that 6% was the frumious NAIRU = the non-accelerating inflation rate of unemployment. In other words, you had to foster that level of unemployment to avoid inflation.]
   Bujt most economists are still trying to wipe the egg off their faces. If the 1990s taught us anything at all, it is that the American economy can now do better.
   ["Now"??? It did much better in the 1940s when anything over 2% unemployment, more comprehensively defined than now, was regarded with horror.]
   The unemployment rate fell consistently from 6% in 1994 to a low of around 4% for all of 2001, with little worry about inflation. And low unemployment - the nation had not experienced sustained unemployment at the 2000 [does he mean 2001? or should both figures be 2000?] level since the 1960s - showed us all just how much better the economy can perform than even the most optimistic had come to believe.
   [And that ain't the half of it. With timesizing providing a balance of supply and demand, the economy would perform much much better than that!]
   Now the economy has deteriorated again.
   [Though the improvement was just a bubble borne on the reckless investing of the astronomical top brackets.]
   
   • ...About 2.5m more workers are unemployed now than in 2000.... The unemployment rate for African-Americans has risen about 60% faster than for all workers. Some 400,000 more are now out of work than...in 2000, a 2-year rise of 30%.
   • Moreover, after workers have lost their jobs, they have had more trouble finding new ones.
     [And the new jobs they do find usually pay less than the old ones. But Madrick has not mentioned this, nor why it and any of this is important.]
     The proportion of those who have been out of work for more than 27 weeks is way up. That is why extending unemployment benefits is so important.
     [Why, Jeff? Why is it important? Is this just your fashionably bleeding heart? When are you or any of the mainstream economists going to apply marginal efficiency theory and demonstrate how all this is fueling recession and worse?]
     Now, about 800,000 more workers have been out of work for 6 months or longer, compared with the number in 2000.
   • In addition, the number of part-time workers who would like full-time work has risen by one million.
   • And the increase in the labor force has slowed markedly because many more people have stopped looking for jobs. They do not show up in the unemployment data. In the recessions of the early 1980s and 90s, the labor force grew far more rapidly, pushing up the unemployment rate.
     [Not clear. He should probably be saying, "In the recessions of the early 80s and 90s, the disemployed and still-looking labor force grew more rapidly, pushing up the unemployment rate relative to the current misleadingly low rate.]
   For all the claims that educational differences and international trade were the main causes of income inequality in America, the experience of the 1990s increasingly suggests that slow growth and high unemployment were more decisive.
   [We think he should have said, "For all the claims that lazy people's poor education and free trade's cheap imports were the causes of income inequality, the 90s suggest that weak growth and high unemployment were the real causes." And his evidence is...?]
   As labor markets tightened in the late 1990s, even low- and middle-income workers seemed to regain some bargaining power at last.
   [Well, that supports high unemployment as a real cause of income inequality in the early 90s. But strong growth in the late 90s is not explicitly mentioned, and we would regard it as merely another result of low unemployment dba tight labor markets. We applaud his focus on what we regard as the Primary Cause: the loosening and tightening of the labor supply. But we boo his failure to carry this to its logical conclusion in the loosening of the enforcement of the workshare per person, that is, the 40-hour workweek, and we hiss his focusing of the income-inequality problem on the bottom, when the greatest part of the problem is in the top brackets, where the concentration of income was astronomical.]
   Mr. Bernstein [he couldn't look up the guy's first name??] and Dean Baker of the Center for Economic and Policy Research find an inverse statistical correlation between unemployment rates and wage rates for low-end workers.]
   With the recession that began 2 years ago [nice implication that it hasn't ended], family incomes again fell across the board [but the "fall" in the top brackets had no spending implications]. But it's no surprise that they fell most rapidly for those in the bottom 20-30%. An unemployment rate of 6%, or even 5%, is just not good enough.
   [Amen, amen, amen.]

2. Judge again bars effort to keep Cheney files secret - Another chapter in long-running maneuvers over energy papers, by Katharine Seelye, NYT, A26.
   WASHINGTON ...- A federal judge...Emmet G. Sullivan of the Federal District Court for the District of Columbia \yester\day again rejected Bush administration efforts to protect as confidential documents from VP Dick Cheney's energy committee. ...The White House has ignored Judge Sullivan's rulings, going over his head by asking a higher court to exempt Mr. Cheney from having to comply with the judge's orders over the last 5 months to turn over the documents. ...The administration has gone directly to the US Court of Appeals for DC to appeal Judge Sullivan's earlier orders that require it to produce non-privileged documents or explain in detail why it does not want to.
   [So much for the rule of law in America under these "malefactors of great wealth," as Teddy Roosevelt called them, though at least while he was in the White House, they weren't.]
   Second, the General Accounting Office, the investigative arm of Congress, is suing Mr. Cheney, arguing that the White House has to disclose whom Mr. Cheney met as he formulated energy policy and what they discussed. ...Environmental groups say energy companies that were big contributors to the Bush-Cheney campaign in 2000 wielded undue influence in formulating the policy....

3. [slavery in Ireland]
   Irish recall sad homes for fallen women - A film ['The Magdalene Sisters' by Peter Mullan] chronicles the cruelty of women's asylums [in the 1960s], by Sarah Lyall, NYT, A3.
   ...Families sent daughters who, for whatever reason, had brought shame on them \to\ the Magdalene homes.... The women worked long hours and received no pay. [photo caption]
   [This is too sad and shocking to go into. Suffice it to say it is another huge nail in the coffin of the Church of Rome, even as that pimp for pederasts, Bernard "Law," is finally forced to resign.]

• It's how we use computers that counts, by David Wessel, WSJ, A2.
  [Duh - this article provides good overview-data on productivity, but with the usual neglect of marketability -]
  ...U.S. productivity zoomed by 2.75% a year in the quarter-century after World War II, creating the modern American middle class.
  [Here's one of the mysteries of modern muddled thinking. Why would anyone think that productivity was a cause of anything - such as the creation of the American middle class - rather than an effect (of other factors that created it)??? The answer must lie in the self-importance of producers and manufacturers and service providers. They think it's all about them. "Supply side" became all the rage because it flattered them, and they'd sooo like to take their markets for granted, because markets discipline them and remind them of their limits and the areas in which they are powerless - never a comfortable thought.]
  Around 1973, productivity growth slowed mysteriously to 1.5%, and showed no signs of revival despite the spread of computers....
  [Wessel thinks this slowdown in productivity growth is mysterious? Why? Because he's unwilling to accept the obvious. Productivity growth slowed down because market demand slowed down. And market demand slowed down because the people with immediate needs to spend money didn't have the spending power (in Keynesian-speak, the people with the highest "marginal propensity to consume" had less money to consume with). And they didn't have the spending power because they were beginning to lose bargaining power in the job market. And they were losing leverage because there were a lot of inexpensive new entrants into the job market in the 1970s. Who? What big group of people was born right after World War II when the soldiers came home? The postwar babyboomers. When would they hit the job market? Depending on how long they were held up by "education," 20-30 years later. 1946 + 20-or-30 years later is 1966-1976. Allowing time for employers to realize their new power to bludgeon raises and hire cheap and depress 'marginal propensity to consume' and constrict production, "around 1973" would be right around the time we would expect productivity growth to slow - nothing mysterious about it unless you make the usual mistake of businessmen and economists today and think that productivity is an island unto itself, dependent on nuttin & nobuddy. Also in the period 1945-1970, the perceived labor shortage of the war kept people observing and respecting the 40-hour workweek limit, outdated though that already was even at its inauguration in 1940. People were better rested, more clear-headed, more productive. After 1970, with no leverage in the job market, no raises and no other way to get more money than working longer hours, much of the 1945-1970 employee efficiency began to go out the door as people worked harder and dumber, instead of shorter and smarter.]
  ...until 1995. Since then, producitivity growth has grown by more than 2.5% a year.
  [Gee, what changed in 1995? How about the Internet-telecom-hi tech bubble? Same as the radio-auto bubble in 1925. Suddenly those with all the money kid themselves that there's safe, or at least exciting, stuff to invest in, bigtime, and simply, "if they build it, it will sell." In short, productivity is everything and marketability be damned. But then, this was essentially the message of the supply-side nonsense of the early 1980s, CEO delusions of omnipotence run amok - again. And here's another false claim for the omnipotence of productivity -]
  This was big. Adding just 0.2% to productivity growth over a decade works out an extra $1,000 in income for each man, woman and child.
  [Never mind astronomically rising income inequality and wealth concentration.]
  "The American worker," says Kevin Hassett, an American Enterprise Institute economist, "was like Popeye opening a can of spinach in 1995....
  [We'd say, more like a big dumb bunny opening a pack of lettuce = greenbacks = $$$$$$$$$ from the inactive megahoards of the top income brackets.]
  ...The question now is: Is he out of spinach?"
  [We can either just say "Yes," or we can say, he never had it, the rich did, and they lowered their guard and speculated like crazy on all the sexy new technology starting in the mid-1990s on the assumption that it would magically find huge megamarkets, but since they set up no systemic centrifuge to get all their wasted mega spending power out to those who would actually spend it, no magic megamarkets appeared and the whole bubble popped in 2001. They continued to consolidate spending power so rapidly and astronomically that they strangled the markets away from the heightened productivity in which they themselves were speculating. These are clearly a bunch of people - the top income brackets - who can't think three moves ahead in chess and don't know the meaning of the word "balance." But this is the key word in the dawning ecological age, and we must now either bump up their smarts, or bypass them. Here's how dumb Wessel's cheerleading answer is -]
  Union Pacific Corp. offers one bit of evidence that the answer is: No! The big railroad says its productivity, measured in tons of freight carried per mile per employee, continues to rise at better than 6% a year.
  [Never mind that the fewer employees, the fewer consumers to purchase all this freight.]
  Its CEO, Dick Davidson, sees "every reason to believe" it can keep that up; the railroad is still tapping innovations that information technology makes possible, such as remote-controlled locomotives....
  [OK, shove that "truism" that technology creates more jobs than it destroys back even further in that other partition of your brain. Soon they won't even have to "waste" money on train crews at all - the money can all go to the CEO, who already has far more than he can spend, and there will be even weaker markets for all the freight that his RR is carrying. Brilliant! Just like the crewless trains in the Tokyo subway. And we all know where the disemploying of the workforce and weakening of the consumer base has gotten Japan's economy in the last 12 years. Koizumi's oekonumi is in the high-tech toilet. As Walter Reuther retorted to Henry Ford's jibe, "Let's see you unionize these robots!" - "Let's see you sell them cars." The only intelligent solution to the conundrum of how do you get greater productivity without fewer employee-consumers and smaller markets is - sharing and spreading the vanishing work and skills. Sismondi saw this in 1819 - "In truth then, there is nothing more to wish for than that the king, remaining alone on the island, by constantly turning a crank, might produce, through automata, all the output of England." Of course, there'd be no markets for all the output in England, because only the king would be getting any pay, and like Bill Gates, he'd have no time or need to buy it all.]

1. [much as Phil Hyde would like to believe his native province isn't as dumb as the most populous US state, apparently they're even stupider because they didn't learn a thing from California's energy fiasco]
   Outcry in Ontario over energy prices, by Bernard Simon, NYT, W1.
   TORONTO -...In Ontario, politicians are scrambling to quell a public outcry over soaring power prices. Six months after deregulating its power market in hopes of promoting competition and encouraging investment in new capacity, the government of Ontario, Canada's most populous and industrialized province, backtracked late Monday and said it would freeze retail electricity rates for the next four years...."
   [Has Ontario ever heard the phrase, "If it ain't broke, don't fix it!"? Did Ontarians read NOTHING about California's energy crisis a year and a half ago, caused by deregulation? Shades of Dubya and Social Security: "Privatize it!" But what if the stock market goes down. "Privatize it!" But the stock market HAS gone down. "Privatize it!" But accountants and CEOs are jiggering the figures. "Privatize it!" But we already have IRAs and 401ks - we can just raise the limits. "Privatize it!" Such insistent obsessive stupidity just can't learn. It's happened sooner or later in every empire in history - and then the empire shrinks under its own colossal folly.]
   [Followup -] Ontario decides not to sell part of big hydroelectric utility, by Bernard Simon, 1/21/2003 NYT, C8.
   [Phew!]

2. But then, maybe Dubya's real purpose is just to destroy Social Security, as two of today's letters believe -]
   Dubious tax cuts, wily Republicans, letters to editor, NYT, A32.
   • By Robert Cleland of Wilmette IL.
     Bob Herbert is surely right that GOP extremists are pushing taxcuts as a slick way of throttling social services ("Behind the smile," column, Nov. 11). But the flip side of that reality is that these same "conservatives" [our quotes - ed.] have no aversion to vast public spending for military purposes. The Pentagon budget, nearing $400 billion per year and headed skyward, now consumes an even 50% of the federal discretionary budget. 9/11 provided the perfect rationale for realizing the wish list of the military-industrial complex. ...More ships, plans and tanks will do little to cope with the threat from Al Qaeda....

   • By Michael Ziskin of St. Paul.
     ...Apart from the already disproportionate redistribution of wealth to the well-to-do [hey, isn't ANY "redistribution" Communist?! - ed.], the key purpose of the GOP's taxcuts is to destroy Social Security, Medicare and other social programs by bankrupting them....

3. [And not only has Putin learned from Dubya's duplicitous war of distraction (see "Why Putin boils over: Chechnya is his personal war," by Michael Wines, NYT, A12). So have abuser-protecting Catholic bishops -]
   Bishops turn to writing antiwar policy - Prelates examine the morality of using force in Iraq, by Laurie Goodstein, NYT, A27.
   [Like we believe they know "squat" about morality faced with their cluelessness on child abuse?!]

4. Incumbent heaven, editorial, WSJ, A24.
   Members of Congress don't have the equivalent of faculty tenure, but you wouldn't know it by last week's election results. So many incumbents won by such large margins that Saddam Hussein could have sent election observers to critique the lack of political competition.
   • Overall, 98% of House incumbents won, and 4 of the 8 who lost had been thrown into new districts with other incumbents.
   • 78 candidates [or the 435 total] had no major party opposition, including 6 of the 10 seats in Massachusetts....

5. [then there's the constant "little"(??) irritants -]
   'Spam queen' - For bulk e-mailer, pestering millions offers path to profit - Even if most people ignore here, Ms. [Laura] Betterly [of Dunedin FL] can succeed; It's legal and easy to do..., by Mylene Mangalindan, WSJ, front page.
   [We either need to make it illegal, or start a separate REAL Information Highway just for information - no spam, no porn. Easy for libraries to deal with.]

• Bids & offers - Inside the world of corporate finance & Wall Street, compiled by Georgette Jason, with Munk, Bray, Cowan & Burns, WSJ, C4.
  [Sounds impressive, huh? But check out what revs these kids' jets -]
  ...A timely theme of this year's SIA [Securities Investors' Assoc?] meeting is restoring investor confidence, something that appears to be sorely needed....
  [Like we can restore investor confidence without restoring consumer confidence???
  Or restore consumer confidence without restoring employee confidence???
  The SIA seems to have a bunch of seriously partitioned brains.]

1. ['be careful what you wish for']
   The fat lady sings - Investors should start channeling their Inner Peggy Lee: Is that all there is?, by Jesse Eisinger, WSJ, C1.
   A dream scenario for stock investors has come to pass.
   • A pro-corporate president who came into office lacking a clear election mandate has been given one. His party controls Congress.
   • The Fed slashes away at interest rates.
   • Harvey Pitt, a pesky hindrance to investor confidence, has gone the way of the Scarsdale diet.
   • [Plus, the war of distraction appears to be on-track and successfully distracting - ed.]
   • [Plus, the coverup of Dubya's and Cheney's and Kenny-Boy Lay's corruption is succeeding nicely.]
   • [Plus, the repeal of the safeguards against corporate corruption (and future depressions) of the 1930s proceeds apace; for example, Glass-Steagall is repealed and bankruptcy is about to be un-"reformed."]
   Yet it's far from clear that investors are happy about all this, as shown by yesterday's modest bump in the markets.
   [Yeah, now the GOP can't blame the flaccid, beige and deservedly prostrate Dems. So instead of being Hoover, it looks like Dubya may get a chance to play Coolidge while the small-r recession with sputtering small-r recoveries convinces investors it's really a big-D Depression. The next victim, er, president, will get to play Hoover.]
   Take the GOP-controlled Congress.
   • Investors can look forward to tax cuts and eased regulations for pet industries. But tax cuts will mean budget deficits, which are bad for bond investors. The Treasury market was roiled yesterday in part on those fears.
   • Surely lower taxes are good for stocks though, right? Not necessarily. Take one of the agenda items most likely to pass: ending what's been dubbed the "double" taxation of dividends. (Some argue it isn't really double taxation because 2 entities are being taxed: a corporation and an individual.) Proponents of elimination contend that companies don't pay dividends because of tax reasons. Actually, companies paid fewer dividends throughout the 1990s because investors didn't care about them and they wanted to buyback stock to avoid options dilution, not because of a supposedly punitive tax code.
     [Well, it could have been both.]
   • As for the Fed's munificence, well, interest rates are near rock-bottom levels. Will this latest cut help much? The mortgage-refi boom is petering out, because people already have reaped the big reductions.
   • Meanwhile, the economy is undeniably slowing. The Fed's actions, with its big cut yesterday, belie its [positive] words. [And] the logic is curious: Monetary policy works with a delay, so how can it smooth out a short-term "soft spot"?
     [I.e., it ain't short-term.]
   • And how much more laissez do investors really want the Bush team to faire?
     • Investors have the loosened regulatory environment they like.
     • Glass-Steagall has fallen.
     • Telecom, energy and airlines have been more or less deregulated. [And they're all in big trouble.]
       
     • Universal healthcare is extinct.
     Result:
     • Overcapacity in the deregulated sectors,
       [because of overinvestment in production and underinvestment in consumer markets - the supply-side "field of dreams" approach doesn't seem to be working, again = "if you build it, they will buy"]
     • bankruptcies [everywhere] and
     • rising healthcare costs [further strangling consumer markets].
   • Not to mention that little bout with the fraud pandemic that we've all forgotten about. With the SEC in disarray, investors don't seem likely to feel confident for long.
   • The most worrisome thing is that all of these [GOP-friendly] factors do nothing for underlying company fundamentals. Earnings aren't back [because sales aren't back - because consumers aren't really back despite happytalk about US consumer spending holding up - because employment isn't back - because timesizing isn't back (the official workweek is still the 1940 level) - because downsizing is still the rage].
   The stockmarket rally [may have] enormous sentiment behind it. But for each supposedly positive development, there is a logical, darker implication. As this realization sinks in, look for the rally to fade.
   (Send comments to tape@wsj.com, and check back on Monday for selected letters at wsj.com/tape.)
   [Here's our comment - now the country has called the conservatives' bluff, they're going to lower the country into the Third World so fast that they'll no longer have the "frog in the water" protection (where the frog never realizes the danger while the water is slowly brought to boil) and we'll see a partyflip, as when Nixon went to Communist China, or Hoover said shorter hours was the fastest way to create jobs. It won't be the first time. In 1844, the "Democrats" supported slavery and opposed the Declaration of Independence!]

2. Toronto exchange launches IPO, by Dummett & Hennessey, Dow Jones via WSJ, C4.
   The Toronto Stock Exchange [TSX] sold shares in itself,...
   [- this is like the umpire at a baseball game jumping into the game and still claiming he's neutral -]
   ...perhaps encouraging other exchanges in North America to go public in coming years....
   [More of "conservatives'" recent policy of "If it works, fix it anyway" and "Don't leave well enough alone." They deregulated or privatized -
   • airlines and ruined them,
   • telecoms and ruined them,
   • utilities and ruined them.
   They're working on schools and Social Security. "What else can we loot and burn?!" "What other interests can we open to conflict?" Do your extremest, guys. You'll soon discover your "conservatism" has strayed into radicalism. Not that the old-fashioned liberal laundrylist is any more relevant, but efficient, one-control worksharing is certainly long overdue.]

3. A Korean city welcomes G.M.'s return, by Don Kirk, NYT, W1.
   INCHON, South Korea - ...Han Ik Soo...oversees production of 400 compact cars a day [at GM Daewoo] in an antiquated plant in this industrial port city west of Seoul.... "We've got 96% automation here," Mr. Han insisted, waving at machinery worn by years of use....
   [Only 400 cars a day in an antiquated plant?? Only 96% automation after years of use??]
   [The] workforce already [has been] slashed from 20,000 to 8,400....
   [Wouldn't 96% automation haven't taken the workforce down to 800 (4% of humans left)? At any rate, this is yet another slap for "flat-earth" (but still mainstream) economists that makes mincemeat of their chant about technology creating more jobs than it destroys. (PS: we caught these jobcuts over the past 2 years under "Daewoo Motor.")]

1. Big Board's enforcement staff nears a record number of cases, by Gaston Ceron, WSJ, C5.
   [Big Board = NY Stock Exchange, alias NYSE. And if this headline worries you, you don't want to know about -]
   NASD disciplines firms, individuals, by Evelyn Lee, WSJ, B5B.
   [NASD is the outfit that runs NASDAQ, so these two articles account for the two largest stock exchanges in the world. The Wall Street Journal is so embarrassed by this latter article - which it updates every week or two - that it always prints it in illegibly small print, and even so it takes up the equivalent of almost a full page (and the WSJ has big old pages, bigger than the NYT).]

2. Unsettling scenario - Inside the Fed, deflation draws a closer look - Stumped for a cure, officials study how to keep prices from falling in first place, by Greg Ip, WSJ, front page.
   [Whoah, the Fed is verging on posing The Big Question. Their version: How to keep prices from falling in the first place? Maintain consumer demand. How maintain consumer demand? Prevent the centripetal forces on national income from overwhelming the centrifugal forces, because we've allowed spending power to concentrate in unspendably massive "black holes" in the top income brackets. How to maintain the strength of the centrifugal forces? Either ban corporate mergers and downsizings except in pre-liquidation extremis, or flex up the 62-year-frozen workweek and let it vary inversely with unemployment, comprehensively defined (ie: to include welfare, disability, homelessness, prison, premature retirement....) - AND implement automatic overtime- and overwork-conversion to training&hiring. Simple. And the only alternative is war or plague to withdraw the wage-depressing general surplus of manhours from the job market. It's Malthus' legendary "general glut" - it's real after all. Its solution is to share the vanishing work and quit straining for makework and quit chanting that "technology creates more work than it destroys." Chanting doesn't make it true.]
   Alan Greenspan and his colleagues at the Federal Reserve have spent their professional lives fighting inflation. But in the fall of 1999, central bank officials gathered at a country inn in Woodstock, Vt., to talk about the opposite: What would they do if faced with deflation, or widespread falling prices, and they already had cut the interest rates to zero [the Fed has just cut interest rates half a percent to 1.25%, so we're getting there]?
   [So years after these dummies dropped their first mandate, fighting unemployment, and focused blinderedly on their second, fighting inflation, they now have to reinvent the wheel and rediscover their first mandate.]
   Deflation is dangerous because it makes it hard to boost the economy by cutting interest rates [always a superficial cure - ed.] and because it makes debt, now at a postwar high in the U.S., harder to repay.
   At Woodstock, researchers brainstormed about possible ways the Fed could spur spending, such as adding a magnetic strip to dollar bills that would cause their value to drop the longer they stayed in one's wallet.
   [Ah, reinventing the wheel of depreciating currency. Arthur Dahlberg wrote a whole book about that in 1938, called "When Capital Goes on Strike; How to Speed Up Spending," having prematurely abandoned his insufficiently developed concept of sharing the vanishing work in his earlier book, "Jobs, Machines and Capitalism" (1932).]
   At the time the chance of deflation in the U.S. seemed remote.
   [Only to the superficial observers.]
   Today, deflation no longer seems so remote.
   [How can it? It's all around us.]
   Prices of consumer goods, as opposed to services, are falling for the first time since 1960. By the Fed's preferred measure, overall inflation was just 1.8% in the year through August. Fed policy makers have cut short-term interest rates to a 41-year low of 1.75%, and investors expect them to cut rates again in coming months to as low as 1.25% - perhaps starting at their meeting today....
   [Yep, that's exactly what they did.]
   Most Fed officials feel that the 1.75 points [now only 1.25] of rate-cutting room they have left is plenty to get the economy growing briskly again.
   [Dream on. This is the long wave, the Kondratieff, and there's actually nothing whatsoever cyclic about it in the sense of an automatic upswing. This is the one that requires massive withdrawals of excess manhours from the job market, on a scale that only world war (stupid) or Timesizing (intelligent) can handle.]
   The U.S. economy is struggling with the collapse of a gigantic stock mania....
   [Shades of 1929, and that was just a symptom of the tremendous concentration of employment and the absolutely unspendable concentration of spending power with resulting strangulation of consumer markets.]
   Overseas, Japan is in its 4th year of declining prices even with interest rates near zero, a result of a decade of economic stagnation that followed the bursting of its real-estate and stock bubble. China has experienced intermittent deflation since 1999 and a few economists think Germany may be close.
   [Well that accounts for the three biggest economies on the planet....]
   The IMF projects that inflation in industrialized countries this year will hit 1.4%, its lowest level in more than 40 years....
   [And since the Fed's inflation hunters have set up their data definitions to err on the inflation side, a number as low as 1.4% probably already means 0.5% of deflation.]
   Shouldn't consumers be happy when prices fall?
   [Sure, if they've got money - but that isn't the obvious answer this article is fishing for.]
   That depends on what causes [the] deflation.
   • When technological progress leads to rising productivity, or output per hour of work, the economy can produce more each year with the same workers and equipment,
     [or more often, more each year with fewer workers and updated equipment]
     and companies can cut prices while increasing sales.
     [until the layoffs start cutting their markets.]
     Between 1865 and 1879, manufacturing output rose 6% a year while prices fell by 3% a year.
     [Probably consumers couldn't afford all this new stuff on their stymied wages, especially if there were plenty of layoffs (and there were).]
     Wages were basically unchanged.
     [Because the layoffs created a labor surplus, or more specifically, a surplus of labor hours in the job market.]
   • Deflation is more worrisome when it results from declining demand, as it did during the Great Depression...
     [Ah, at last reporters are scanning back an appropriate timelength for analogies!]
     ...when prices tumbled 24% between 1929 and 1933, bankruptcies mounted, thousands of banks failed and the unemployment rate hit 25%.
     [- a situation that was only solved by withdrawing vast numbers of human working hours from the job market, virtually creating a general shortage of labor (at least as perceived by employers, but the results were so good, we might want to redefine it as a balance of labor), which caused market forces to centrifuge all the unspendably concentrated spending power that was sleeping in the top income brackets, get it out to the people who actually had the economists' cherished "infinite wants," and SPEND IT, getting it back in play. Unfortunately, this was only done in the worst possible way, by killing and maiming people in a world war. Nothing in the feel-good New Deal succeeded in reducing that 25% unemployment by further than 14% = not even half, because FDR chose makework instead of sharework and mirabile dictu, makework is always an enormous strain, especially on taxpayers, and it's always too little too late. FDR blocked the admittedly primitive sharework solution of jumping down to a 30-hour workweek in 1933, admitted his mistake two years later, and managed to implement that approach too little too late, too. The 30-hour workweek came out as a 44-hour workweek in 1938, a 42-hr week in 1939, and a 40-hr one in 1940. Unemployment remained way high. Then we started Lend Lease and wartime footing and presto, unemployment rapidly went down below 1%. Thereafter TWO percent unemployment was viewed for years as alarming high. Note this 12th paragraph, inside page, is the FIRST time unemployment has been mentioned in this article, in line with the WSJ's culture of ignoring it and assuming markets arise by magic, totally unrelated to unemployment and downsizings and mergers. You know, we might be all right if the rich could think even two moves ahead in chess, but apparently they can't.]
     
   It is a central banker's nightmare. William McDonough, the 68-year-old president of the Fed of NY, recalls his father taking him in the late 1930s to see breadlines and "people in jail who were there for stealing food for their families."
   [Note the link between between unemployment and crime, cloaked here in a human interest story. Bring it to their attention and they will immediately start denying this link, regardless of its obviousness.]
   The Depression, he said in a speech in March, "was a very real thing to the people who created the Federal Reserve's mandate and they never wanted it to happen again."
   [Yeah, well it's too bad the Federal Reserve totally forgot that part of its mandate, isn't it. They were supposed to target unemployment and inflation and they've completely dropped the unemployment part. Dumb dumb dumb. Here's another real piece of stupidity -]
   Another risk from deflation is that consumers may delay spending because they expect goods and services to get cheaper. However, there's little evidence that has ever happened - even in Japan.
   [Then why do you hear this irrelevant "risk" in every single goddam discussion about deflation - if it's NEVER happened? The wealthy assume that the vast majority of consumers are just like them, picking and choosing when to, capriciously, make purchases. But for the vast majority, all that "preference" stuff is irrelevant. They're down to purchasing the bare necessities and there's no timing frippery about that - you need a necessity when you need it, never mind waiting in hopes it'll get cheaper. So guys, DROP this stupid irrelevant rich-oriented "risk" - you're just wasting space! The focus on the rich-oriented irrelevant goes on and on, demonstrating yet again how totally out-of-touch-with-reality our plutocrats are, how far gone in their self-insulation and isolation -]
   ...The 43% plunge in stock prices since early 2000 will pressure households for years to spend less and save more....
   [The WSJ and their ilk managed to come up with a survey of households a couple of years ago that indicated that SOMEONE in slightly over 50.00% of Americans households had a few stocks. Immediately they magnified that into "the majority of Americans now own stocks." And never mind that of the minority that do, only a minority own them outside pension funds or 401k's, which make them unavailable for immediate spending anyway. The big problem with finance and economics is that generally people the only people interested in it are pretty well off and too cloistered and unimaginative to realize that the majority is not at all like them.]
   Deflation doubters say the U.S. won't suffer deflation again because the Fed won't let it. "...Deflation [is] not a serious prospect," asserts Nobel Laureate Milton Friedman, now at the Hoover Institution.
   [Alas, the prophet with so much imagination shows his limits. Check out his "solution" -]
   Mr. Friedman, the best-known proponent of the view that prices rise and fall with the quantity of money in circulation [ya know, they'll focus on ANYTHING but the real issue, human sharing - ed.], says, "The cure for deflation is very simple. Print money."...
   [Thus sounding just like Hugo Stinnes, the monster who engineered the German hyper-inflation in the early 1920s, and starved thousands of people on fixed incomes, and quite a few families too, whose breadwinner could not push the wheelbarrow of inflated deutschmarks to the store fast enough to buy a loaf of bread, or stay strong enough to bike out to the fields on the outskirts of Berlin and steal a few turnips. See "The Penniless Billionaires" by Max Shapiro, Chapter 5.]
   Scholars blame the deflation in the 1930s on the Fed's refusal to accept responsibility for maintaining stable prices....
   [Hooboy, the wealthy are sooo out-of-it that they can't see the nose on their face - the majority of people had so little spending power that they couldn't keep up their previous rate of consumer spending, so merchants kept lowering prices in an attempt to maintain their previous business levels. Why did so many people have less spending power than before? Because like the 1980s and 90s, the "roaring" 1920s had been a huge era of mergers and downsizings. The managers and business owners of America had created the recession-depression themselves. But they just can't face the glaring truth. Because it implies an obvious solution - centrifuge the spending power, which can be done simply by adjusting the workweek downward until a perceived labor shortage raises wages, same as during the labor shortages caused every major war and plague in history. It's not like this is a big secret. It's more like it's sooo blindingly obvious, it is almost never mentioned in print. Arthur Dahlberg's 10th chapter in "Jobs, Machines and Capitalism" of 1932 is one of the very few places.]
   ...New Fed governor Ben Bernanke, a Princeton Univ. economist who has studied the 1930s, is to give a speech on deflation later this month called "Making Sure It Doesn't Happen Here."...
   [Ben, you're too late. It already is happening here. And nothing in the Fed's current, limited toolbox is relevant. Think you can get the Fed power to cut the standard American workweek? - cuz that's what it's going to take. Readjusting the level of the free-market "playing field" by balancing the share per person of the most accessible value dimension, worktime. And you don't need to equalize on a point - you can equalize on a range for greater flexibility. For example, we don't need to worry about any person who has averaged between 15 and 35 working hours a week. But the lower limit (eg: 15) needs to be set by repeating referendum - initially annually will do. And the upper limit (eg: 35) needs to be set by the lower limit in the sense that the lower limit defines comprehensive unemployment and if that unemployment rate is too high or rising, the upper limit (now nominally 40 hrs/wk) must be adjusted slowly downward - the rate of change can also be determined by referendum. Can the Fed do all this? If not, its whole much touted toolbox is superficial and irrelevant to these long-wave "general gluts" and no amount of faith from old monetarist warhorses like Uncle Miltie Friedman will change that.]
   ...Total debt [meaning probably consumer, and corporate rather than just corporate], excluding the federal government [why exclude that? - it's at close to record levels too], now equals 158% of GNP [God, they're still using GNP instead of GDP???]. The last time debt rose to that level was in the late 1920s [maybe they don't have GDP figures for the late 20s on hand]. Indeed, both the 1920s and 1990s saw a surge in new forms of debt-financed consumption - installment plans in the 1920s, "cash out" mortgage refis in the 1990s [eg: home equity loans, and never mind the similar proliferation of investment instruments, bucket shops of unregulated penny stocks in the 20s, derivatives and hedge funds in the 90s].
   But the fact that consumer debt has doubled since the 1950s to 90% of personal income isn't of great concern to Fed officials.
   [They just don't think outside the box. Here's the box, in this case -]
   They attribute it to a more sophisticated financial industry that has made credit easier to get, and to the rise in home ownership which means many people have substituted mortgage payments for rent.
   [Home ownership rose at least as much in the prosperous 50s, so the second consideration is irrelevant. However, the first consideration is relevant and an argument, not for complacency but for great concern. They made credit much easier to get in the 20s too - can the Fed meisters recall buying cars "on time"? - if they didn't invent that in the 20s, they sure pushed it to the max. And can they spell "margin accounts," which made buying shaky stocks oh-so-easy??]
   ...The corporate debt burden has also doubled since the 1950s to 89% of revenue, is more worrisome. One indicator of investors' concern about companies' ability to pay back the debt is that yields on medium-quality corporate bonds are 2.7 percentage points higher than those on safe Treasurys - the widest spread since 1986....
   Less relevant? [definitely!]
   Fed officials argue that they applied these lessons last year, cutting rates 11 times, and say the lessons are less relevant now, with the economy growing, albeit slowly.
   [Boy, are they insulated - from our record 2,100,000 prison inmates, our 4.6m additional on parole or probation, our 5,400,000 on disability, God knows how many homeless and rising, a pathetically rosy "unemployment rate" that can't even count higher than 6% any more, etc. etc. And even though they've jiggered the figures to count so much crap as "growth," some damn Canadian or something, outside the old-boys' club, is bound to contradict their calming, off-the-hook-letting grab at "slow growth" -]
   ...Martin Barnes, editor of the Bank Credit Analyst, a Montreal-based forecasting journal, warns that prices received by most businesses are already declining. While a near-term rate cut by the Fed might help, he says, it "is not going to prevent deflationary pressure from intensifying over the next few months."
   [And dare we point out that rate CUTS are also a form of deflation - and are therefore fueling the deflationary flames?! It's rather analogous to complaining about falling markets and consumer demand and reacting by downsizing your workforce, thus further dropping markets and consumer demand. The alternative, of course, is downsizing worktime, preferably by trimming the workweek rather than by war.]
   The federal government could also fight deflation by boosting spending or cutting taxes, though the recent surge in the government's budget deficit could make that more difficult.
   [Boy, they'll do anything but identify the obvious core problem. The spending power of the nation is far too concentrated in unspendably astronomical amounts in the holdings of the top income brackets. It was the steeply graduated INCREASED taxes of World War II that got that spending power re-activated, not fatuous tax cuts. And of course the "wonderfully tonic" culling of labor hours by the military draft created a shortage of labor and an upward surge in wages that not even a wartime Wage and Price Control Board could control. Lucky thing too, cuz that was the main centrifuge mechanism that spread and re-activated the spending power of the nation.]
   If the Fed cut its target for short-term interest rates to zero, and still feared deflation, its next steps are largely untried.
   • It could purchase large quantities of government bonds to lower long-term interest rates and perhaps prompt investors to shift assets to stocks.
     [Irrelevant. There is no sufficient "wealth effect" from higher stock prices to jumpstart an economy out of a "general glut" aka depression.]
     
   • It could purchase more government securities from banks, leaving banks flush with newly created cash to lend.
     [Even more debt? You gotta be kidding. The whole mechanism of depression is that lending grinds to a halt because no one is credit worthy. Many of the banks during the depression were already flush with cash to lend but no one was credit worthy. NEXT!]
     
   • It could try to create inflation by purchasing foreign currencies to drive down the dollar and push up the price of imports.
     [Oh, an admission that "free" trade may not be the great Be-all and End-all after all, because this is just a roundabout way of erecting across-the-board tariffs. Well, one of the first things Hoover did after the 1929 Crash was erect tariff and immigration barriers, and the Depression still rolled on till World War II.]
     
   • Other proposals, some possibly not legal....
     
   [These donut brains will try ANYTHING before doing the obvious and sharing the vanishing and bunched-up work - and wages - and thereby centrifuging and re-activating the spending power of the nation and maximizing and optimizing our domestic markets.]
   "Asking people to carry around some one-dollar bills that are worth 99.4 cents and some that are worth 98.4 cents would be a terrible nuisance," Alan Blinder, a former Fed vice chairman, observed at the Woodstock meeting....
   [Amen. Dahlberg should have stayed with improving the design of his work-sharing system.]

1. Economic reports suggest recovery faltering, by Sue Kirchhof, Boston Globe, C1.

2. Job losses continued in October - Fed is expected to act as recovery wanes, by David Leonhardt, NYT, B1.
   [Not that the Fed can do anything effective now that interest rates are already so low.]

3. [and our moronic "leaders" continue to make things worse -]
   Hemisphere free trade pact inches forward, by Edmund Andrews, NYT, A4.

4. U.S. may abandon support of U.N. population accord - Bush officials object to phrases they see as open to a reading of promoting abortion, by James Dao, NYT, A8.
   [How do we get these cretins into the 20th century let alone the 21st?]

5. Proposal to reduce greenhouse gases loses momentum, NYT, A4.
   [Hell, why don't they just issue us all with Kevorkian kits so we can commit the suicide they're designing for us quickly instead of dragging it out?]

• War on the initiative, editorial, WSJ, A14.
  Our politicians like to praise democracy, but this year more than a few are trying to subvert it. They've helped promote ballot measures next week that would make it harder for citizen-sponsored initiatives to get onto future ballots.... The right to voters to initiate laws flowered a century ago as a reaction to special-interest influence in state legislatures. Last we checked, those interests haven't gone away. [Only] 24 states allows citizen initiatives of some kind, and they are especially disliked by state legislators.
  [presumably as compared to legislators of municipalities, some of which also have referendums and initiatives in the United States, though unlike Switzerland, the most advanced democracy in the world, the US federal level still has none.]
  The war on the initiative takes several forms.
  • In Florida, ["Democrats"] on the Supreme Court already throw out most initiatives by claiming they violate the state's single-subject rule. But just in case something slips through, state lawmakers are backing a vote next week requiring that citizen-sponsored measures also include cost estimates of their implementation. Measures submitted by the legislature would be, surprise, exempt.
    [It's a good idea to have cost estimates but feedback is so important and the centripetal forces on power so overwhelming and suffocating, that the exemption should be reversed - the legislation from the powerful legislators should require cost estimates and legislation from citizens should not. Of course, the ideal which will eventually be standard operating procedure is that each piece of proposed legislation be accompanied not only by cost estimates but by funding proposals. This was the policy of Luigi Einaudi, the postwar PM of Italy - no government spending legislation got passed without prior or simultaneous passage of financing legislation.]
    
  • In Massachusetts, legislators prefer to pretend the initiative doesn't exist....
    [The main initiative Mass. legislators, led by slimy Finneran, was campaign finance reform that provided public funding for campaigns. Finneran and his goons left it unfunded.]
  • In Montana, the legislature has put 2 anti-initiative measures on next week's ballot that would make signature requirements more difficult. One would mandate that signatures come from a larger number of counties - a requirement similar to a law in Idaho that a court has declared unconstitutional.
    [The misleadingly named "Democrats" in Massachusetts back in the 1970s doubled the number of signatures required just to qualify as candidates for political offices.]
  • In Oklahoma, voters finally get to vote Tuesday on a prohibition against cockfighting after a delay of two years. Opponents got the legislature to put a competing measure on the ballot that would double the number of signatures needed for future initiatives on animal welfare.
  • But the king of anti-initiative states is the self-styled progressive state of Oregon. A term-limits measure this year failed to collect enough signatures because the state voided signatures from people who hadn't voted recently, even though they were registered and eligible to vote. "Liberals" [our quotes - ed.] are now sponsoring a measure Tuesday that would ban paying petition gatherers by the signature - a move that would give a leg up to unions, which have a large supply of volunteer labor.
    [The real question here is, can candidates still pay by the signature? There should be equal treatment, or preferred treatment for initiatives.]
  This assault comes, ironically, when the number of citizen initiatives has declined to 49 this year, down 30% from 2000. At the same time, state legislators have increased the number of measures they put directly on the ballot to 147, up 10% from 2000.
  Hey, that's OK too, because these are usually one-issue things that escape the confusing party or personality bundling that most American legislation is subject to.]
  It's true that the initiative process has sometimes been abused for frivolous proposals.
  [Hey, maybe a little more frivolity would interest more Americans to participate in the political process, now that our voter turnouts are reaching record lows.]
  But voters are discriminating and reject measures they are unsure of. The late economist Mancur Olson argued that the downfall of democracy would be its tendency to calcify into special-interest gridlock. Citizen initiatves are one way to prevent that from happening.

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