Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

29 September 2012

My Dozen Tweets


[In general, I don’t Tweet. Twitter is a bizarre art form, a sort of digital Jon Stewart. I’m a thinker, not an artist.

But at their best, Tweets are like haiku—attempts to express ineffable truths in as few characters as possible. In that spirit, I offer the following dozen Tweets:
]

1. Russians worship an all-powerful state, we Yanks autonomous markets. If we both met in the middle and got practical, we might succeed like Germany.

2. The digital generation is the first truly lost generation, for in cyberspace everything is true.

3. Anyone who thinks cutting taxes on the rich will bring back lost jobs deserves to be unemployed.

4. Kids run away from parents with fixed ideas who admit no fault and blame their own mistakes on others. So why should kids follow Republicans?

5. If cutting taxes and regulation and downsizing government made us happier, we’d be in Paradise by now, because we’ve been doing them for thirty years.

6. Karl Rove is Stalin reborn here; he’s just not as powerful, yet.

7. If the Republican party’s collection of extremists were a single person, he or she would be schizophrenic.

8. Mitt’s two admirable traits are his wife’s loyalty and his irrepressible brass.

9. In ’63, African-Americans’ futures depended on whites judging them by the content of their character, not the color of their skin. Now all our futures depend on whites judging one man that way.

10. If lies were dollars, the GOP could pay off our national debt. [See 1, 2 and 3 (search for “any sense”).]

11. Mitt wouldn’t let Dubya come to his convention, but his policies are the same: cutting taxes and regulation, downsizing government, and privatizing anything that moves. Should we buy what Mitt himself barred?

12. Suppose your dad was like Mitt: an arrogant, rich, cocksure flip-flopper, who can’t understand why everyone is not as lucky as he. Would you live at home or move out?

If you think these Tweets have a germ of truth, then spread them like dandelions on a spring day. Even take credit for them; I don’t mind. My goal is not credit but bringing our country back to facts, evidence, reason and common sense.

Then get out there and work your tail off for Obama and your local Democratic Senate and House candidates. If they lose, you will spend your next decade underemployed and living with your parents, unless you or they are already rich.


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23 September 2012

Two Gathering Storms


Foreign affairs have a way of sneaking up on American presidents unawares. So it was with Dubya.

In his presidential debates twelve years ago, Dubya promised a “humbler” foreign policy, with no nation-building. Then a few dozen terrorists pulled off the nastiest sneak attack on our territory since Pearl Harbor. In a spastic response, Dubya started two unnecessary wars, managed them both abysmally, embarked on two creeping missions of nation building, and failed to kill the attack’s author. He left it to his successor to finish the job, wind down the two unnecessary wars, and control terrorists with counterintelligence, drones and ninjas.

Few Americans would have voted for a candidate as self-evidently stupid as Dubya in a time of clear and present danger abroad. But we thought then, along with Francis Fukuyama, that we had seen the end of history.

The Cold War was over. We were still enjoying the “peace dividend” and basking in the false glow of our supposed “victory.” Our businesses were dominating foreign markets. Our bankers were rampant. It seemed as good a time as any to drown government in a bathtub and throw a huge expensive party, with Dubya as Frat Boy in Chief.

The party came to an abrupt end on 9/11, especially for the one percent of Americans who now fight our wars for us. Then the Crash of 2008 killed the music, too.

Those two events—9/11 and the Crash—were the bookends of Dubya’s catastrophic presidency. No wonder Mitt and his pack of extremists didn’t even want Dubya at the Republican convention!

Today we’re sadder but wiser. Or at least we should be wiser. Anyone who can read the news knows there are two storms gathering at opposite corners of the globe.

No, they don’t include that ridiculous Islamophobic film (by a coward who won’t even show his face or name), nor the enraged overreaction from the usual suspects. Nor are they our still-rampant bankers, whose gambling and swindling could replay the Crash of 2008 at any time.

The real gathering storms are potentially even worse. They could sneak up on us like 9/11 and change our world and our way of life in days or months, just like the last century’s social cataclysms.

The first storm has been brewing for some time. Iran appears to be after nuclear weapons, or at least the ability to build and deploy them quickly. Israel feels an existential threat. Benjamin Netanyahu—a man whose subtlety is akin to Dubya’s—is eager to bomb Iran’s nuclear facilities. The only things holding him back are the President of the United States and Netanyahu’s hope that we will strike first or aid his strike.

First the strike was to be in April. Then July. Now Netanyahu appears to have agreed to hold off until after our elections. The hawks in Israel and here at home are getting restless.

Only two things are certain. First, the man in the Oval Office next year will have to handle Iran, Netanyahu and the hawks with care, finesse, and experience. Second, if a strike comes, and if Iran can carry out its threat to close the Straits of Hormuz, the man in the Oval Office will have to deal with oil at $200-$300 per barrel and a possible second Great Depression if the closure lasts for more than a few weeks.

As bad as all that might be, an even greater storm is now brewing in the East. Japan and China are rattling sabers over the Senkaku/Daioyu Islands and related mineral and ocean rights. The islands are small and uninhabited, but the conflict is real and substantial. It involves marine oil-and-gas rights, mineral rights, sovereignty, and historic grievances. Long buried nationalism and hatred are rising in both countries.

If not resolved soon, this conflict could explode the global economy as quickly as a strike in Iran and Hormuz closure. It could disrupt or terminate a $350 billion trade relationship between the world’s number-two and number-three economies, sending an already weak global economy into a deep recession. In the worst case, it could start a new world war, with us bound by treaty to defend Japan, even if its attempts to avoid the conflict appeared inadequate.

Are these fears exaggerated? The Chinese themselves don’t seem to think so. Already the fears seem to have disrupted the transition of power in China to Xi Jinping as leader. For the Chinese—who love to “save face” and give the appearance of effortless, effective transitions—Xi’s having gone AWOL for nearly two weeks is a big, big deal.

Xi himself is hard to read. In one of his most famous statements to foreigners, he said “We don’t export revolution, and we don’t mess with you.” Yet later he also said, “China is a big country, and that’s a fact.”

If he’s like most pols, he probably said the first thing for foreign consumption, and the second to provide red meat for nationalists at home. But it’s unclear what he really believes and where he’ll take China. It’s also unclear whether he has the skill to contain the dragon of nationalism that he or others already may have released. That thought is enough to give anyone a bad back.

If China and Japan go to war, it will affect us. It won’t matter whether the war is limited in military terms or only diplomatic and economic. We will be involved, willy nilly, because our economy depends hugely on both countries.

If the war is military, we might be involved in a big and disastrous way. After a century of conflicts around the world, we can never again have illusions of geographic or cultural immunity, as we once did with “that war in Europe.”

Dubya made abysmal decisions in foreign policy in part because he had no experience in that field, or with foreign cultures generally. He wasn’t even a seasoned American pol, let alone an actor on the international stage. His entire experience in public affairs (other than in his father’s campaigns) was six years as governor of Texas. He learned about the world outside our borders in a crash course from Prince Bandar of Saudi Arabia during his first presidential campaign. The results speak for themselves.

Mitt has even less experience in politics than Dubya did on becoming president: four years as governor of Massachusetts. He has zero experience in foreign policy, as his gaffes in Britain and Israel showed. It’s unclear yet who, if anyone, will be his Prince Bandar, but his words so far hint that his main concern abroad (other than jingoism to win elections) will be oil, just as was Dubya’s. His jingoism on China and Iran reflect the rawest and most naive misunderstanding of the world outside our borders that anyone could imagine from a leader of the free world.

Eleven years after 9/11, we know that Fukuyama was wrong. There will be no end to history until we humans extinguish ourselves in nuclear fire or pollution, or until we ascend to a higher level of intelligence and begin to solve our problems by cooperating.

If we Yanks are to choose the better path, we are going to have to have a leader with experience, subtlety, finesse and some understanding of foreign cultures. Mitt is self-evidently not that man. His election would put us right in the center of two gathering hurricanes without an umbrella, a raincoat or any visible means of escape.

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14 September 2012

The GOP’s Five Big Lies


[The GOP’s five big lies from 2008-09 are still around. But now the GOP has five new, more specific lies tailored to the 2012 campaign. Its PR hacks are nothing if not productive.]

Big Lie Number 1: Repealing “Obamacare” will reduce health-insurance premiums
Big Lie Number 2: Obama and the Democrats will weaken our armed forces and national security
Big Lie Number 3: Wind and solar power are uneconomic and won’t work
Big Lie Number 4: Cutting taxes and regulation and making government smaller will revive our economy
Big Lie Number 5: The President has failed

The presidential debates are coming up. In them, you will hear five big lies that Republicans and Fox have tried to get gullible Americans to believe. You’ll hear them over and over again, just as you already have. But endless repetition won’t make them true.

The five lies are big, gross and vile. They are big because they touch important issues. The realities they deny and distort affect the life and happiness of every American and our future as a prosperous and peaceful nation. If believed widely enough, they will make us dangerous to ourselves and everyone else.

The lies are gross because they are self-evidently wrong. They deny reality. Some of them belie even recent memory: all you need to refute them is recall longer than a gnat’s.

The lies are vile because their motivation is raw self-interest on the part of people who are already very, very rich. They undermine the interests of ordinary people, our nation, and our species. Those who promote them for their own enrichment are far from patriots; they are telling these lies just so they can continue to line their own pockets. And our Supreme Court has given them a microphone as big as their wealth.

Here are the five lies and the truths they contradict:

1. Big Lie Number 1: Repealing “Obamacare” will reduce health-insurance premiums.

As you may have noticed, Mitt has flip-flopped, once again, this time on “Obamacare.”

He no longer wants to repeal the whole thing. Now he wants to keep the parts that everyone likes, including coverage of pre-existing conditions, prohibitions against caps on benefits (so you don’t lose health insurance when you really need it), and letting kids under 26 use their parents’ health insurance. But Mitt still wants to repeal the heart of “Obamacare,” which will require and allow more than 30 million Americans to get health insurance for the first time.

Under “Obamacare,” government subsidies and a “mandate” (or a “tax,” as Chief Justice Roberts sees it) will pull and push those new insurance customers into the system. Mitt and the GOP want you to think the subsidies and mandate are, respectively, a giveaway to undeserving freeloaders and a gross infringement of individual liberties.

But in reality, they are neither. They are a way of lowering insurance premiums for everyone, including you.

All insurance depends on the size of the “pool.” A large number of customers in the pool each pays in a little money as a premium, in exchange for protection against rarely occurring losses like illnesses, injuries, fires, or auto accidents. The premium money from the entire pool pays the costs of reimbursing the few customers who incur the losses. The bigger the pool and the rarer the risks, the lower the premiums.

Insurance is that simple. There is only one important nuance: the collective premiums also have to pay for insurers’ administrative expenses and private insurers’ profit. But the basic rule is sound and universal: the bigger the pool, the lower your premiums. (For insurance, this rule supersedes the normal supply-demand rule for free markets: that increasing demand drives prices up.)

This rule applies especially to health insurance. Why? Because health risks are much more common than other insured risks, such as car crashes, floods and house fires. Most people go through their entire lives without a major car crash, flood or house fire. But only a very few lucky people avoid illness or injury, especially as they get older. Nearly everyone goes to a doctor now and then.

Because health losses are more common than other losses, the pool of health-insurance customers has to be bigger—much bigger—in order to keep premium prices down. That’s why every developed country but ours has some sort of national health insurance, a single-payer system with a huge pool. (Nearly all such big pools co-exist with private health insurance for more affluent people. But the basic national pool gives everyone, including the middle class and the poor, affordable insurance to keep them healthy and alive.)

We Americans spend more than twice as much for health care as citizens of any other developed country. Yet according to a recent global survey of customer satisfaction, 37% of Americans give our health-care system a failing grade. That put us tenth out of twelve countries surveyed—behind Portugal. (Figure 6.)

One reason is that our health-insurance pools are so small. Except for Medicare, we have no national pools at all. All our pools are balkanized state by state because we authorize and regulate all insurance state by state.

Within each state, we further balkanize insurance into pools offered by separate private insurers. Then within each private carrier, we further divide pools into insurance plans tailored for individual employers or employer groups. As a result, nearly all our health-insurance pools are wildly suboptimal in size for doing what insurance is supposed to do: spread the risk of costly but rarely occurring losses widely and reduce premiums.

It this analysis just theory? Not a bit. For the past year or so, the manic increases in health-care expenses have abated. What’s going on?

What’s going on is competition. There isn’t much competition in our broken health-insurance system because of its multiple kinds of balkanization. But already there is some competition among private insurers to attract those thirty-plus-million new customers that “Obamacare” will force into the system when its subsidies and mandate go into effect in 2014. Within each balkanized market, the large-pool rule makes competition intense because it makes each such market winner-take-all.

That new rules are only about sixteen months away. So health-insurers are already testing the waters by preparing limited policies with lower premiums. They know that these new customers will be price conscious, either because they don’t have much money or because they will be buying insurance just to avoid the mandate-tax.

Getting insurance pricing right is not an easy thing. It requires quantitative prediction of the highest order. And in a balkanized industry, it requires guessing what competitors will do. So insurance companies are already jockeying for position in the new market, trying to become the low-cost brand for all those new customers.

When “Obamacare” first became law, the insurance companies did just the opposite. They raised premiums for two reasons. First, they hoped to skim the cream of profits before various provisions of the new law went into effect. Second, they wanted to scare the public with higher premiums, arguing that the new law would raise them.

But now that Chief Justice Roberts has upheld the law, they know they can’t avoid it. Whatever happens in this election, there is no chance that the GOP will have the filibuster-proof majority that it needs in the Senate to repeal it. The cry for repeal is just another lie for gullible, ignorant voters’ ears, which will go nowhere.

So when “Obamacare” takes effect fully in 2014 (no matter who is president!), expect insurance premiums to fall, not rise. In fact, their rate of increase is already dropping as insurers jockey for that winner-take-all position in the coming market (actually, multiple balkanized markets) for thirty-million-plus new customers.

Expect that trend to continue well into 2014, and perhaps beyond. Watch what insurers do, not what their lying mouthpieces say. “Obamacare” will drive your health insurance premiums down, not up.

2. Big Lie Number 2: Obama and the Democrats will weaken our armed forces and national security.

Of all the lies that Republicans repeat interminably, this is the easiest to refute. Who killed bin Laden, after his two predecessors (one from each party) couldn’t? Who didn’t start a force-draining war to do it, but cleverly used our modern ninjas?

The President, that’s who.

Who has marginalized terrorists with drone attacks, ninjas, and financial and cyber countermeasures, without starting any new wars? Who has cleverly assisted the Arab Spring, which ultimately may kill the political pressure that supports terrorism?

The President, that’s who.

Who wound down one war (in Iraq) that was horribly costly in lives and treasure, among the longest in our history, and ended up accomplishing little or nothing besides killing Saddam? Who is winding down the other needless war (in Afghanistan) and has a plan to pull out American combat forces by 2014?

The President, that’s who.

Who replaced Dubya’s and That Idiot Rumsfeld’s useless and costly Maginot Line for Missiles with a much cheaper and more effective system to protect us and Europe from Iranian missiles? Whose decision did our ablest Secretary of Defense in recent memory, Robert M. Gates (who is a Republican), enthusiastically support?

The President’s, that’s whose.

Who continues our decades-long policy of nuclear arms reduction, thereby reducing the enormous expense and environmental hazard of maintaining a grossly excessive nuclear arsenal? Who is winding down wasteful expenditures on “conventional” (non-nuclear) big Cold-War arms systems so that we can spend a little on systems that meet twenty-first century challenges?

The President, that’s who.

In contrast, rashly flirts with jingoism, threatening a trade war with China and a real war with Iran, in order to disguise his utter absence of military and foreign-policy experience?

Mitt Romney, that’s who.

Slowly, subtly and effectively, the President has reversed the dumbest and most destructive foreign policy in our history: the “Bush doctrine” that anyone who harbors terrorists is our enemy. That childish policy implicitly declared war on some sixty countries, including some of our allies. It was partly responsible for two of our longest wars, which nearly bankrupted us.

Making war recklessly and wasting money on huge, obsolete Cold-War weapons systems won’t make us stronger. They will make us weaker. But Mitt and the GOP support these fools’ errands because they would enrich their business cronies.

The President has stopped the hemorrhaging and the stupidity and has redirected our military-industrial complex toward twenty-first century threats. He prepares cleverly to let us fight smart, if need be. And unlike Mitt, he and the Democrats actually care for our troops, making real plans to give them first-class care and civilian job training when they come home.

These policies have made every American more secure. They have made life better for our troops both when they fight and when they come home. Democratic policies promise to bring the last of our much-abused troops home in less than two years, and to keep more Americans from dying or being maimed needlessly. If you want more needless war and more useless, expensive, never-used weapons systems, plus less care and fewer civilian jobs for homecoming troops, vote for Mitt.

3. Big Lie Number 3: Wind and solar power are uneconomic and won’t work.

I’ve already devoted an entire essay to this lie. I won’t repeat all the analysis here. But the essential points are easy to restate.

Wind and sun are both free. They are working right now, all over the world, providing exponentially increasing renewable prower.

Wind and solar power have no fuel cost. Their operations create no pollution, global warming or other marginal (ongoing) costs. You have to build the plants and install the generators and smart grid, of course. But once you do that, the wind or sun gives you power for free. The only costs are amortized capital cost and maintenance.

So wind and solar power present a classic economic tradeoff of short-term investment for long-term gain. You have to spend some money up front. Then you get power for free, with no additional cost (except for maintenance), for as long as the plants and infrastructure last. We don’t yet know how long that will be, but we can have high confidence that long-term amortizedcosts will be far below what we currently pay for power.

As for capacity, a recent Stanford study of wind alone reveals enough to power all of human civilization seven times over. Solar power promises even greater capacity. A land area one twenty-ninth the size of Texas had enough sunshine to power the entire United States for 2005-2006. If you extrapolate that figure in time and space, there’s enough sun on the globe’s land areas now to power all of human civilization hundreds of times over.

There are many solutions for the intermittency of wind and sun. In the long term, a hydrogen-fuel economy based on electrolyzed water seems best. (Germany is working on a variant involving synthesized methane. [Second-to-last paragraph.]) In the medium term, large-area grids can average out local geographic variations in wind and sun, making their power reliable. (The Germans are building such a smart grid right now.) In the shorter term, nuclear power and cheap natural gas can take up the slack by providing easily variable “baseload” power.

So who is fighting hard to keep us from investing in free power that will not make acid rain, mercury pollution, or particulate smog, will not heat our planet, and won’t change our climate?

The fossil-fuel barons, that’s who. The Koch oil barons are the worst of the worst. They are not content just to sit back and reap the rewards of ever-increasing market prices for oil—a dwindling resource—and gasoline. They are spending millions funding propaganda to protect their vested interests by buying this election for the GOP. They fund Republican lies about energy.

The Koch Brothers’ motives are obvious: raw, short-term self-interest. But why is the GOP working so hard to protect an obsolescent industry? Doing so makes no economic sense. Exxon-Mobil, the world’s best fossil-fuel company, is already moving on from oil to natural gas. Two years ago, its management confessed that oil will only get scarcer, harder to extract, and more expensive as time goes on.

So why does the GOP support the likes of the Koch Brothers, when their interests are adverse to those of all energy users (everybody!), the public, and the rest of American industry? Because the Koch Brothers support the GOP with tens of millions for its lies.

The simple answer is the GOP is for sale. Anyone and anything that will support it the GOP in turn will support. It’s a party without ideals or principles, which panders to the basest human instincts, greed and fear.

That’s why it has become the party of extremists and the party of obsolete industry. And that’s why, if it wins, Germany and China, not America, will lead the global energy industry in the twenty-first century.

4. Big Lie Number 4: cutting taxes and regulation and making government smaller will revive our economy.

Of all the GOP’s big lies, this one is the most improbable. It’s not improbable that the GOP would tell it; the GOP has complete confidence in the ability of Fox and its PR hacks to make people believe anything. What’s improbable is that more than a minuscule fraction of Americans would fall for this lie.

Cutting taxes, cutting regulation and making government smaller has been the GOP’s game plan for at least thirty years, ever since Ronald Reagan took office in 1980. That game plane is not one for the country; it’s one for the big corporate money men who finance the GOP’s lies. They are short-term thinkers, selfish as sin, but they pay the piper and call the tune.

A Republican has been president for twenty out of last 32 years, or two-thirds of the interval since Reagan took office. Taxes are now the lowest they have been since the end of World War II. They are especially low on the rich.

During that time median real incomes have fallen for the vast majority of taxpayers. The middle class and the poor have fallen behind, while the rich have gotten richer. In fact, the rich-poor income gap is at a modern high. At the same time, we now have the largest government deficits since World War II. As Sarah Palin might say, “How’s that cutting-government thingy working’ out for ya?”

Have you ever heard of the Crash of 2008? You have to remember for yourself, because Mitt and the GOP don’t ever mention it.

According the a recent tally based on simple principles, it set us Americans back $12.8 trillion. And it all started before Barack Obama ever took office.

Our own economy and the global economy were doing fine before it. Yet since the Crash, we have had the longest and highest spate of unemployment since the Great Depression, and our economic growth has been anemic.

Cutting regulation caused the Crash. We abandoned the Glass-Steagall wall between investment and commercial banking under Clinton in 1999. Then the Fed, Fannie and Freddie feel asleep while mortgage bankers made lairs’ loans and investment bankers packaged them and sold them to banks and pension funds at home and abroad. The result was the Crash, which caused all our current difficulties.

The GOP admits that government helped cause the crash, but it fudges the precise reasons why. It tries to make you think government wanted the Crash to come.

That’s ridiculous! Among the very few government servants who foresaw the Crash was Byron Dorgan, then Senator from North Dakota. He accurately predicted it as he voted against repealing Glass-Steagall in 1999. No one else in government had a clue. And the regulators (the Fed, Fannie and Freddie) cetaintly weren’t encouraging the banks to make liars’ loans, let alone requiring them. The bankers did that all by themselves.

So how would cutting regulation fix our problems, when it helped cause them? How would cutting taxes on the rich, when for more than a decade they’ve already been the lowest they’ve been for half a century, and the cuts have yet to boost our economy?

The GOP doesn’t say. It hopes that people won’t remember even recent history. It hopes they won’t notice that its smaller-government prescription hasn’t worked in thirty years and helped cause the 2008 collapse.

5. Big Lie Number 5: The President has failed.

This lie just follows from the last, Big Lie Number 4. The GOP wants voters to blame the President for problems that longstanding GOP policies caused.

The Republican policies of cutting regulation—which Bill Clinton shamefully adopted in killing Glass-Stegall in 1999—were a direct cause of the Crash of 2008. In turn, the Crash is the source of all our current economic difficulties: our struggling economy, our high unemployment rate, our deficit-ridden states and local governments, and the epidemic of financial gambling that threatens to do it all over again.

The other major causes of the Crash were bankers’ greed and stupidity. Mitt, who is an investment banker himself, wants voters to forget that, too.

But all that’s just the beginning of this multipart lie. Not only do Republicans want you to forget who pushed (for decades!) the deregulation that let greedy bankers cause the Crash. Not only do they want you to forget that Mitt is one of those greedy bankers himself, and that his entire claim to executive competence comes from his private-equity banking work.

They also want you to forget that their man, Dubya, spent the lion’s share of our deficit by starting two off-balance-sheets wars and setting the precedent for bailing out Wall Street. Dubya had spent or committed 6.6 trillion dollars on bailouts before President Obama ever took office

And that’s still not all. Instead of helping the President dig us all out of the big hole they had dug, Republicans fought him every inch of the way. After Democrats took control of Congress in 2006, they used the filibuster 142 times more often than it had been used during the period 1917 to 1972.

So there you have it. The GOP made an unholy economic mess. It created a monstrous deficit by reducing taxes, starting two needless, off-balance-sheet wars, and bailing out Wall Street. Then, when the President took office, it refused to help him do anything to fix the problems it had caused.

Yet despite all the opposition, the Presidents’s policies saved GM, prevented a second Great Depression, limited the damage, wound down the two needless wars, killed bin Laden and strengthened our economy, albeit slowly.

That’s not a failure. It’s a success after thirty years of failed Republican policies, and despite vile, nonsensical, treasonous opposition.

According to a recent poll, zero percent of African-Americans support Mitt. If you want to know why, just think about history. African-Americans have lots of experience with this sort of treatment.

It’s an old Southern trick. You make an unholy mess. Then you hire a conscientious black guy to clean it up. As he works and sweats, you jeer from the sidelines, trip him up, and subtly sabotage his work. When his Herculean labor has cleaned up most of the mess, you point out the few parts he missed. You mock him for not performing miracles, despite all your sabotage. You declare him a failure, fire or demote him, and reap the profits his labor made possible.

African-Americans have seen this all before, for four centuries. Many have experienced this trick personally. So it’s not surprising that zero percent of them buy the lie. What’s surprising is how many whites can’t see what’s going on, right under their noses, when their and their children’s futures are at stake, too.

Our nation’s future depends on us all seeing clearly before November. If just half of us whites wise up, Obama will win handily, and we can do something about our troubles besides blaming Democrats for Republican failures.

Footnote 1: There are three reasons why the large-pool rule supersedes the normal supply-demand rule for pricing in insurance markets. First, insurance is an abstraction, not a physical commodity in limited supply. Any firm that can write one policy can write as many as it has customers, regulators permitting.

Second, with word processing, standardized policies, and electronic contracting—now available in all fifty states—the marginal cost of writing each additional policy is close to zero. Insurers can even set up automated systems to write contracts and verify payment.

Third and most important, the rule of large pools gives insurers an irresistible incentive to reduce premiums and attract more customers. As long as the pool of customers is large enough for collected premiums to cover claims, administrative expenses and the insurer’s profit, the insurer makes money. If the pool is too small, normal claims will cause the insurer to lose money. But the normal supply-demand rule works strongly on the customers’ side. As long as policy terms and insurers’ reliability ratings are similar, insurance is fungible, and customers will choose the lowest-price policy, every time.

Thus the large-pool rule makes insurance a winner-take-all market. This result applies in practice, as well as in theory, but separately within each balkanized state-carrier-employer market. It works well as long as there is competition in that market, i.e., as long as customers have a choice of insurers and plans and reliability ratings are similar.

Footnote 2:The figures for Texas are based on a total-US generating capacity for 2005-06 of 1.067 terawatts. [See last paragraph before “Replacing Oil.”] Our own Energy Information Administration projects [Figure 17] total global electric-power generation as reaching 23 trillion kilowatt-hours in 2015. Since there are 24 x 365 = 8,760 hours in a year, that means an average global generation of 2.625 billion kilowatts (terawatts), or about 2.5 times 2005-06 US total capacity. Thus an area of land about one-tenth the size of Texas could supply the whole world’s electricity from solar power in 2015.

Six years ago, the US had the capacity to generate about 40% of the power the whole world is projected to generate in 2015. That’s a much larger figure than the 25% of global resources we are supposed to consume. The difference is due to the use of 2005-2006 figures for US generating capacity, which is larger than power actually generated. But this rough calculation shows that there is ample bare land worldwide to satisfy human civilization’s appetite for electricity from solar power alone.

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05 September 2012

The Democrats’ First Day


[For my recent post on saving the New York Times, click here.]

As we now know from polls, the so-called “Grand Old Party” is 90% white. There’s nothing wrong with that: whites like me have a prominent place in this country. But the GOP Convention’s uniform hue—along with its tightly scripted party line—gave the impression of identical puppets dancing to some unseen movers’ tune. You could almost see Karl Rove and the Koch brothers pulling the strings.

The only human interest came from an aged and seemingly demented Clint Eastwood talking to an empty chair. In my mind, he conjured the spirit of the senile fool who cried “Get your government hands off my Medicare!” These are not the sorts of people you want running your government, with the fingers on the Doomsday Button.

What a difference the Democrats made! There were electrifying speeches. There were people who looked like America, not just on the floor but on the podium. There was enthusiasm for something besides bashing the President.

And there was quality: quality speeches, quality memories of things that really happened, and quality ideas. Most of all, there were empathy and compassion for all the suffering that thirty years of GOP policy failures have wrought, to which the GOP’s only response is blaming the President.

The two most powerful speeches came from African-Americans. Governor Deval Patrick of Massachusetts gave a line-by-line critique of Mitt Romney’s governance of his state. That has been Mitt’s only experience in elected office and his only claim to fulfilling public dreams, as distinguished from lining his own and private clients’ pockets.

Patrick had to clean up the fiscal and private-sector mess Mitt made in the Bay State, which was 47th out of fifty in the nation in job creation under Mitt. He deconstructed Mitt’s disastrous tenure as only he could do.

But there was more, much more. Not only did Patrick debunk the myth of Mitt’s governorship. He ticked off the President’s accomplishments and the GOP’s obstructionism and dark alternative vision. He also offered the most perfect grammar, diction and elocution that I can remember. (I’m a retired professor, and I notice these things.)

Maybe because Patrick is nearly blind, he focused more on the sounds he made. If so, his speech was a metaphor for the whole first day: overcoming hardship with work and determination, so as to offer a better quality of leadership to all of us.

Quality, yes. Substance, lots. And blame? A little, but based on facts and figures, not fantasies.

The icing on the cake was the First Lady’s closing address. She told of her love for the President and their kids, their family’s journey during the last three years, the president’s commitment to reducing human suffering, and his growth in office. She described where he and she get their values: from the suffering and struggles of their own families and from the President’s experience in working to improve people’s lives in blighted parts of Chicago.

The First Lady’s values point should be a constant campaign theme. With her razor-sharp mind (like the President’s, trained at Harvard Law School), she described how presidents make decisions. There are the Cabinet members, and there are advisers, and they usually disagree. They each have their own predilections and constituencies, and they see things differently.

A smart president like Obama wants it that way. He (and some day she) wants to hear all views and arguments before deciding. But as Harry Truman so beautifully put it, “the buck stops” on the President’s desk.

So how do good presidents make decisions? Do they trust in a publicly enigmatic private ideologue, as Dubya trusted Cheney? Or do they keep their own counsel? And if so, how do they decide?

As the First Lady described the President, the good ones trust their own values. There is no computer program that can make tough presidential decisions. Even if there were, the necessary data wouldn’t be there. Only the toughest decisions get to a president’s desk, and there is rarely enough information to decide on facts alone, let alone a single, reliable, decisive fact. So a president must prioritize and rely on his values—what he cares about most.

The First Lady made that point only after describing the President’s values at some length, and how he came by them. He cares deeply about ordinary people—the so-called “middle class”—and their struggles and suffering. He cares because his parents and his wife’s lived those struggles, and both he and she grew up with them. He and she remember because those were their formative years, and neither is yet old or complacent enough to forget.

The First Lady described convincingly how neither the President nor she ever lost those values and have them today. In contrast, Mitt was born into a prominent political family with wealth and power. It’s a wonder he wasn’t delivered by Caesarian section so his silver spoon woundn’t puncture his mother’s womb. And there’s no human sympathy in Mitt, only an unjustified certitude that his abstract economics theories will improve life for people other than their immediate and most obvious beneficiaries, namely, rich people like him.

The First Lady didn’t make this comparison explicitly, but she didn’t have to. When she said her husband’s values and character hadn’t changed since he became president, she didn’t make that comparison either, but she didn’t have to. Everyone who can reason understands that Mitt will be the same indecisive, flip-flopping, unfathomable enigma that he is today if (God forbid!) he should ever sit in the White House. Even he won’t know what he’ll do next.

When the First Lady spoke of the President’s honesty and integrity, she didn’t mention all those lies told in Tampa, but she didn’t have to. And when she spoke about humility and respect for others, she didn’t mention Mitt’s planet-sized ego or his campaign based entirely on bashing others. But she didn’t have to.

When the First Lady’s speech ended, she had done a brilliant hatchet job on Mitt without ever mentioning his name or his party. And she had done it in a way that all our parents always urged on us: nil nisi bonum, but about her husband.

There was much more. There was Julián Castro, San Antonio’s Latino mayor, who delivered a rousing and impressive speech combining praise for the President with the same sort of “let’s work together” theme that made Obama a national figure in 2004. Castro’s own unique contribution was something more: a theme of opportunity that should become a staple of Democratic politics through the election and beyond.

The great philosopher John Rawls once posed a powerful metaphorical question. Suppose you were a disembodied soul about to be infused into a random human body on Earth. Suppose you had no idea where or in whom you would end up—in what country or city, with what race or ethnicity, or with what sexual orientation. What sort of society would you want to exist for this “human roulette wheel” game? Would you want a society of equality of opportunity, as the US used to be, or would you want a society of a few winners and many losers, like France or Russia before their respective bloody revolutions, or like what may become of our society if Mitt wins?

The rational answer, of course, is that you would want an opportunity society. It would improve your chances of winning in life’s game. Today it would vastly improve your small chances of becoming one of the very few super-rich, as distinguished from the masses of struggling and confined middle classes or virtually hopeless poor.

John Rawls’ abstract and metaphorical question leads right to the idea and values of America. Equal opportunity, especially to education, is what put the President in the White House and what made us the strongest, richest and most envied society in human history. That theme, which Castro renewed last night, is not just a campaign slogan but our national anthem. It is a direct cause of our power, wealth and greatness.

There were others stars, too. There was Corey Booker, now Newark’s rising mayor (of rush-into-the-burning-building fame), likely destined for national prominence. There were the Governor of Maryland and ex-governor of Ohio, who gave rousing stump speeches and (in Ohio’s case) made a brilliant contrast with the current Republican-ideologue governor, who has become widely unpopular due to overreaching of Tea-Party proportions.

From a professional political point of view, the day was a grand slam, planned meticulously and delivered flawlessly. There was something for important “swing” ethnic groups like Latinos and key battleground states like Ohio.

But from a human perspective, it was much more. It reminded us all that politics is not just a game of chess with human pawns as pieces, or an argument about economic abstractions. It’s an enterprise in bettering the lives of real people in a complex, dangerous and ever-changing world. And in that game it matters that the leader of the free world be someone who cares about and understands the people he is supposed to serve.

The closing commentary inadvertently made this point. James Carville, a former Democratic operative, noted how flawlessly and beautifully the day had gone. So did others. Then a Republican spinmeister (whose name is not worthy of mention) refused to “join the general swoon.” He said, in effect, that voters must still decide whether the President’s failure to cure the economy quickly (after thirty years of GOP mismanagement) entitled him to a second term.

At that point, Carville nearly lost his cool. With evident frustration, he asked why supposedly professional commentators couldn’t recognize the simple, self-evident truth: that the day had gone splendidly for the Democrats.

Inadvertently, the nameless GOP zombie corroborated the day’s two main points. First, Democrats respond to facts and events. In contrast, the zombie, like a wind-up toy, reverted to his stale talking points, rather than responding to what had just happened. Just as the GOP’s answer to every question is lower taxes, less regulation, more pollution and more power to the powerful, his answer to every political question is “the president failed.” Why even bother to ask? (Whether it’s “journalism” to give such zombies a platform is another question, one I’ll address in a future post.)

Second, the Democrats care about people and facts, not theory. The zombie wanted to change the subject to a theory: Mitt’s tired abstract allegation that the President has failed. But the realities of the day were speakers polished and shining like multicolored jewels, radiant in their confidence, competence and caring for the people they serve. Now the question becomes whether voters will believe the evidence of their own eyes, or abstract propaganda planted in their minds by Fox.

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02 September 2012

Can the New York Times be Saved?


Since I refused to pay for what has increasingly become a propaganda organ for Wall Street, I don’t pay much attention to the New York Times.

I got tired of transparent apologies for the rogue bankers who destroyed an otherwise well-functioning global industrial economy and still keep it on the precipice. While it makes crude sense for a rag centered in (and on) Manhattan not to bite the hands that feed the whole island [start at “Fourth Estate”], that’s not what newspapers are for.

A newspaper is nothing without the trenchant skepticism and cynicism for which reporters used to be famous. It’s no excuse that the “industry” that supports Manhattan and keeps its prices famously exorbitant is on the hot seat now. It deserves to be there.

A rag that sits at the epicenter of our five-year-old global economic crisis and replaces investigation with sycophancy is worth nothing. It’s worth less than nothing when the best-recognized brand in news falls down on the job.

There were and are other complaints as well. Perhaps the next most important was a philosophy of news by, for and of liberal-arts majors. As compared to the other leading national “print” media—the Washington Post, Bloomberg.com, and even the Murdoch-raped Wall Street Journal—the NYT stands out for its dearth of reporters and columnists who ken math, science or engineering. Most of them seem not even to have mastered arithmetic.

Tom Friedman’s “gee whiz!” approach to routine, pedestrian engineering and software development brought me to the point of nausea. Even Paul Krugman, a Nobel-Prize winning economist, seems to have made a decision to downplay numbers in his columns. Whether that’s his or his editors’ decision I don’t know, but it appears to be part of the NYT’s culture.

If a picture is worth a thousand words, an accurate, meaningful number is worth at least a couple of hundred. Bloomberg.com seems to understand that point [search for “praise”]. But the Times’ editorial culture appears not to agree. The only NYT reporter whose command of numbers ever impressed me was David Leonhardt. He’s now the Times’ Washington Bureau Chief. That’s a well-deserved promotion, but it means he doesn’t write much any more. Where are his likes and mentees, if any?

So I gave up on the New York Times. I refused to pay to be propagandized and entertained by frustrated literary writers with no training in or knowledge of the fields that will make or break our nation and our culture.

Now two things suggest there may be hope. First, the Times does have good coverage. I still get its summary e-mails. (Unlike all the legacy stories linked in this blog, which are now “behind the counter,” these e-mails are free.)

The e-mails provide headlines and one-sentence leads for major stories. They’re a good marketing device for the Times. They suggest that its coverage is broader than that of Bloomberg.com, my current source of financial and business news. Yet the virtual absence of numbers in those messages also suggests that its reporters’ liberal-arts culture is, if anything, becoming more entrenched. The NYT’s problem is not coverage; it’s quality and relevance.

The second hopeful sign was a short article in The Economist of August 18 (page 59), entitled “From BBC to NYT.” Apparently Mark Thompson, the former director general of the BBC, is to become the NYT’s new chief executive.

That was not all. The Economist reported that the previous chief executive (Janet Robinson, since 2004), who resigned abruptly last December, had risen up through the advertising ranks.

When I read that, I thought “Aha!” What better way to corrode a newspaper’s investigative function and replace hard numbers with soft impressions than to put an advertising executive in charge? That’s sort of like putting a glorified accountant (Rick Wagoner) in charge of building cars, which is how GM almost went bankrupt before the Obama Administration rescued it. [start at “car guy”]

What was Arthur Sulzberger, the paper’s “hands-on publisher and chairman,” thinking?

Like the good mouthpiece for bankers and conservative ideology that it, too, is increasingly becoming, The Economist wonders whether a man who spent his career in government-supported media can solve the NYT’s most immediate problem: making money. But as Steve Jobs admirably proved, the way to make money is to deliver a good product. Price doesn’t matter much if your product is good enough. That’s especially true for newspapers (including on-line ones), whose subscription fees are hardly exorbitant.

If people will pay $50 - $100 per month for cell phone service, and similar amounts for Internet and cable, they can surely afford the NYT’s subscription fees. But the newspaper has to become the best in the world again. That means hitting Wall Street hard with investigative reporting, not advertising-driven obsequiousness, and getting a few reporters who care about numbers, economics, science and engineering on staff.

So Thomspon’s reign at the NYT gives me hope. The NYT’s decline, along with the rape of the Wall Street Journal and the immaturity of Bloomberg.com, has left our nation without a credible leading “print” news source. (The Washington Post has largely retreated into politics.) If Thompson can manage these two big tasks, he can resurrect the NYT and fill the gap. Then the Times will make money again and I, too, will subscribe.

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