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

25 January 2011

State of the Union

Once again, the President rose to the occasion. Once again, he shone as the adult in the room. Once again, he displayed native elegance and grace, lauding John Boehner for rising from sweeping the floor of his father’s bar to running the House of Representatives.

But this time was a bit different. This time, the President recalled his 2004 keynote speech that put him on the road to the White House. This time, with a salute to the empty chair of Gabby Giffords, he emphasized working together from the very beginning. This time, he re-established his centrist credentials by moving decisively to the center, focusing first and foremost on business and jobs. This time, the language of business—“jobs,” “exports,” “trade,” “innovation, and ”deficits“—was foremost in his lexicon.

It was a fine speech by a master politician, comfortable in his skin and his element, confident of his ability, and cognizant of prevailing political realities and of his place in history. Despite his unusual hue—which is now only background noise for all but the most rabid Americans—there was not the slightest question of who in that room was in charge.

And yet, and yet. When the President got to the obligatory punch line, “the state of the Union is strong,” I just didn’t believe him.

That was not his fault, of course. If all he had proposed in his speech actually comes to pass, we might become strong again, perhaps even in the not too distant future. His was a good plan, well considered and practical. It combined the best ideas of left and right with a humble and manly pledge to consider more.

But there, sitting behind him and to his right, was John Boehner. You had to wonder what was passing through his mind, as he frowned, got misty eyed, and squirmed and wriggled like a restless schoolchild in the seat he doesn’t deserve. You had to wonder if he forgot, if only for a moment, his solemn pledge to make the President’s dis-election his life’s sole cause. You had to wonder whether his first real act as Majority Leader—a futile symbolic attempt to repeal last year’s health care legislation—made him proud. You had to wonder if he understands any idea besides negating and obstructing others’. As I watched him and recalled his record, it suddenly hit me that, had he been my father, I would have run away from home as soon as I could walk.

The President’s erstwhile supporters have been so unfair to him. They expect him to make miracles. But there, in that single chamber filled with all the ambulatory members of Congress, was evidence why no miracles will come. There, prominent and up front, was Jon Kyl of Arizona, our champion and crusader for an instant replay of the Cold War. He didn’t even have the decency to nod or smile when the President cited the New Start Treaty’s approval. There was Mitch McConnell, no doubt recalling his own pledge to dis-elect the President as his highest goal, and no doubt seeing the likelihood of that happening recede by the minute.

It’s not the President that troubles me. It’s the rest of the sorry crew. As the camera panned around the room, I was looking at a gerontocracy. There were a bunch of tired, old, grey men and women, exhausted by futile and useless struggles and looking forward to more of the same. Almost to a man or woman, they seemed worn out, drained of life and energy. Several appeared to be sleeping in their seats. Few even listened to the President. The only life they seemed to show was after the speech, when the young ones asked the President to autograph their programs for their children.

But why should these lifeless specters listen? They have little hope of doing anything significant with the power they’ve been given. They all have their own agendas, their own playbooks. What’s most important to them is where their next campaign contribution is coming from and how they can take advantage of the next news inanity to make frat-boy points at their opponents’ expense. They are political automatons, going through the motions of governing without result or effect. If the President is the only one interested in governing a nation effectively—and so it seemed—not much will get done.

I liked a lot of the substance of the President’s speech. I liked his pledge to drop the tax cuts for the rich as soon as they have served their temporary purpose as economic stimuli. I liked his emphasis on energy, the issue most likely to bring us down in the nearest future. I liked his explaining the real and current benefits of his health-insurance reform and the fact that domestic discretionary spending is only 12% of our budget, so cutting it cannot eliminate our deficits. I liked his proposal to reform Social Security without cutting benefits for current or future retirees. I liked his salute to gays’ honest service in our armed forces, and his coupling that salute with an invitation to our forces to recruit on campus again.

Most of all, I liked his specific proposals on energy: to help put a million electric cars on the road by 2015 and make 80% of our electric power from alternative sources by 2035. But even if those things come to pass, they don’t mean much. By 2015, gasoline will probably be selling for $5 or $6 a gallon, so that the per-mile cost of electric driving will undercut the cost of gas by eight to ten times. All who drive a lot will want electric vehicles, especially if they come down in price with greater production experience. As for electric-power alternatives to dirty coal, if we don’t have them in abundance in twenty-four years, the runaway freaks of weather that are accelerating even now may make driving, growing crops and even living difficult under any circumstances.

I’d like to think that the recent election infused Congress with vital new blood. But I know that’s not true. The young ones are mostly misguided missionaries, full of ideological zeal and unprepared for their insignificance in an institution that values seniority above sense. They’ve been elected by idiots who haven’t the faintest idea what their real interests are and what is coming down the pike if we Americans don’t get our act together pronto.

Maybe John Boehner will finally internalize the great responsibility that now rests on his shoulders and rise to the occasion. Maybe he will dimly perceive his own decisive role in making or breaking our country. Maybe he and Mitch will now understand that their goal of a one-term Obama presidency is drifting out of reach, and that they ought to think about repairing a country in rapid decline. Maybe lightning will strike and galvanize the geezers I saw slumbering in our “chamber of the people.”

But do I believe that all this will actually come to pass? Honestly, no. People who’ve settled for years in a comfortable rut of negation and obstruction are unlikely to rise from it. Their continuance in the illusion of power, not to mention their money and propaganda machines, depends on their staying there. If they rise, it would be nice. But I’m not going to sit on the edge of my seat or hold my breath waiting for it to happen.

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21 January 2011

Update on Oil and Gasoline Price Projections

[For a brief post on the effect of the civil war in Libya, click here. For comment on assertions of a speculative effect, click here.]

On 15 December 2010, I posted my own projection of future crude-oil and gasoline prices, under the provocative title, “Four Dollars a Gallon by Next Summer.” My most pessimistic projection, per the title, assumed that OPEC would not use its reserve production capacity to keep oil prices down. My most optimistic projection (in my fourth-from-last paragraph) was for $4-per-gallon gasoline in 25 months, or by January 2013. That forecast assumed that OPEC would use all its reserve capacity to hold prices down but projected that its reserve capacity would run out in 1.47 years, with the price rise to $4 to follow, per my math, seven months later. These projections flowed from simple arithmetic: estimates of percentage increases in global supply and demand, assuming that oil demand growth would follow growth in GDP.

On January 11, our own federal Energy Information Administration (EIA) released its more optimistic projections. From the consumer’s perspective, we can summarize them as follows:

Time FrameWest Coast Gas PricePrice Elsewhere
Summer 2011$3.47$3.22
Summer 2012$3.59$3.34

The EIA was honest about the uncertainty of its projections. As it explained, “the current market prices of futures and options contracts for gasoline suggest[] more than a 25 percent probability that the national average retail price for regular gasoline could exceed $3.50 per gallon in the June through September period in 2011 and an 8 to 10 percent probability that it could exceed $4.00 per gallon in August and September 2011.” Presumably West Coast prices would be 25 cents higher—apparently a permanent regional price differential. (See EIA Projections, “Highlight,” third bulleted paragraph.)

This means that oil-industry insiders and high-volume users expect a better-than-one-in-four chance of gas above $3.50 nationally next summer, and $3.75 on the West Coast. That is certainly not inconsistent with my simple outsider’s arithmetic, especially as my pessimistic projection depended entirely on what OPEC will do.

No one can foresee the future precisely, and no honest analyst will say he can. So what’s more interesting than the EIA’s numbers are the assumptions on which they rely. By far the most important variable is demand/consumption, since there can be no assurance of significant additional supply (enough to budge oil prices) once OPEC’s reserve capacity runs out. That capacity is generally known, but its precise size is in dispute. So the EIA’s projections, as much as my own, turn primarily on estimates of global economic growth and the extent (highly uncertain) to which conservation and alternative-energy conversion might decrease the ratio of growth in oil use to economic growth.

The EIA is explicit about its growth assumptions. As it illustrates in a complex but fascinating chart, it expects “[t]he non-OECD countries . . . to account for all of the world’s [oil-consumption] growth over the next 2 years, with the largest contributions coming from China, the Middle East, and Brazil.” In other words, the fastest-growing parts of the global economy will set the pace for global oil prices and for gasoline prices here at home. Numerically, EIA forecasts global oil-consumption growth as averaging “1.4 million bbl/d in 2011 and 1.6 million bbl/d in 2012[,]” against a base of 86.6 million barrels per day (mbbd) in 2010. That’s an increase of 1.6% in 2011 and 1.8% in 2012.

And there’s the rub. Does anyone in his right mind expect the fastest growing parts of the global economy to grow more slowly than the developed nations? In its very own second “Highlights” paragraph, the EIA projects “U.S. real gross domestic product (GDP) grow[th at] 2.2 percent in 2011 and 2.9 percent in 2012, [and] world real GDP (weighted by oil consumption) grow[th at] 3.3 percent and 3.7 percent in 2011 and 2012, respectively.”

So the EIA’s own oil-consumption-growth figures appear to be inconsistent with its economic-growth figures, and the inconsistency appears to be on the optimistic side. In simple terms, the EIA appears to be assuming that oil demand will not track GDP growth, not even by half, and even in the most rapidly developing nations. And of course GDP growth in the developing countries that the EIA expects to account for oil-demand growth will be far higher.

I’ll leave it to readers to evaluate the plausibility of the EIA’s assumptions. For example, China reported [last paragraph] that its GDP grew by 10.3% in all of 2010. The fact that our own real (non-financial) economy is stagnant in every way (excluding a few excellent companies like Apple, Boeing, and Caterpillar), may give us a jaundiced view of the explosive growth in the developing world, which will account for nearly all of oil-demand growth over the next two years.

One more point is in order. The EIA’s global oil-consumption chart carefully avoids breaking out total consumption by region, as it did in 2003. Presumably, the gross per-capita overconsumption of the US and Canada, as compared to the rest of the world, hasn’t changed much since then. What that overconsumption means is that rising oil and gasoline prices will hurt us (and our friends to the north) much worse than they hurt any other nation or region.

Until we reduce our oil dependence, it will act like a brake on our economy. It will reduce our economic growth both when our own economy expands (as it’s still the world’s largest) and when the rest of the world’s expands. In other words, as long as we remain so oil-dependent, economic growth here and elsewhere will strangle our own, just as a condemned man’s struggling tightens the noose. So I repeat my question from my first post on near-term oil prices: isn’t it time we got serious about energy?

P.S. Personal Disclosure. In the interests of full disclosure, I must report that I put my money where my mouth is. I own two commodities indices, one of which relies one-third on oil, shares in several oil companies, long-term call options on Exxon Mobil, and shares in several mining companies whose products are used for alternative energy.

Assertions of a Speculative Bubble

Yesterday I finished reading Matt Taibbi’s Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. It’s a superb bit of economic reporting and writing, by a man who is not an economist and makes no claim to be. I recommend it highly to anyone who wants to understand what really happened to our economy since the turn of the century and who caused it.

Taibbi has credibility with me because he’s a quick study, extremely bright, a marvelously lucid writer and apparently afraid of no one and no subject, no matter how complex. All these qualities are desirable in journalists, and our mainstream media today nearly all lack them utterly. So Taibbi is, in my view, a national treasure.

What makes his book relevant to this post is his assertion, expressed in his Chapter 4, that speculation, in the form of newly minted commodities indices, caused much or most of the 2008 commodities bubbles. His reporting is credible enough to make me diffident about my positive statement to the contrary in my 2008 post, and to push me to attempt a quantitative explanation.

Taibbi’s case for a speculation-induced bubble rest on four facts he asserts, none of which I have any reason to challenge. First, the law once limited trading in commodities futures to those who produced and used the commodities, until Goldman Sachs and several other Wall Street firms got regulatory exemptions from those restrictions (in other words, a license to gamble on other people’s business) in the early nineties. Second, the regulatory authorities tried hard to keep those exemptions-by-letter secret, from the industry and the public, for nearly two decades. Those exemptions were what allowed Goldman and others to create and sell the commodities indices that now trade as ETFs.

Taibbi’s third point is his only quantitative one. From 2003 to July 2008, he reports, investment “in commodity indices rose from $13 billion to $317 billion—a factor of twenty-five in a space of a little less than five years.” Finally, Taibbi recounts the well-known 2008 bubbles in oil and food prices and reports that, for oil at least, expert insiders saw no reason for the bubble other than speculation and no serious imbalance between supply and demand. He concludes from these facts that speculation in commodities indices, whipped to fever pitch by sellers hawking their wares to pension funds and institutional investors, helped cause the bubbles.

Despite his irreverent and profane language (which in most cases is well deserved), Taibbi is accurate and careful about his facts. He never claims that this phenomenon was the sole cause of the bubbles, and he never estimates exactly how much the speculation contributed to them.

It’s one thing to say that money invested by speculators in commodities indices leaped 25 times in a few years. But without knowing the precise size of the various commodities markets, precisely how much of that speculation was long and short, and precisely how much of the investment came in the separate market for each separate commodity, that number tells us little. It tells us that a speculative effect is likely, but it doesn’t even nail down its existence unambiguously, let along its magnitude.

What makes the math even more difficult is that each EFT index includes six or more different commodities. Typically they include basic crops, oil, precious metals and industrial metals like aluminum and copper. So without knowing which part of the huge surge in investment went into each, it’s hard to estimate the magnitude of any speculative effect.

If the speculation was indeed mostly on the long side, which a steady rise in the actual prices of commodities tended to suggest, what was the reason? It’s hard to believe that hard-nosed pension-fund managers were engaging in the same sort of irrational exuberance that had burst the dot-com bubble just a couple of years before. If they all ran, herd-like, to play in commodities, there probably was a reason. Maybe it was the Malthusian effect of the rest of the world (other than North America, Japan and Europe) jumping on a rapidly moving global development bandwagon.

Does this mean I reject Taibbi’s conclusion? No. His reporting has convinced me that there probably was a substantial speculative effect. But how big it was we just don’t know.

If the speculative effect was as much as half of the total, it means that my timelines (and the EIA’s) for various gas-price benchmarks probably should be doubled. If so, we might not get to $4-a-gallon gas for four years, instead of two. But get there we will, eventually, because the vast majority of the human race is building internal combustion engines and becoming addicted to gasoline at an incredibly rapid rate, as if there were no tomorrow.

There is an irony in all this. In focusing on food, Malthus may have picked the wrong commodity. Crops are somewhat elastic in supply, for mankind can grow more of them just by clearcutting forest and converting it into arable land. Even if the land is less arable than previously developed farms, it still will grow something and increase the supply of crops. There is certainly some limit to the process, including the fact that cutting down all the Earth’s remaining trees will destroy the oxygen-carbon dioxide cycle that supports all life on Earth. But it’s not clear we are anywhere near that drastic stage yet.

Oil and metals are a different story altogether. There are only so much in the Earth’s crust, shallow enough so we can get them, and atomic transmutation (for metals) is far too slow and expensive. So as more and more people demand more copper, aluminum and oil to build and run their machines, they are all working overtime to increase demand beyond supply and therefore to raise prices. We simply can’t increase the available amount of these commodities the way we can with crops; the amount available to us was fixed when the Earth formed four billion years ago or (in the case of oil) when oil formed from the primordial ooze.

That simple fact may have been a prime motivator behind the over-investment in indices that helped cause the 2008 bubble. But that doesn’t mean the imbalance of supply and demand is not real. It just means that our estimates of when the imbalance will tip decisively against us are less certain.

The Effect of the Civil War in Libya

This post has been getting lots of hits since the civil war in Libya started. I hope that doesn’t mean readers consider me a genius for having predicted the recent (as of March 11, 2011) spurt in oil prices. I didn’t. I didn’t foresee the peaceful revolutions in Tunisia and Egypt or the civil war in Libya, let alone their effect on oil prices. That effect is a short-term phenomenon; what I’m predicting above are medium-term and long-term effects.

As I confess above, predicting oil and gasoline prices is part art, part science. So the reasons for any prediction are as important as the conclusions. My predictions above don’t account for the civil war in Libya; they’re based on the fundamentals of supply and demand.

Libya’s troubles support my predictions in one respect and oppose them in another. They show how precariously balanced are global supply and demand for oil, and how slowly the major producers like Saudi Arabia and OPEC are to respond to bottlenecks in supply. Libya is just the world’s twelfth-largest oil producer. When its problems produce a ten-percent rise in oil prices in just a week, you can tell the system has little slack.

On the other hand, the abrupt price rise also reflects a significant impact of speculation in commodities futures. I have downplayed that impact above. But it will play an increasing role in raising oil prices as more and more people (like myself, I confess) try to make money out of a deplorable situation: our political and business leaders continuing to ignore the clear and present danger of oil addiction for four decades.

As speculative excesses arise and pull back, oil prices will rise and fall. But despite this volatility, the “secular” trend will go nowhere but up. That’s the inevitable Malthusian consequence of our globe having passed Peak Oil but continuing feverishly to build oil-burning cars, trucks and planes, the plants to make them, and the roads to take them.

For my take on how to influence Libya’s civil war, click here and here.

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16 January 2011

The Forgetful Inventor, Whom Others Are Passing By

[For brief comment on the continuing political fallout of the Tucson mayhem, click here.]

How stupid do you have to be to invent something better than what came before and then not use it fully? How dumb do you have to be to let others take what you’ve discovered and build an industry, a society, or a new world without you? These are questions that every American should ask himself or herself every day, on rising and on going to sleep.

Nuclear Power.
Take nuclear power, for example. With lots of help from immigrant foreign scientists, we Americans invented it. We built humanity’s first nuclear reactor under a stadium at the University of Chicago in 1942. That’s 69 years ago, nearly three quarters of a century.

Now look at us today. Here, as of 2009, are the percentages of national electric power produced in nuclear reactors in a few key countries of interest (from this source):

CountryNuclear Share of Electricity (percent)
United States20.2

(There are also other countries that surpass us, but this list reveals the full flavor of our ignominy.)

Regulated Capitalism. We Americans didn’t invent capitalism. It was alive and well in ancient Rome. A Scot named Adam Smith first developed the theory of free markets and their “autopilot” operation in a book nicknamed the Wealth of Nations. Oddly enough, that book was first published in 1776—a date familiar to most Americans. Maybe that’s why we took to capitalism like ducks to water.

But capitalism in its raw form was and is an imperfect system. Dickensian England was a paradigm of industrial capitalism but a bit far from paradise. It was heavily polluted and vastly unequal. It had legendary London “fogs,” which miraculously disappeared with industrial effluent control, and which we now call “smog.” It had great masses of underclasses living in hideous industrial squalor, so that “gentlemen” and “ladies” could attend their elite clubs and dispense their occasional charity to children working long hours, seven days a week, in smoky, sooty, dangerous and disease-spawning mines and factories.

The terrible inequality and inequity of unfettered industrial capitalism nearly brought our own experiment in democracy to an end. In the early and mid-twentieth century about half the world tried an entirely different system based on state ownership of the means of production and a “command” economy run by political bureaucrats. Many of our working people and their leaders flirted with that system. After the world’s greatest armed conflict, another threatened to arise, this time between practitioners of this new system and capitalism.

Eventually, capitalism won. But in the meantime, we had invented an entirely new system, one between the extremes. It was called regulated capitalism, or a “mixed” economy.

We understood the power of self-interest and economic liberty in fostering industrial progress. But we also understood the danger of a powerful capitalist engine running amok without any kind of control. So we adopted laws limiting child labor, protecting workers’ rights to organize and strike, and preventing excesses of gambling, swindling and coercion by banks and other financial institutions. And, although we didn’t invent antitrust law (the British did), we advanced it to a new level, making sure that our law protected competition itself from subversion by powerful capitalists.

Even some leading capitalists themselves got into the spirit. Henry Ford discovered not only the assembly line, with its remarkable industrial efficiencies. He also discovered that, by paying workers a living wage, he could help them afford the marvels they built. That discovery created a whole new consumer society, something the world had never seen.

The apex of regulated capitalism came in the two decades after World War II. With its aid—and while “fighting” a worrisome, attention-distracting and very expensive Cold War—we rebuilt Europe and Japan and constructed the most prosperous, egalitarian, strong and happy society in human history. It was based on regulated capitalism, with free markets and free trade managed and guided by an enlightened government and kept open to newcomers with antitrust law.

So, with help and ideas from lots of others, we invented the strongest and most effective economic system in human history. And it worked.

But look at us now. We can’t even remember our own language. Our (private) organs of propaganda redefine words for us in ridiculous ways. They apply the word “socialism” to a society rapidly regressing towards Dickensian England. Europeans from the last century on both sides of the issue—for and against—would respond to this doublespeak with a derisive belly laugh. They knew what socialism really means because they fought (and many of them died) for and against it. They knew it means ownership and control of the means of production by the state, with capitalism and free markets dormant or nonexistent.

Of course no American with access to serious power has ever proposed such a system, and probably none ever will. We are a practical people, and socialism in its pure form just doesn’t work.

But while our right wing is busy redefining socialism to include a system backsliding into laissez faire capitalism, other nations are stealing our invention of regulated capitalism and running away with it.

What do you think China is? Don’t be fooled by its title, the “People’s Republic of China,” or the incongruous name of its single governing party. Those names are historical anomalies, perhaps tributes to the great leader (and later tyrant), Mao, who unified modern China and freed it from foreign domination.

Today China is no more Communist than is Texas. Its capitalistic businesses are so unfettered that they can kill children by putting melamine in milk and building schools that collapse in earthquakes, with very little pushback. (We’re no saints, either. We let our rogue bankers destroy our own and most of the world’s economy, with nary a slap on the wrist so far. Instead, we gave them bailouts and bonuses. But that’s another story.)

Yet China differs from us in one vital respect. Its government is much, much stronger than ours and therefore better able to regulate and guide private industry. With that strength it can direct massive amounts of money, effort and research into electric cars and windmills. And it can dampen the fervor of automobile mania, with all its risks of energy dependence, economic stagnation from rising oil prices, pollution and global warming, as easily as turning a dial on the governor for an accelerating engine.

Regulated capitalism is not socialism. It’s capitalism with strong government leadership, management and (at times) restraint, to protect the people, the economy and free markets themselves from capitalists’ excesses. Regulation also can keep capitalism from rushing down blind allies, such as building an entire industrial infrastructure on a form of energy in short supply and with rapidly diminishing global reserves.

Don’t be fooled by labels like “socialism” with shifting definitions. In substance, China is likely the most perfect example of regulated capitalism in the world today. It has taken the system discovered by our own Franklin Roosevelt and his “brain trust” and perfected it under an authoritarian, one-party government.

That government may leave a lot to be desired in the field of human rights and “democracy.” But economically it is perpetrating yet another theft of our American intellectual property—perhaps the most important bit of all.

* * *

There are many other respects, large and small, in which we Americans have become the forgetful inventor. All in all, they add up to an interesting and (for us) depressing phenomenon.

Unless war between major powers, catastrophic effects of global warming, or nuclear terrorism intervenes, the world as a whole appears headed for a global economic Golden Age, with or without us. That’s the meaning of global adoption of free markets, free trade, and capitalism, in various forms, as a common economic system. That’s the meaning of the surge of global investment in the “BRIC” countries (Brazil, Russia, India and China) and other less rapidly developing nations. That’s the meaning of the sudden rise of previously “unimportant” nations in wealth and stature.

As I’ve argued before, there is an irony to all this. The systemic structure that is responsible for all this inconceivably rapid global progress is largely an invention of the Brits and us. Yet we, like the Brits, are lagging behind because we seem to have forgotten our own best inventions.

From time to time, I’ll be bringing up other half-forgotten inventions in new posts. But these two are enough for now. Their simplicity in concept and their vital importance illustrate the general principle. How stupid can you be to invent something superior and important and then not even use it, letting others pass you by?

The McCain/Obama Rapprochement

I sense from my sitemeter that many readers have been scanning this blog for comment on the political fallout of the Tucson massacre. I haven’t posted on that topic because there’s not much to say.

The President gave a beautiful, moving, and pitch-perfect speech in Tucson this week. His grumpy erstwhile rival John McCain responded in kind, with the grace of his noble 2008 concession. These two events reminded us, respectively, why Obama is President and why we once admired a great-hearted patriot named John McCain, who seems to have disappeared since the general-election campaign of 2008 began.

This bipartisan show of nobility and statesmanship is heart warming. But let’s not get carried away. We always knew that the President can make a great speech. (His first book alone convinced me that, if he hadn’t gotten into politics, he might eventually have earned a Nobel Prize for literature.) Most of us hoped and trusted that some day the McCain we once knew and loved would overcome the “win at all costs” Dr. Jekyll that sold his presidential campaign to the ad-men, slime mongers and a clever female grifter.

But we need deeds, not words. We need problems solved. For us, the most important among them is energy. Oil prices are rising in accordance with the basic laws of supply and demand. They aren’t going to stop until: (1) global transportation switches to another source of power than the internal combustion engine, or (2) another global depression reduces demand. We Americans (and our friends the Canadians) will take the worst economic hit (we in an already reeling economy) because we depend on oil the most.

At the same time, practical evidence of global warming is becoming overwhelming. Did anyone besides me notice the large number of freak weather events this winter? We had Utah/Colorado-like powdered snow piling up in huge drifts in the streets of New York City. We had freak snowstorms in Europe and the Southeastern U.S., which shut down Heathrow and Atlanta, two of busiest airports in the world. We had unprecedented heat waves in South America, during their summer, and now unprecedented floods in northeast Australia, after a huge drought and a plague of orange dust last year.

Weather is not the same as climate. Instability in weather—along with an increase in the ferocity and number of freak weather events like these—is precisely what the theory of global warming predicts. Practical confirmation of that theory no longer depends on the steady melting of glaciers, the Arctic Ice Cap and the Antarctic ice sheets. It’s assaulting us and our global economy almost every month.

We are now on the rising part of the exponential growth curve of climatic catastrophe. It’s not just polar bears and undersea species who are threatened. It’s now us. Did anyone besides me notice the sharp rise in basic food commodity prices caused by all this freak weather?

The time for talking is long past. If we continue to fight each other we will all lose, first we Americans (because our economy is so fragile) and then the larger “we”, our human species. So while the McCain/Obama rapprochement offers a ray of hope in a very dark period, we need much more if we are even to hold our own as a nation, let alone prosper along with the rest of the world.

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12 January 2011

Versailles or the Marshall Plan: China’s Choice

[For my post on the “Second-Amendment solution,” which appears to be popular, click here.]

History often turns on how victors treat the vanquished. After the First World War, the victorious allies decided to “punish” the loser—Germany—in the lopsided Treaty of Versailles. Woodrow Wilson, our president then, was an ex-professor just like our current president. He thought that further punishing a badly damaged loser—even though it had started the war—was a bad idea. But he couldn’t convince European leaders.

Every educated person knows what happened next. Oppressed by demands for war reparations and economic isolation, Germany’s Weimar Republic suffered the worst hyperinflation of any developed country in human history. Unemployment surged, working people became desperate, and Hitler rose to power. About two decades later, 50 million people had been killed before their time.

The Second World War, which those punitive measures helped cause, became much more widespread and devastating than the First. Luckily, the Nuclear Age arrived only at its very end. Otherwise, we might be an extinct species, done in by our own hand.

But after that catastrophic war, Woodrow Wilson’s ideals prevailed, at least on our side of the Iron Curtain. Harry Truman (as President) and former general George Marshall (as Secretary of State) implemented the Marshall Plan to rebuild Europe and Japan. No reparations were required. Despite Germany’s and Japan’s respective atrocities during the war, there was no collective punishment. The Allies punished only a small number of top leaders in each aggressor. Instead, there was a concerted attempt to rebuild the vanquished and infuse them with democratic principles as quickly as possible. The result—despite the Cold War and some punitive measures on the other side of the Iron Curtain—was the most impressive run of global peace and prosperity in human history.

Now we Americans are the clear loser in what may seem, in retrospect, to have been a thirty-year economic war with China. No one intended it to be or become a war. But it seems to have turned out that way. Our economy is reeling, and China’s is bursting with prosperity and promise. No one with any sense of reality could possibly mistake which side is the winner.

So China faces much the same question that Europe faced after World War I and we faced after World War II. Versailles or the Marshall Plan? Do you kick the loser when he’s down? Or do you pull him up and dust him off, and, in so doing, earn a future of peace, prosperity, and stability, if not necessarily gratitude?

China could easily “punish” us if it chose. It could sell its nearly $ 2 trillion of dollar-denominated notes and bonds and drive the dollar into the toilet, causing rampant inflation here at home and destabilizing world commerce. It could simply continue its past mercantilist policies until it drained away all our brains and manufacturers and left us with nothing but gamblers and swindlers. It could turn to Europe and Asia for trade, as it is already doing, but it could also turn away from us. Then our toys and electronics and parts for everything would get more expensive, and our most promising present and future market—China itself—might disappear.

But China signaled yesterday that it would not take the Versailles path. It said it would let its currency (the renminbi) float, at least for business buyers, and at least in three markets—Hong Kong, Los Angeles, and New York—with emphasis on the latter.

This is a big, big deal. China will still try to “control” its currency generally in order to insure an orderly appreciation. But you cannot have a controlled and freely traded currency at the same time. China’s announcement is therefore a clear signal that China intends to let the renminbi float completely, at some unknown time within the relatively near future. This is precisely what our government and economists have been demanding for the last several years.

China has reasons for making this move, and not all of them are altruistic. If it keeps the renminbi artificially low, the dollar and Euro will stay artificially high, inflating the prices that Chinese must pay for food, manufactured products, components and raw materials from the US and EU, and distorting the global economy. High foreign currencies also would threaten to create financial bubbles in China itself, as wealthy foreigners and foreign corporations bought up assets cheaply in China, including prime real property.

If China kept the renminbi too low, the US and/or EU might go into economic collapse, with political implications resembling those of Germany’s Weimar Republic. Already the relatively mild economic pain that we Americans are suffering threatens to motivate a fascist takeover here. So China may be avoiding the risk of global destabilization, as the nation (ours) with history’s greatest stash of reliable nuclear weapons threatens to become ungovernable, belligerent and irrational. That is, China may be avoiding the mistake of Versailles.

It doesn’t matter much which are China’s real or primary motives. The mere fact of allowing the renminbi to float, if only in Hong Kong and here in the US, is a sort of economic Marshall Plan. It will allow our products to gain better traction in markets in China and stop, if not reverse, the drain of manufacturing jobs.

But that benefit will come at a price: making Chinese products, raw materials (such as rare-earth metals) and partial assemblies more expensive here. In making its decision, China appears to be relying on the views of our economic leaders, including Tim Geithner, Ben Bernancke and the President, that the first effect will outweigh the second and so will help to revive our economy and avoid the risk of a 1930s-style fascist takeover.

It is no coincidence that China made the announcement shortly before its President, Hu Jintao, is scheduled to visit Washington. It is also no coincidence, I believe, that the announcement came but days after the murders in Tucson.

From its own long and chaotic history, China is familiar with the spread of instability like a crack in a dinner plate. It knows how the assassination of a single archduke sparked World War I, which may have seen the most prolonged, utterly senseless carnage in human history. I believe in my bones that China’s leaders now fear a fascist takeover here and better understand the real risk of one than most of us do.

China is unlike us in many ways. Its leaders don’t boast, brag or congratulate themselves on the alleged perfection of their system, their economic victory, or the wisdom of their policies, as our leaders often do. They just let their actions speak for themselves.

But make no mistake about it. If China’s mini-economic Marshall Plan works as both we and China undoubtedly hope, it could usher in an era of global prosperity like nothing our species has yet seen. Then the only foreseeable threats to human happiness worldwide would be Islamist terrorism, global warming and the exhaustion of our oil supplies. If it fails, we could be seeing the prelude to a repeat of the last century, this time with nuclear weapons.

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09 January 2011

The “Second-Amendment Solution”

Everyone seems to want to know why a previously unknown gunman shot and gravely wounded Congresswoman Gabrielle Giffords (D., Az.), killed federal Judge John Roll and five others, and wounded about a dozen more. What were his motives? Were they political? Is he a right-winger, maybe a Tea Mob member? Was he out to get a Democrat, Giffords in particular, or just any handy government official?

These are the absurd and possibly unanswerable questions with which our media occupy themselves. Meanwhile, they ignore and (perhaps deliberately) obscure the really important questions.

How did this likely deranged person manage to get and keep an extended-cartridge semi-automatic weapon? And how did he manage to bring it to a political rally, apparently without a single objection or challenge, from the time he procured it to the time he committed mayhem? Whether his motives for the shooting were or were not political, the answers to those questions certainly are.

Google the phrase “Second Amendment solution,” and you will get 763,000 hits in less than two tenths of a second. Google the more grammatically precise version, “Second-Amendment solution,” and you will get 1,180,000 more, for a total of almost two million.

To my knowledge, the phrase did not exist as recently as the 2008 presidential election. It certainly did not exist in 2004, when an obscure state senator from Illinois named Barack Obama first thrust his way into the national political arena with a masterful speech about Americans hewing to the center and learning to get along. Its most probable origin is the Supreme Court’s decision in June of last year that the Second Amendment provides a “fundamental right” to keep and bear arms that no state or locality can take away. (McDonald v. Chicago)

So what does the new phrase mean? The chief modern justification for the “right to bear arms” used to be protecting oneself from crime. But you’ll look for that rationale in the results of Google’s search of the phrase in vain. A few posts imply that shooting illegal immigrants might be desirable. But the vast majority of promoters of the phrase imply—and some say outright—that the “Second-Amendment solution” is a proper response to “big government” in general, or, in particular, to the Obama presidency and/or the Democrats’ erstwhile control of Congress, just now ended.

You cannot read even a few pages from these Google searches, let alone the numerous on-line comments to news media and blogs that use the term every day, without coming to a firm but terrifying conclusion. There are now many people in this country who believe that armed violence, or the threat of it, is a legitimate form of political expression.

How did a presumably civilized society once based upon rational and respectful debate come to this pass?

Well, the first two words of the armed extremists’ mantra are “Second Amendment,” so let’s look at it. It’s a single short sentence, which reads as follows: “A well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”

To understand what this sentence meant when first written, you have to know something about context. When our Founders ratified our Constitution in 1791, there was no such thing as a semi-automatic weapon. Rifles outnumbered pistols (because they were more accurate and useful), and most had primitive technology that made them far less accurate than today’s counterparts. The average rifle then required muzzle loading, in which the powder and shot were loaded laboriously and separately down the length of the entire barrel—a process that took as much as a minute or more.

So in the context of that time, it would have been utterly impossible for a single person to do what Giffords’ shooter did. After the very first shot—whether or not it hit anyone—the unarmed crowd would have overwhelmed, disarmed and subdued him. So point one is a simple fact: personal small arms create an infinitely greater threat to life, limb, personal security and public order today than they did when the Second Amendment was drafted.

The second point of context relates to the preamble, concerning the “well-regulated Militia.” There has been much debate about whether this clause expresses a condition, the reason, or merely one of several reasons for the right. But two facts are indisputable. First, there was no standing army in constitutional days. To fight our War of Independence against the British and their Hessian mercenaries, we had to raise special armies (at first, separately and specially in each state). We had to find money and means to pay them and arm them, and we did so ad hoc, as the need arose.

The second indisputable fact is that our revolutionary soldiers nearly all brought their own arms. Fortunately for our independence, they came overwhelmingly from rural areas. Many lived on farms or in near wilderness. They needed (and they had) firearms to shoot game and slaughter livestock (both healthy and sick) and to protect themselves from wild animals and infrequent attacks by native Americans.

So when our soldiers came to fight for our independence, they came with their own weapons, which they had bought themselves, knew well and assiduously maintained. Those who didn’t have their own firearms brought pitchforks and other sharp farm implements, made into makeshift spears.

The natural interpretation of the Second Amendment is that our Founders expected that practice to continue, sparing the public fisc from the burden of military supply. In other words, the “right to keep and bear arms” was a way of supplying a collective army by private means, in a form of what today we would call “partial privatization.”

A moment’s thought suffices to show that none of these rationales applies today. Small arms, especially when automatic or semi-automatic, are infinitely more dangerous and deadly than in 1791. The vast majority of our citizens don’t need them for protection or their livelihood because they live not on farms or in the wilderness, but in cities, where professional police forces (with far better skill, training and equipment than the average citizen) protect them. And we don’t need our troops to supply their own weapons because we have built up a vast military-industrial complex far more powerful and advanced than anything to which private citizens could aspire.

So none—not one—of the common-sense historical rationales for the Second Amendment applies today. Yet our Supreme Court, in its wisdom, and virtually ignoring the Second Amendment’s preamble, ruled that it imposes a “fundamental” personal right to bear firearms, in cities as well as the country. That right, said the Court, cannot “be infringed” by state or local government. And the Court, for future reference, essentially arrogated to itself the power to decide what types of weapons that “fundamental” right includes and under what circumstances. (No one ever thought that the right includes heavy weapons, whether cannon and howitzers in colonial times or machine guns and nuclear missiles today.)

More important, several members of the Court hinted that the Second Amendment was designed, at least in part, to allow free citizens to protect themselves against their own government. That rationale, of course, is almost impossible to draw from the text of the Amendment itself, which refers specifically to “the security of a free State.”

So if you want to know who is ultimately responsible for Congressman Gifford’s critical condition and Judge Hall’s murder, look to the top. Look to the five justices who supported the majority opinion in McDonald v. Chicago, namely, Alito, Kennedy, Roberts, Scalia and (for different reasons) Thomas.

These five men are responsible for perpetuating a “fundamental right” to bear arms, which neither states nor local government can infringe, and for twisting the meaning of a single, clear sentence two centuries out of historical context. More important, by labeling this “right” as “fundamental” and hinting that its purpose was to protect against governmental abuse, they set in motion a chain of consequences that anyone with the slightest understanding of cause and effect could foresee.

Now we must reap the whirlwind that they have sown. Their decision is one of a piece with Citizens United, which allows the men (most are still men) who control the corporations that provide our daily necessities to use the profit portion of money we pay for those necessities to propagandize us and corrupt our leaders. It remains to be seen which of those two intellectually and socially corrupting decisions will lead more quickly to the destruction of our society and the “ordered liberty” that these justices so pathetically claimed they intended to preserve.

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07 January 2011

Vital Numbers

[For the latest on electric cars, and what now appears to be a three-way race between the Volt, Leaf and Ford Focus, click here. For a preliminary report on Ford’s announcement and Website, click here.]

1. Finance’s share of total business profits
2. Per-capita oil dependence
3. Other vital numbers, such as the inflation rate

We Americans live in a society governed by lawyers and words. Politicians (who are mostly lawyers) and broadcast propagandists act as advocates, using words to bend facts to their preconceived conclusions. Professional scam artists—also known as marketers, advertisers and public-relations people—have made twisting words, or using words to twist facts, a high art (see 1 and 2), if not a science.

In such a society, it is useful from time to time to think of numbers. Mark Twain once referred to “lies, damn lies, and statistics,” implying that numbers may be even more slippery than words. But that’s not entirely true. Just as body temperature, blood pressure and blood oxygen can gauge the health of a complex human organism, some numbers accurately reflect the health of a human society.

1. Finance’s share of total business profits

One such number is the percentage of total business profits arising from the finance sector. When human societies developed money, it was just a means of exchange, a mechanism for trading in things that have obvious intrinsic value: food, clothing, shelter, weapons for defense and (later) education, enlightenment, and entertainment.

We humans make money by producing a myriad of goods and services. At the most basic level, we mine minerals and metals and farm food, wood and decorative flowers. In a modern society, we turn these basic commodities into a bewildering variety of products, from furniture to toothpaste, iPods to rocket engines. In the process, we provide services from cutting your hair and repairing your teeth to replacing your kidneys, keeping your books, fixing your car or computer, and calculating your taxes.

In a healthy society, you might think that these many activities, all of which have real intrinsic value, would take precedence over handling money, which has value only by virtue of the things it can buy. You therefore might guess that finance would comprise maybe ten percent of business profits. Oddly enough, some of the oldest “laws” in human culture would roughly agree with you. The Bible sets the maximum interest rate at 10%, the Qur’an at zero.

So when the share of our own business profits derived from finance reached 41% a few years ago, you could tell we were a sick, sick puppy. It was like having a body temperature of 107.

The share has dropped a bit since then, but it’s still way too high. As the global finance sector cranks out more and more derivatives—many of which are functionally equivalent to money—our collective body temperature threatens to rise again. Ignore a fever and it can kill you.

2. Per-capita oil dependence.

Another such vital number has come to my attention recently. That’s the extent to which our society (and Canada’s, too) depends on oil for energy. This simple graph, produced by our own Department of Energy, tells it all. We and Canada use eleven times as much oil per capita as the entire developing world, including the BRIC countries.

Why is that number so telling? Well, to paraphrase Will Rogers’ joke about land, “They ain’t makin’ any more oil.” Regardless of when it actually starts to run out, it’s getting more and more expensive and difficult to find. Worse yet, its economic inelasticity, which increases daily with greater global commitment to internal combustion engines and their infrastructure, plus rapidly rising standards of living worldwide, condemns us all to steady and inexorable price increases, including some in the near-term.

In that sort of world, the societies that have the highest per-capita consumption are at a severe disadvantage compared to others, especially if they are in debt. Both characteristics describe us accurately. Like high body temperature or low blood oxygen, our extraordinary dependence on a commodity in limited supply, whose price will rise inexorably over the next few years, will exacerbate every one of our other real problems, including debt.

3. Other vital numbers, such as the inflation rate.

Other numbers also serve as vital barometers of a society’s health. One that is already well known is the inflation rate. In the Weimar Republic, an inflation rate exceeding four digits utterly destroyed Germany’s economy, leading to Hitler’s rise to power, Nazism, and the untimely deaths of some fifty million people. Some number!

Today we are well aware of the inflation rate as an important economic barometer. That’s why our own Fed obsesses regularly over it. Likewise, virtually every advanced society on Earth has a central bank that watches it like a hawk and uses every trick of monetary (and sometimes fiscal) policy to keep it down. As a result, Argentina’s post-Peronist hyperinflation was short lived, and the only nation suffering it now is Zimbabwe.

But just as medical science no longer contents itself with measuring body temperature, modern economics and politics should not rely just on inflation rates alone to gauge the health of their societies. There are other simple, easily comprehensible numbers that can help do that job.

In this essay, I have suggested two. The percentage of total business profits attributable to finance reflects the extent to which gambling and swindling and unofficial (private) monetary policy have overtaken (and therefore subverted) a society’s economy. The per-capita consumption of oil for energy reflects the degree to which a society’s energy infrastructure is backward, vulnerable to price shocks and steady Malthusian price increases and likely to lead to economic ruin.

There may be other numbers equally simple and useful. In this blog, I will try to discover and explain them when I can, and I’ll refer back to this post to explain their general significance. If we are able to monitor our economy’s and society’s health with simple, indisputable numbers, maybe we can return to proper health before sterile ideological debate ruins us entirely.

Ford’s All-Electric Focus: Preliminary Report (1/7/11)

One of the best and nearest-term expedients to reduce our per-capita oil dependence is electric cars. Today Ford formally announced its all-electric Focus at press conferences at the Consumer Electronic Show and in New York. While the announcement was sketchy on detail, including range, price and initial production quantity, Ford’s Website provided a few more.

Two points stand out from the announcement. First, Ford reportedly promised to produce five electric models in the US by 2012. No doubt this number includes Ford’s existing two hydrids and one commercial electric [same link, click on “HYBRIDS & EVs” tab at top]. So that means one other electric (or hybrid) besides the Focus. Second, Ford declined to specify the range of its all-electric Focus. That refusal makes engineering and common sense: range will depend upon terrain and temperature, among other things. Already GM has gotten into trouble by implying (falsely) that the range of an electric car is an invariable number like the range of a gas-driven car.

Ford’s Website shows a similar sophistication. Recognizing that the car will be an electrical product, it focuses on all the electronic gear to come with it. Most important among them is a set of graphic navigation and operational screens that will help drivers monitor their remaining range and locate remote charging stations as needed. These features address the chief marketing hurdle for electric cars: what I call “range anxiety.” The Website also notes the charging time with 250-volt equipment: three to four hours.

While Ford declined to specify a range, its Website did reveal the capacity of its lithium battery system: 23 kilowatt hours (kWh). This capacity compares favorably with the Leaf’s 24 kWh battery and is almost 50% higher than the Volt’s 16 kWh battery capacity. Specifying the battery capacity only, rather than a nominal range which will vary with driving conditions, once again emphasizes Ford’s understanding that an electric is not just another gas-driven car.

So far, so good. Ford’s spare but well-considered Website suggests that its engineers have informed its marketers of the essential characteristics of electric cars. Its announcement suggests some corporate commitment to the concept.

What remains to be seen is how deep that commitment is. How many all-electric Foci does Ford plan to produce? When will they be available in showrooms? Will they go to all states, or just a few test markets? And most important, what will they cost?

Ford’s announcement was a desperate attempt to avoid complete loss of the first-mover advantage. But since the Volt increasingly appears to be less than a real electric, and since the Leaf is of foreign design, Ford has said enough to get me to wait to learn more before buying a Leaf. Having waited most of my 65 years to drive electrically, I guess I can wait a few months more to make the right choice. Since I now live in a state that is unlikely to be a prime test market, I may have to wait even longer.

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01 January 2011

Can Europe Help Save Us?

[For the latest on electric cars, and what now appears to be a three-way race between the Volt, Leaf and Ford Focus, click here.]

[My last post before 2011 outlined our nation’s two most critical and immediate problems: (1) reducing our energy dependence before it destroys what’s left of our economy, and (2) curing our ideological disease before it kills us. A recent comment to that post got me thinking just how important problem (2) is. The comment, apparently from a German (maybe an East German), is one of the most important and interesting that I have yet received. So I’m taking the liberty of reproducing the entire comment below, with my response.]

Comment [with minor editorial changes] from an anonymous reader, apparently in Germany, on my last 2010 post

Let me begin by stating that Your [anonymous] comments in the NYT are always a refreshing and pleasurable way to learn new things.

Secondly, as a European, I am possibly somewhat more alert on the undeniable “soviet” undercurrent I see in America’s daily political madness. We have been “close to the fire” for years (I am of 60s vintage) and have seen the cold war develop from a rather difficult, but educational, position in-between, so to speak.

The way I see right-wing propaganda spout total untruths reminds me of Goebbellian propaganda too. There is a joke/saying here that states the following: “America has learned much more from Nazi Germany’s scientists than just rocket technology.”

There clearly is also a total divergence of culture going on between the “old” and the “new” world. Strangely enough, we are seeing the new world fall into the same traps that have marred Europe for ages: greed, religious strife, military enforced nepotism and egotism.

Europe learned the hard way that cooperation is a necessity for survival. The same thought hasn’t completely sunk in on the right in America, it seems.

The “left” (although, in European terms more “center-left”) knows it already, but constantly squanders the ability to do something about it by either internal strife or underestimating the pure evil and rucksichtsloses [German for “recklessness”] undercurrent in the Right-Wing.

The left’s habit of “wanting to do the right thing” is used expertly as a weapon by the Right-Wing hawks.

I consider myself lucky to be living in Northern Europe, where a general attitude exists of “taking care of the weaker parts of society.” Even our “right” doesn’t dispute pensions, accessible healthcare, etc.

I know the American side of the equation all too well, having family in LA. The situation for them has become so dire that we started to send THEM money to survive, while in the 60s THEY were the people that supported my parents when in a financial rut. Things completely inverted, bizarre as that may seem.

Well, enough blabbering. Looking forward to many more things to learn in Your sound posts.

[Signed, Anonymous]

My Response and Plea to this Commenter

Dear Anonymous,

Thank you for your vote of confidence and for your helpful observations.

For me, the most important part of your comment is the second-to-last paragraph. I urge every one of my readers to scan it—several times. The fact that at least one German family that once got help from its American relatives during the postwar period is now having to support those same American relatives should give us all ground for sober reflection.

The most chilling part of your comment is the observation that we Yanks learned more from the Nazis than rocket science. Apparently this view is common in Germany.

At first—with typical American twisted pride—I wanted to object. Hadn’t our own Fox surpassed Goebbels by delivering propaganda in the form of entertainment, thereby making it easy to swallow? But then I recalled Goebbels’ path-breaking effort (only partially successful) to recruit the best German movie-makers, singers and other artists to the Nazi cause, and the classic propaganda films that resulted.

There is, however, a subtle difference. Goebbels tried to use highbrow culture, while Fox is as lowbrow as they come. At the time Germany was only a generation away from the height of its own culture, and possibly the world’s. So Goebbels went for gloss. Rupert Murdoch’s genius is to bring Goebbels down to the level of the common man. I say “man” because, while I can’t prove it yet, I think Fox’s propaganda, with its unique brand of self-righteousness, intransigence, and undertone of near-violent anger, is peculiarly masculine. I doubt it appeals to as many women as men.

Beck’s and Limbaugh’s rants, for example, bear more than a passing resemblance to Hitler’s, but without the screechy voice and angry, abrasive delivery. They show what Hitler might have accomplished if only he’d had some media training, a more attractive personality, some talent for diplomacy, and the good sense to listen to his smarter advisers.

You and I can look at this all with a sense of bemused detachment. We probably won’t live to see the global cataclysm that an American replay might cause. But the world cannot.

I have long been skeptical of the common view here that Nazism overtook Germany because of some fundamental racial or cultural difference between Germans and the rest of us. Many here think Germans are inherently more authoritarian, more paternalistic, and more prone to obey without thinking. Maybe there’s a germ of truth in that view. But most Americans forget (or don’t know) that, just a generation or two before Hitler, Germany was at the peak of global culture in music (Beethoven, Brahms, and Mahler), literature and poetry (Goethe, Heine, and Schiller), science (Einstein, Schroedinger, Planck) and mathematics (Euler, Gauss, and Lorenz). At that time, Germany was close to, if not at, the pinnacle of creative abstract thought for all of human history. Yet in a mere few decades it had morphed into the most beastly tyranny and history’s greatest threat to civilization.

Anyone who thinks the same thing can’t happen here in America is whistling past the graveyard. You have only to read the average on-line comment on almost any editorial in the Wall Street Journal to see how. The repeated name-calling, the absolute and virulent contempt, the undertone of incipient violence—all are there. All you have to do is replace “Jew” in Hitler’s rants with “liberal,” “Democrat,“ or “freeloader” to see the resemblance. There is no rational dialogue here, only stereotyping and scapegoating and an incitement to political obliteration, if not outright violence.

In a nation that prides itself on racial and ethnic equality, it would be impossible to stereotype and scapegoat a single ethnic group as Hitler did. The recent rejection of “don’t ask-don’t tell” showed that. So the undertones of racism here are all covert.

But Fox and its enablers have done the next best thing: they have managed to oversimplify, stereotype and scapegoat an entire portion of the political spectrum in Hitlerian terms. And without ever saying so, they have accomplished this feat by playing on semi-conscious racism against African-Americans, Hispanics and (more recently) Muslims and associating the scapegoated groups with the inimical portion of the political spectrum.

Why use just one ethnic scapegoat when you can exploit several? Hitler and Goebbels showed the way, but we Americans have done better. If you have several scapegoats, you can play them off against each other, as well as the majority against all of them.

At this point the propaganda has subverted only a minority of the American public, variously estimated at from one-quarter to one-third. But if the matches that Fox and its supporters have struck ever come close to a majority, the resulting conflagration will engulf the world, just as Nazism did. Don’t forget that we Americans have the world’s largest stash of reliable and accurate strategic nuclear weapons.

Our Constitution is of little help. Like William Randolph Hearst before him, Rupert Murdoch has one decided advantage over Goebbels. He is not an employee of the State. His empire is entirely private. And—in a state where private enterprise is sanctum sanctorum—that makes it largely immune from the checks and balances that are supposed to restrain our government.

The rest of the world, including Germany, has a vital stake in making sure that the terrible history of Nazism doesn’t repeat itself here, with the inevitable peculiar American variations. That’s why I welcome your comment, and why I hope we Americans will see much more of the same.

For decades now, we Americans have been giving Europe lots of unsolicited advice. Now is the time for Europe to return the favor. Europe (including the UK) is the ultimate source of most of our American culture. As you rightly note, she has a sober maturity derived from several centuries of religious, ideological and imperial upheavals. Whether we know it or not, we Americans have a lot to learn from Europe. (The same is true of Asia, but Asians have much higher barriers of language and cultural prejudice to overcome here.)

So I urge you and other Europeans to make a concerted effort to enlighten us. Meddle in our internal affairs as much as you can. Tell us of your personal and cultural experiences. Use whatever method you choose, whether comments in on-line newspapers, letters or e-mails to your American relatives, or your own English-language blogs. Google now makes translation easy, especially if (as most Europeans do) you already have a good basic grasp of English.

We Americans probably won’t seem to listen, because we are “exceptional” and “Number One.” But all we humans are now in the same boat—the same rapidly diminishing planet. So be assured that your voices will be heard, if not by all of us, then by many. And the world you help save may be your own.

P.S. The German word “rucksichtloses” in your comment suggests that you already used Google translation to help prepare it. Google probably wasn’t smart enough to recognize the typo in “rucksichtloses,” i.e., the missing “s” in the root “rucksichtslos,” which means “reckless.” (Google Translate recognizes typos and makes corresponding suggestions in individual words, but apparently doesn’t do so in whole passages.)

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