Tea Partiers sabotage attempts at deficit reduction by insisting on deficit reduction!

This article reports on a poll showing a majority agreeing that Romney would be better able to end Washington gridlock. It mentions in passing that doing so will be important because, "And tea partyers who stymied efforts to reach a deficit-reduction deal seem certain to remain a substantial presence." 

--Yes, those darn Tea Partiers, who stymied efforts to reach a deficit reduction deal by insisting on deficit reduction! That is the problem! If not for those crazies from outside Washington the pros could have quickly converged its usual consensus on increasing spending a bit more slowly and increasing taxes a bit more quickly. 

Economist Endorses Obama

I find it so strange when economists and people trained in economics endorse Obama. Here is the Economist's Leader doing the deed.

The article is very strange. It lays out the case against Obama admirably and then endorses him saying at least he staved off catastrophe.

The case against Romney is that he has tacked to the right in the primaries. He was a good, centrist, compromise seeking governor of Massachusetts but he has since taken no new tax pledges and must be considered likely to continue appeasing right-wingers in his party, the "head-bangers" as the Economist calls them. He is also guilty of appeasing the right wing on social causes and is pledged to nominate judges that would overturn Roe v. Wade. He is against new taxes, vague on what loopholes he would eliminate in order to lower the rates, will keep defense spending at 4% instead of letting it drift down to 3% of GDP and will generally give in to the parties increasingly "Southern Fried" style of social policy allowing more decisions to flow back to the states. The paper says that it longs for an open, tolerant Ronald Reagan like conservative.

And that is what is so bizarre. For the litany the Economist rolls out is a very good description of a Ronald Reagan conservative.

Technology and Benghazi

David Ignatius says in regard to the failure to give air support to the defenders of the Benghazi Consulate and CIA annes that "it may indeed have been wise not to bomb targets in Libya that night."

Maybe someone should explain to David Ignatius (and President Obama) that they have these things called laser guided bombs and laser targeting devices. Tyrone Woods died with one in his hand, fixed on the mortar that killed him, waiting for the help that never came.

He continues, "U.S. officials needed better intelligence. That’s the toughest problem to address, but the most important." No. They need more guts. And it is the simplest problem to address. Plan on addressing it next Tuesday. 

Ok, once and for all, it is not whether or not President Obama said the word, "terror," it is whether he admitted that it was a pre-planned attack or a protest over over a you tube video. Both of these could be called an act of "terror," though there is a tendency to use the word to apply more the former. The fact is that the Obama administration has lied. They tried for almost two weeks to tell a story of a demonstration getting out of hand when in fact an al Qaeda affiliated terrorist group planned an attack to coincide with the anniversary of their greatest victory and in retaliation for the drone attacks that have, to President Obama's credit, have taken out many of the top leaders of al Qaeda.

You don't have to believe in conspiracy theories to disbelieve the September jobs report. 

An economist's defense of pirates--well, who else would defend pirates. I mean, if there were a defense of pirates it would be the economists that find it. But the interesting thing is that the defense if not economic but political. Professor Leeson finds that pirates governed themselves democratically in a world ruled by absolute monarchies. Who knew? 

The Romer's (remember that Christina Romer was the head of President Obama's Council of Economic Advisors) have a paper out that shows much higher wealth destroying, "contractionary" effects for tax increases than economists had previously estimated. Most of the effect comes from declines in investment. This is particularly important both because it is a particularly good paper by leading economists and because it is an "admission against interest," in other words it is an argument that supports the policy preferences of the right though it comes from researchers on the left.

The debate about higher taxes on the rich should not be about whether we can raise more tax revenues by lowering tax rates so much as whether we will be a wealthier society by lowering tax rates.

Berkeley Economist Christina Romer

The Charity of the Mandarins

Here is a link to an analysis of Romney's income, taxes and charitable giving. It has been widely remarked that Romney's tax rate was just under 15%, a fact which is supposed to show how greedy and selfish Romney is. But part of the reason that his taxes were so low is that he gave away so much of his income. If you combine taxes and charitable giving the Romneys gave away over half their income to others. Of course, in the eyes of the Mandarinate (our governing class, that is) the 30% given to charity doesn't count. It is only charity if the governing class gets to decide how the money is spent. 

Apology?

I frankly don't care much for these demands for apologies that are continually being batted about in political discourse, but there does seem to be one due Governor Romney for the three days of infamy to which he was subjected over his criticism of the Cairo Embassy's tweets the night of September 11.

You will recall that just before midnight on that same night, Romney called these apologies, issued by our embassy in Cario both before and after the protests and attacks sparked by the now infamous youtube clips, outrageous. (A good summary of the facts can be found here) Subsequently, an attack on the Libyan consulate in Benghazi was launched, killing our ambassador and three other Americans (the only three Americans) who were guarding him. As it appeared that the Benghazi attacks were part of the same wave of protests that had begun in Cairo, Egypt, Romney was then criticized for attacking the administration in the midst of a crisis and making political hay out of a tragedy. He was, it was said, being an opportunist.

Later the next day the Administration distanced itself from the Embassy's tweets, to some degree at least vindicating Romney's earlier criticism of the same. But given the chance to say that he would not have made the criticism had he known of the Benghazi attacks Romney doubled down, saying that his criticisms of the Cario Embassy's 'appeasement' was still valid. Romney's comments and his refusal to withdraw them was the main political focus of the media for the next few days. The consensus was that Romney had hurt himself by trying to exploit a national tragedy before all the facts were in and had shown himself to be a political opportunist.

However, it now seems that Romney was right. The two events were separate, the Benghazi attack having been 1) a coordinated and planned attack in retaliation for the US drone attacks on al Qaeda commanders in the Somali and Pakistan, and 2) launched by an al Qaeda affiliated group in Libya. If the Benghazi attack was, as the administration after almost two weeks of denying it now admits, unrelated to the Cairo protests against the YouTube video there is no reason that Romney should be restrained in his criticism of the Embassy's tweets. It will indeed strike many Americans as outrageous that a mob should attack the sovereign territory of the United States, burning our flag and hoisting in its place a black flag reminiscent of al Qaeda's banner, and that the first reaction of our nation's representatives in that country should be not to express outrage, but to apologize that one of our citizens may have offended them.

But even more serious questions are raised by the Administration's efforts to pass the whole incident off as being a reaction to a YouTube video that got out of hand. Since it has become clear that the attacks were planned terrorist assaults the administration has explained their repeated assertions that the cartoons were to blame as being the result of relying on early, inaccurate reports. The Administration claims to have been mislead by reports from the State Department and the intelligence community. However, both the Career officials at the State Department and the career intelligence officers involved have broken with the administration, claiming that they knew either from the beginning or at the latest within 24 hours that the Benghazi attacks were terrorism and were unrelated to the YouTube videos. These denials have come not just in the form of press leaks but in sworn testimony before televised Congressional hearings.

Though the administration has finally owned that the attacks were terrorism it still insists that they were misled, most recently restating that position through the Vice President during the Vice Presidential Debates. The combination of such high profile back-pedaling on a story and finger pointing has made the story one that can no longer be ignored by the press--usually so serviceable to the Obama administration. Very serious questions are raised.

There are first, what would appear to be simple management questions. Why were the requests for more security and the concerns of the Ambassador and his staff--made so painfully public in their own writings recovered from the site of their murders--refused? There is also the simple question of public integrity: why would the administration say something that they knew to be untrue?

But there is a larger question that the whole incident raises about the Obama administration's foreign policy. The Obama administration premised their foreign policy reset on the notion that President Obama would, by presenting a kinder and more understanding face to the Muslim world and ending or at least winding down our wars in Iraq and Afghanistan, make us more liked there and, thus, more secure. The administration's focus on destroying al Qaeda through drone strikes free of the distractions of neo-con nation building, democracy spreading fantasies would destroy the terrorists and, thus, keep us safer. It does not appear to have worked out that way.

It is bad enough that our embassies across the Middle East are in flames on the anniversary of al Qaeda's attacks on the World Trade Center, and that the US is less well-liked in the Muslim world than when Obama took office. One could maintain that it was a minor set back, that is takes time for perceptions to change. But what about the Benghazi attack?

The Benghazi terrorist attack shows that fighting from off-shore with unmanned drones is not enough to defeat al Qaeda. It is a real blow to the Obama administration's narrative of itself and its policies. That is why the administration kept with the YouTube-did-it story. Because the resurgence of al Qaeda in many of the very places where we assisted in bringing down a dictator is a direct challenge to the entire foreign policy of the administration.

It is not just that the administration was poor at managing by not giving enough security to the Benghazi mission, it was that they were deluded by their own ideology. They thought that the presence of American security personell would be aggravating to the Libyans. They thought of US military personell as part of the problem. Much like the generals in the early part of the Iraq war thought that minimizing the visibility of our soldiers was key to gaining the trust and not exciting the hatred of the Iraqis, the administration here thought that the fewer soldiers and security personell that were visible the safer the mission would be. They pushed the YouTube story because is was the only one that saved their foreign policy from blame. The story made the attack something beyond their control, something that they could not have anticipated, something unrelated to the warnings they had received repeatedly about the danger of al Qaeda and other radical groups taking over territory and launching attacks against us in Libya.

And what of the charge of political opportunism? If Romney calling out a bad embassy tweet is opportunism in the middle of the night and not retracting his criticism after the death of an ambassador, what are we to say of an entire administration, from the Secretary of State, to our Ambassador to the UN to the President himself telling the United Nations General Assembly that of his personal friend, Ambassador Chris Sullivan, was due to protests against a YouTube video? How is that for using tragedy for political gain? How is that for political opportunism.

It is not just Mitt Romney, or even our country, that is owed an apology. It is the family of Chris Sullivan and the three other Americans who died trying to protect his life. 

Here is a post from Megan McArdle about the IPAB. In the piece, she explains why the administration's argument that the board will not ration services does not make economic sense. The board will determine what the government will agree to pay for certain services. If the board says it will not pay for service the administration argues that the services and being rationed, is simply "cutting payments to providers." But to imagine that providers will go on providing the same service while getting paid less is hard to believe. Indeed, if the board is going to create serious cost savings, it will have to stop providing payment for certain services altogether. To say that your doctors breach provided test or treatment as long as he doesn't desire to be paid for is surely tantamount to saying that the treatment will no longer be provided. And that is surely why the board does not go into effect until after the election.

It reminds me of a shark, the president made during the first debate. He set of Romney's plan to pay for lowering the rates by cutting loopholes that it was a bit of a swindle. Romney is telling you about the good news and not telling you the bad news. He asked – and I'm paraphrasing here – why doesn't he tell you the details? Why are they keeping all the stuff secretive so wonderful?

We might say the same thing about Obama. Why do so many of the provisions of his healthcare not kick in until after the election? Is it because these provisions are so wonderful? IF THE INDEPENDENT PAYMENT ADVISORY BOARD is so wonderful why not put into effect before the election?

From Megan McArdle's analysis of the vice president debates:

"People will be much more scared of us than they are of you" might have worked in 2004.  But by 2012, I think the electorate is pretty tired of the "peace through strength" approach.' 

Unfortunately, what the electorate is in the mood for and what the world requires are not always the same thing.

The American Welfare State

If you are not on the suck you are a sucker!

Dubai Airport

My posts will be out of chronological order because of my internet access.

They just announced my flight for Kabul is boarding. I am in the Dubai Airport, Terminal I, where it is always $9 beer night! Alas, where I am going a beer could cost you much more than that. It is amazing, though, how quickly you don't miss alcohol.

I'll post some photos of the the terminal. It is an amazing place. Dubai happens to be placed so that by transferring here you can get to every major population center in the world with one transfer. The catch is the flights are so long that the transfer will usually be in the middle of the night. It is 2:30 AM and the place is busier than it was in morning when I arrived. It is also the best way to get from Asia and Africa to the Western world and one of the only free trade zones in the third world so just sitting and watching people go by is like seeing a random sample of all the people on the planet go by every 15 minutes.

Back to Afghanistan!

I am going back to Afghanistan for the fourth wave of our survey. I will try to update everyday but my internet access is a bit spotty at times.

The trip this time was arranged on the fly as visa problems kept me from buying my ticket till the last minute. Once the flight started we were delayed leaving Atlanta for four hours which necessitated a re-routing of the whole flight through Paris and on to Emirates Airline, which, I am both happy and relieved to report, does offer alcohol on its international flights.

I got to see the Paris Airport for a second time. Coming all the way to Paris and only seeing the airport is a tad depressing. However, it did remind me how beautiful the facility is. Also, nothing blew up this time; last trip a bomb was found that the authorities had to detonate in the airport.

The airport is really beautiful, even though it is all done in a ultra modern style that I don't usually like. There are no parts that are not meant to be aesthetically pleasing. Even the back stairways are meant to be pleasing to the eye.

This trip I scheduled 2 nights in Dubai before the final leg of the trip to Afghanistan. This turns out to have been a good move given the delay I encountered on the Jackson-Dubai part of the trip. I have slept for 10 hours in my hotel room.

It proved impossible to arrange transport from the airport to the Hotel from the Hotwire website. As it turned out the taxi (or, rather, the guy that has a car and speaks English) that I found was cheaper than the rate the Hotel was going to charge me anyway.

I would like post some photos but I can't get them from the iPhone to the Blogspot website. I was so clever to buy Apple, the brand famous for its ability to get apps to work together, as long as none of those apps were foolish enough to be designed or sold by someone other than APPLE!!!!!

Thanks, Steve!

Symbolism

Here is a quote from the L.A. Times:

That said, the violence — in which more Afghans than Americans have been killed — is an ominous reminder of the fragility of the relationship between the United States and its allies on the one hand, and an Afghan populace wearied by a decade of Western occupation on the other. Especially shocking was the execution-style murder of two U.S. service members assigned to the supposedly secure precincts of the Interior Ministry. The gunman, who is still at large, is suspected of being an Afghan police intelligence officer. Afterward, U.S. commanders withdrew Western military advisors from various Afghan ministries as a precaution. The symbolism was stark: Americans couldn't trust their Afghan allies.

I agree the symbolism is stark: succeed in getting one spy in and our entire team of advisors can be run off. Our readiness to attribute the actions of a handful of fanatics to the entire Afghan people mirrors the willingness of so many Afghans to attribute the actions of one deranged man to the entire American people. We are allowing terrorist with the support of a small fraction of the population to defeat us. It is a tragedy for Afghanistan and an ominous precedent for our foreign policy and alliances in an age of terror. 

It is always capitalism and America

I am watching a movie called the whistle blower. It is about the UN Mission in Bosnia and shows how the UN employees used controlled the human trafficking rings. The amazing thing is that mainly through casting they make it seem like the problem is the Americans. None of the peace-keepers are Americans, all the really bad guys with guns are Americans. Even though the ultimate villain was the US, even though it was a UN operation. Somehow all the really bad guys have to have American accents. Can't be a problem with the UN, it has to be a problem with the UN and private contractors corrupting the UN. Still, it is something.

At the end of the movie, which is a true story, it says that many of the guilty parties were sent home to be prosecuted by their home governments and that the US state department continues to do business with private contractors like the one depicted in the movie. Now this is nice. The "home countries" are never mentioned by name. The implication is that their countries are Western and probably America but, as I recall, in fact most of the contractors came from non-Western countries.  And they imply that the problem is the private contractor company. They never show that the company is making money on this or that the UN bureaucracy is trying to clean things up. It is all shoe horned into the narrative of America-->private contractors-->trafficking. The UN is the victim. All the really idealistic people are UN professionals. The bad guys are military (always US) and the Americans who work for private contractors. There is never any suggestion that the people who work for private contractors in UN operations are most often not Americans but are from non-Western countries. They manage to make a UN scandal into an indictment of America.

Idiots of a Feather

I am listening to Lou Dobbs talk to Bill O'Reilly about the evils of oil speculation. This is truly painful.

Dobbs points out that the supply is greater than demand right now so that it must be the fault of oil speculators. Morons!

If you had something that you knew was 6 months from now going to be worth twice as much as it is now would you sell it for the price it is going for now or would you hold on to it for six months and sell it then? Of course you would wait. And if someone wanted to buy it now how much more would they have to pay for it to get you to part with it now instead of waiting till the price went up? Probably something close to the price you expect it to be six months from now.

That is how the futures market drives up prices in the present. Because people are not idiots, unlike O'Reilly and Dobbs.

My friend has a curious ritual in the mornings. I have to put things in my pockets. He has to take things out of his pockets. He takes everything out of his pockets that comes from the 20th century. He is in particular careful that he has no pieces of paper on them with writing on them. He is an official in Afghanistan. His way home includes roads that have Taliban roadblocks at random points. They stop all cars and search all occupants. If any piece of paper is found that has writing on it the person is taken away and decapitated.

"The Taliban can't read so they assume anything that has writing on it is proof that you work for the government."

I have heard this story from many people. In my five years of traveling to Afghanistan to study the attitudes and values of university students and professors there I have heard versions of this story in many variants. One student witnessed a man being taken away by the Taliban for having a bank card. Another for having a piece of paper which advertised the opening of a grocery store. The words civilized and barbaric are liable to be applied with too much ease. They are liable to be dismissed as terms of propaganda, the sort of words that are so loaded that one scarcely credits them. But here we have a set of facts to which they can be justly applied. Indeed, from throwing acid in girls faces for the crime of learning to read to murdering school teachers the word 'barbarism', in its original sense opposition to reading, settling differences amicably and the rule of law and living in a fixed abode, in short, civilization, is the only word that captures the issue of contention in this conflict.

We are now negotiating peace with the leaders of the Taliban. This is called progress. It is if you are a man and have no interest in say, reading books or being able to shave or wear blue jeans or make any of the thousands of decisions great and small that we take for granted as being the birthright of a free human being.

There is a groaning feeling among Americans of all political persuasions that this sort of backwards, medieval fanaticism is representative of the Afghan people. All that Americans see of Afghans are the relatively small but extremely violent crowds that mount attacks against outside our airforce base or against Afghan police and that our press insists on calling “protestors”. Once you throw a grenade surely you are no longer a group of protestors but insurgents using our tolerance and felt obligation to respect freedom of assembly to provide cover.

And so the fact that the Taliban are proving hard to finally defeat because they are supported by the people of Afghanistan. Such an opinion is quite unfounded. In the five years I have been traveling to study the opinions of university students there is no group that is rated lower in esteem than the Taliban save one: al Qaeda. This is not an artifact of the fact that I am studying an uncharacteristic and relatively privileged population (if you can call studying in a university that often lacks electricity and where you must hide your school books and destroy anything you have written if you travel outside the security perimeter of the capital city privilege). In fact, all of the survey data we have shows the the Taliban is deeply unpopular and that the ISAF war against them is widely popular. The complaint that Afghans  whom I have talked to is that we are not dealing roughly enough with the Taliban.

The thing that I have heard most often over the five years I have been traveling to Afghanistan and talking to university students at all universities is that the Americans are pretending to not be able to defeat the Taliban. To the extent I have encountered anger it is at what they perceive as the reluctance we have shown in killing the Taliban. When in am there I constantly hear stories about the Americans or ISAF letting the Taliban go, failing to pursue or even actively supporting the Taliban. On closer inspection these stories are seen to an American to be instances of our legal strictures and applying rules like innocent until proven guilty or not taking risks unless you are absolutely sure or arresting people instead of killing them.

But these legalist rules often make little sense to the Afghans. For the US and its allies the fact that the war has changed from being a war against a foreign enemy and the Taliban being members of a foreign army to being a civil war or internal conflict and the Taliban being citizens accused of crimes and having due process rights. The fact that the Taliban were fighting in uniforms meant they could be killed on sight. The fact that they are now often dressed as civilians means that they often have to be allowed to walk away. This makes sense in terms of international law but it means little to Afghans. They see us destroying the the Taliban wholesale in 2001 when they are 60,000 and we are a few hundred and being bogged down and talking about negotiating when they are perhaps 30,000 and we are 120,000. When bin Laden was killed and many Americans were fretting about the lack of a trial the Afghans were fretting and complaining as well, but to the opposite point. One friend said to me, “If you can kill bin Laden so simply why can’t you take the same sort of decisive action here?”

Once we called the Taliban enemies of humanity and America. We have decided that we would rather not be there so Now we call them partners for peace. Perhaps the Afghan war is un-winnable, at least under the  constraints we have set ourselves. But let us not say that the problem is the Afghans don’t want us and their democratically elected government to win. It is we who are undecided.

Apple One to One service

This blog post brought to you by: Chris from the Apple store.

In all seriousness the Apple One to One service is one of the best investments I have ever made. It is like having a bunch of computer geek friends who never get tired of helping you. 

In Praise of Vultures

In praise of vultures.

There has been a great deal of criticism of Mitt Romney because the firm where he made his millions apparently closed down some firms. This is viewed as morally questionable and at the very least supposedly goes against his claim that he is a job creator. Romney has responded by saying that sometimes bad things happen and pointing to all the companies that expanded employment under his guidance or the guidance of his firm. But this is the wrong defense. He should be proud of all the jobs he eliminated. Vultures are more important to capitalism than breeders.

People have got it all wrong. The great virtue of capitalism is not that it allows people to invest and create new firms. That is the easy part. Getting rid of jobs is where the other systems fall down. Any fool can create jobs, it is getting rid of them that is tricky.

The reason that capitalism creates wealth is that all available resources are used in the most efficient way possible. Each factor of production--whether physical or human--is employed in the way that creates the most possible value.

This very often involves getting rid of firms. The whole reason that a vulture capitalist can make money by breaking up a company and selling off its parts is that the the product of the company is worth less than the factors of production the company is employing to produce the product. Vultures only attack the dead. If a vulture buys a company that is not worth less than the sum of its parts, after all, it is the vulture capitalist that loses money.

Try being a vulture capitalist with a good company. Want to break up Micro-soft or Apple? Go ahead. You have some buildings and a lot of people that can walk into some better jobs elsewhere. The reason that GM is a bad investment is that the pieces of the company are almost surely worth more than the company as is.

There is something immoral about beating employees out of their pension benefits, but the employees themselves are not always blameless. Part of the reason that GM and Chrysler are so unprofitable is that they spend far more on employee retirement benefits than they do on employees, i.e., the people that actually make something. That is part of the reason why the Obama administration stepped to stop the normal course of bankruptcy: the pension and health care schemes would never have survived a court ordered bankruptcy and the Obama administration was determined to protect its political allies in the auto unions. Now the public is saddled with unprofitable enterprises that tie up billions in capital that could be going to supporting profitable business. A vulture would have sold the pieces of the company that made sense to someone that would have put those resources to better, more profitable, use.

The vultures didn’t fire those people that worked at unprofitable companies, their customers did. Vultures don’t kill companies, customers do. By their willingness to pay more for products from another use of the carcass company’s assets they are telling the world that the company in its existing form is not the most efficient use of these resources, that more wealth could be created by breaking the company up. The ‘vulture’ is just the messenger.

Of course this is no fun for the people that get fired. Which brings us to the other great sin supposedly committed by Romney, saying that he “enjoy[s] firing people.” Of course, what he was referring to is not the actual act of telling people they no longer have a job. He was not literally talking about firing people at all, but being able to tell ‘people’--meaning a a company that produces a good or service that he doesn’t like--that he is ‘firing’ them by taking his money elsewhere.

And so he should. Who doesn’t? Just as who doesn’t hate not being able to fire the provider of an inferior good or service? Who has never felt the frustration that comes with dealing with an incompetent government employee and realizing that there is nothing you can do? The only way that goods and services get better is the constant threat of being “fired” by your customers. I like being able to fire people and make no apologies for it. The vultures of this world do us a great service and are the reason for our prosperity. We could use a few in government.