Mittwoch, November 30, 2005

And They Wonder Why No One Trusts Them...

Ever wonder why the EU Constitution was really rejected? Why there were those who were so steadfastly against it?

On the face of it, European unity sounds great. After the two great wars, enough of squabbling that leads to enmity that leads to antagonism that leads to conflict that leads to war.

So what went wrong?

Well, there is this.

After 11 years, the EU may actually have a budget that normal people can understand and actually make sense of.

Right now, vast monies are off-budget and are controlled by bureaucratic whim. The new nobility - the EU bureaucrats - has a grand total of €105 bn to play with.

Of that €105bn, €43.6bn goes for CAP, the Common Agricultural Policy. Of that, 37% cannot currently be audited. In other words, no one really knows what is going on with over €16bn.

No one.

And for the structural measures, i.e. subsidies for structural change, let me quote the report:

...a high incidence of errors of legality and regularity was detected in the Member States' declarations leading to payments by the Commission.

This on €34.2bn...

And this, again quoting directly:

In the case of internal policies (€7.3 billion euro), despite progress made in certain areas, the Court found weaknesses in supervisory and control systems and a material incidence of error in underlying transactions at beneficiary level. It is likely that the risk of errors will persist unless the legal framework is changed so as to simplify cost reimbursement systems and clarify the procedures and instructions governing the different programmes.

In terms of external actions (€4.6 billion euro), the improvements in the Commission's supervisory and control systems have not yet had an impact at implementing organisation level - NGOs, recipient government , international organisations - where a relatively high incidence of errors at the level of payments was detected. This was linked to poor internal controls in these organisations, and underlines the necessity for the Commission to have a comprehensive approach to their supervision, control and audit.

In other words, of around €105bn, ca €80bn is being spent without controls and without supervision.

Which means that the real problem with the EU is institutionalized corruption.
Duh. After all, the EU Commission has already seen one round of mass resignation because of corruption.

That is what is going wrong with the EU: it's not a political question, but more fundamentally a moral one. The politicians who campaigned AGAINST the EU Constitution are probably the last few non-corrupt politicians around. While I'm willing to stipulate that not all politicians are corrupt, directly taking bribes etc., I am also willing to stipulate that the EU, as it currently is organized, acquiesces to institutionalized political corruption for whatever reasons.

What I repeatedly find amazing is that there are no politicians out there who see how they can use this to gain power and political momentum: even worse, there is no popular backlash against corrupt parties and politics.

I guess that's the American in me, expecting that a populace who bears a heavy tax burden would insist on accountability from their politicians.

From what I can see, however, this institutionalized political corruption is so deep and so widespread that no one with a stake in political and economic development can even think of the repercussions from actually making this open and obvious, since it would mean the collapse of western European poltical culture as we know it. The press isn't interested, no political party is interested (they both live off subsidies and corruption), and the populace is numb.

And that is why the EU Constitution failed: there was too little transparency, no promise of actually improving anything, and people, rightfully, saw it as nothing less than a power grab by bureaucrats to make their position unassailable and permanent.

It's tragic: there is so much human potential being fundamentally wasted in the EU. Why go through the effort of higher education and work like crazy to set up your own business or get that great career when it's a lot easier to play along within a corrupt system and live off the fat of the land?

European political culture is thus severely undermined when politics and commerce combine to further each other's aims at the cost of everyone else.

But no one seems to care. And that is the real tragedy of Europe: not the wars of the 20th century, not the demographic problems, not the economic problems. But rather that the body politic is so corrupt and incapable of change that it will require tragedy before anything can change.

A Culture of Deception...

This is a great post by someone who really knows what he is talking about. Edward Jay Epstein is incredibly knowledgeable about how Hollywood really works, down to the secrets of Cheap German Money and its demise.

He refers to the Culture of Deception of Hollywood. Let me step back a moment and lay this out a bit different than Epstein does.

First of all, all movies require suspension of disbelief. What we see up there on the silver screen is a carefully orchestrated illusion, designed ultimately to do one thing and one thing only: to separate you from your money. There's no greater reward for Hollywood people than for people to pay and pay and pay to see the product, and a really good film, let alone a film franchise like Star Wars or Batman, can finance literally hundreds of careers.

All living off the production of illusion.

Now, as Epstein points out brilliantly, Hollywood marketing doesn't simply limit itself to pushing a film. Rather, Hollywood has to create and continue memes of belief that help it sell films. Epstein reports how, for instance, Hollywood pushes the idea of Area 51 and the belief that the government has aliens it is studying in order to sell movies and TV series: Stargate, which I dearly love to watch, is one of the products of this meme. A few seasons ago they simply started talking about Area 51, and they didn't need to explain what they meant. Not one word, which means that this meme is firmly emplaced in the American, if not the World's, psyche as a fixed idea: the government is lying to us about this.

In other words, Hollywood has a vested interest in certain ideas being a fixed part of at least the American experience: a) the Government is controlled by interests that we don't know about and who do not have our interests at heart; b) you can't trust the government; c) the government is willing to do evil.

Of course, the real problem is that while you can certainly make the case that people in the US know better than to believe Hollywood, since they experience local government as not corrupt and local politicians as people who are out there trying to do a good job, as well as the massive holes in logic and reality that most Hollywood films show that requires a suspension of disbelief in order to remain believable, this isn't necessarily the case for foreigners watching the films.

A suspension of disbelief means that you as spectator know full well that Godzilla can't move the way he does because in reality, he'd need legs five times the size that he has just to stand, let alone move. It means that you accept that a general declares martial law and suspends habeaus corpus, even though you know that he'd be relieved of duty within a few minutes and that no officer would execute his orders, knowing that they are unlawful. It means that you accept soldiers behaving like automatons, carrying obviously illegal orders out, although you know that US soldiers are highly trained to act on their own and to question and refuse unlawful orders.

But someone in Germany or Austria might well not know that. No, let me put it more bluntly: someone in Tunisia won't know that. He or she isn't watching the movie with the suspension of disbelief, but rather as reality.

And this is where the problems really begin.

Hollywood, with its culture of deception, isn't merely entertaining us: it is also telling a story overseas that is decieving audiences overseas as to the nature of reality. It is the culture of deception that is helping to create problems, since you get people reacting and acting not to the reality of a situation, but rather their perception of the situation.

More on this when I come up for air from the latest forecasting round...

Dienstag, November 29, 2005

Not Really Surprising...

This doesn't really surprise me much.

Europeans have been infamous in the past for playing games with import regulations. There was a time when each and every videorecorder imported into France was unpacked, plugged in and then a series of tests were run on it; this all in a small customs office in the middle of France.

The goal is generally to stop imports from coming in without making it really obvious that artificial constraints are being set up. From what I can gather, this is aimed directly at the independent auto importer, invariably someone who imports US cars for auto freaks looking for that special car that simply isn't available via official import channels.

But why US cars in this manner?

It probably boils down to a bureaucrat who has decided that he is going to close what few loopholes are left in import laws (some of these include not paying duty on goods when you move to Europe, as they are used household goods, as well as special import waivers for vintage cars and the like that cannot meet modern safety regulations, but are imported on the basis of their collectability and not directly on their basis of usability as a daily means of transportation.

And re-reading the story, it has to do with the cars imported not meeting "European culture" standards. Oh, and I see now who is behind it: Renaat Landuyt, the Belgian Minister of Mobility.

The Minister of Mobility? Ok, Minister of Mobility and Transport. Still: having a Minister of Mobility in a country that is suffering from a total lack of political mobility is nothing less than...ironic. See this for what happens to people who dare to question the status quo and who dare to be sceptical. Play the game or be banned for life.

This is what the guy looks like. Here is where you can get in touch with him.

And this tells you all you need to know about him: his interest in politics was "awakened" on 11 Sep 1973 when he saw the picture of Allende with a weapon in his hand refusing to surrender.

I wonder if he knows that Allende was in the pay of the KGB at the time and had been for some while?

And looking back once again, it's obvious. We have a political decision that is indefensible if it were to come up under the GATT: a minister deciding, arbitrarily, that a particular kind of car isn't appropriate for his country and simply stopping their imports by putting up all sorts of red tape.

Ignoring international trade agreements. Ignoring consumer demand. Ignoring free trade principles.

But the Europeans are soooo much more enlightened than Americans, you know. Who cares what the people want! We know better. And we don't need to go through any sort of law-making procedure (that get nasty when someone reads them...), and we don't need to get the courts involved either. We, the royal We of European Socialism, simply decide that it is so, and it is so.

I think Belgian chocolate is about the best in the world. But that's the last time I eat Belgian chocolate until this changes.

Montag, November 28, 2005

A Modest Proposal

Germany, as we all know, is in the doldrums and has been for the last several years.

A modest proposal, based on this.

Germany's problem is the tax burden: the real return on investments is, after taxes, too small. This is not only true for companies, but for private households as well. If I get taxed at the highest marginal rate, any significant increase in my pay is eaten largely up by taxes, reducing my marginal inclination to invest more time and energy to move ahead in a job or with a company. After reaching a certain level of income, the returns on further investment of time are too small for them to be worthwhile, since leisure time, always at a premium, can't be banked for future periods.

Germany recently gave up an excellent macroeconomic tool: the investment tax credit, since recent code had been so poorly written that instead of German investors getting a tax break by investing in German films, they got a tax break by investing in films anywhere. Instead of getting a tax write-off for ships built in Germany, they got one for ships built anywhere. Given the high cost of manufacturing in Germany, there wasn't much surprise when people realized they could just as easily invest in ships built in China as those made in Germany and get quite a better return on their investment as a result. At the end of the day, the investment tax credit ended up making things worse rather than better, since fund initiators provided relatively elegant and simple investment tools for an investor looking for an easy way to get some tax relief fast.

So investment tax credits were virtually eliminated and in at least one case led to the bankruptcy of closed fund initiators who didn't think that the law would change so drastically and were caught overextended and underfunded.

So here is the modest proposal: reinstate the investment tax credit and have a government team of economists make the decision where these indirect subsidies should go. Not to support aging and dying industries, but rather to open up new ones: how about an investment tax credit for Nanotechnology funds where an investor gets to write off 150% of his investment in the first year for any sum over €25 0000? The subsidy for €25 000 invested would be, at the top marginal rate, something like €15 000, which at first sounds like a lousy deal for the government. But limit these investments to closed funds, where the capital is not fungible for at least 10 years, ensuring that an investor can't yank his money out quickly, and the net effect should be positive, based on income tax from new jobs, corporate tax from new companies and tax income on dividends paid over time. Make it a requirement to have a clear and clean entry and exit for an average investor, and you've created an investment instrument that allows the government to decide which areas it wants private investors to finance, rather than direct government money.

Make this council of economists permanent with 11 members, 1 of whom makes the decision at the end of the day, with a rotating membership of 3 years, with 3 government economists, 3 private industry economists, 3 institutional economists and 2 foreign, non German-born economists. Investment recommendation by majority only, with a "White Book of Industrial Development" published every three years that covers a) success stories and why and b) failure and why. The chairman, who makes the decisions at the end of the day, may not be a government economist. The only allowable investment instrument is closed funds, 10 years with clear entry and exit procedures (i.e. at the end of 10 years, investors know how much they should be getting back, ceteris paribus), and no secondary markets. Investment tax credit of between 100% and no upper limit in the first year, providing investors with a massive incentive to invest. But at the same time these funds are limited to the areas chosen and there must be an approved business plan for the fund that shows a real return on capital over time, at the very latest 10 years. No black box here, but rather business plans that fit into a standardized template for comparability. Limit funds to total subscription of no more than €1000 mn, minimum of €10 000 entry, no single investor with more than 30% of total funds equity.

And eliminate all other subsidies. If companies want to gain access to this kind of long-term risk capital, then they have to enter into competition with new technologies and new ideas in order to get access too this kind of money.

Freitag, November 25, 2005

Is It Something In The Water????

I came across this today.

Is there something in the water in Canada?

Or do they all watch Stargate and think it's reality? That that is where McGyver ended up? After all, they talk about Area 51 on that show as well...

On the other hand, the guy was defense minister under Trudeau, and that, I think, pretty much explains it all.

If he keeps it up, he will probably be made an honorary member of the Democratic Party, Moonbat division, and will be rejuvenated as a reward for his efforts when the aliens land.

Seriously: this is also what happens when people are willing to believe anything because they don't really believe in anything.

And another victory, as it were, for sophistry...

Donnerstag, November 24, 2005

And Yet Another Perception Into Perceptions...

See what I mean by the perceptions abroad being critical?

This bit over at PowerLine is exactly on the money, but they need to follow on through.

This is the key quote:

Our enemies gambled that the American people are soft and are not fully committed to the war against terror. They thought that the American people don't have the patience or the understanding of the stakes involved required to take casualties, especially over a prolonged period of time. They believed that if they simply remained active in Iraq, even at a low level, domestic American politics would, before long, swing against the war.

What if their perception wasn't the result of wishful thinking on their part, but rather was clearly supported by the sort of hysterical squabbling that we've seen over the last several years? I can well imagine someone like Saddam Hussein thinking "They'll never invade when a million people march against the idea and the polls are against them: after all, all the President of the US does is to watch polls."

In other words, by deliberate fostering of the appearance of massive dissent (when in reality it's not really serious dissent, but rather was rather ineffectual and in many cases not very serious), the anti-war people emboldened dictators abroad in taking a hard line position that led to war instead of helping to defuse the situation.

To be fair, the above link finishes the quoted paragraph with:

The awful possibility, which seems more likely with every passing day, is that the terrorists correctly judged the American people.

I'd re-word that.

The awful possibility, which seems more likely with every passing day, is that the terrorists correctly judged what the left wanted them to think about the American people. The problem is that the Left was the party of appeasement and apology, and knew not the American people.Thus the collapse of the Democratic party in the elections of 2006 and 2008.

I think that is the more likely outcome.

The Problem with Chavez...

Yesterday's post points out how problematic private diplomacy can be.

Today's link points out why being buddies with Chavez is not really a very good idea.

He's financing revolution in Ecuador, Bolivia, Peru, Chile, Argentina, Dominican Republic and Columbia. He's Castro with money and more years to live, spreading chaos and destruction in the name of justice and social equality, achieving neither and ultimately enriching himself at the cost of millions of people who will die if his ideas become reality. After all, his favorite politcian, after Castro, is Mao.

History repeating itself is farce. But this is farce of the blackest kind, since things are not going to get better for people who believe in his Bolivarist nonsense, but will get much, much worse.

And regarding yesterday's second post: why should the poor and impoverished masses in Venezuala - and indeed they remain so, despite oil wealth, which increasingly disappears into Chavez' pocket - subsidize US home owners living a life of comparative luxury?

But since when did something like that matter to a Kennedy...

Mittwoch, November 23, 2005

And the fun begins...

In the last post I pointed out how Democrats are trying to do an end-run around the US government in dealing with the rest of the world.

In perusing the world, I ran across this and this.

This is exactly what I am talking about.

Chavez is a crypto-communist/neo-fascist thug who has suborned the democratic process in Venezuala in order to gain wealth and pursue his own agenda of political aggrandization and who wants to make things worse in his corner of the world in order to gain power. He vilifies the US and works closely with those who actively work against US interests in the region, and makes no secret of his desire to exert his influence in most of South America.

So who cooperates with him in order to further their own, domestic agenda?

Joseph P. Kennedy II. Democrat
William Delahunt, Democrat
Jose Serrano, Democrat

This is nothing less than political grandstanding, undermining US diplomacy.

And it sets terrible precedence. Not happy with US policy? Go out there and make your own.

No matter if it hurts the interests of the US, as long as it serves your own interests. Who cares about the long-term effects if you can use short-term benefits for your own personal political utility?

This is getting closer and closer to treason than I have ever seen before. There are laws against this.

Specifically the Logan Act, embodied in US Law under the Federal Rules of Criminal Procdure, Title 18, Part I, Chapter 45, paragraph 953:

Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.

This section shall not abridge the right of a citizen to apply, himself or his agent, to any foreign government or the agents thereof for redress of any injury which he may have sustained from such government or any of its agents or subjects.

The key word here: any correspondence or intercourse with any foreign government ... to defeat the measures of the United States

This means that if you, as a private person, get in touch with a foreign government to try to subvert any sort of US government policy, you are breaking the law. If you get the OK of the US government to do so, then you are not.

Simple, plain, and yet neither Kennedy, Delahunt or Serrano will probably ever be charged with violating the Logan Act.

Why? Because the Logan Act has never been used, for one, although it is the law of the land, and second, no sitting Congressman can be charged with the Logan Act, since it is indeed the right of Congresscritters to have contacts with foreign governments without having to get State Department approval.

But the above links don't show talking: Kennedy, Delahunt and Serrano are actively involved not in talks, but in aiding a foreign government to suborn the policies of the United States.

And that is new.

Some might say: so what? What's the point?

The point is that by allowing private diplomacy of this kind, it encourages other countries to suborn US policy. By thinking they are able to do so, such countries will make serious mistakes in their own policy (convinced, for instance, that "their" people in the US will prevent the US government to act) that may well lead to war.

By accepting subsidized heating oil, Kennedy, Delahunt and Serrano will gain short-term political advantage in their districts. But by doing so in the manner that they have, they will have made the likelihood that Chavez and his people will make the wrong decisions more likely, worsening the political environment in South America.

And by doing so, if this worsening results in violence (either via war, terrorism or externally instigated revolutions), then Kennedy, Delahunt and Serrano will have sacrificed long-term US interestes in political stability and peaceful change for bloody violence in order to get nice polling numbers.

Postscript, added later the same day:

Delahunt has been at this for a while, since 2002:

...he inaugurated a series of unofficial talks aimed at ending the acrimony between the Venezuelan government and the political opposition.

The idea, Delahunt said, was to get conflicting parties into a private, secluded place where they would talk to one another personally and participate in recreational activities together.

The group, which called itself ''Grupo de Boston," met in 2002 and 2003 on Cape Cod. Participants often engaged in heated political talks in the mornings (one session needed an intervention to stop a fistfight).

They also went whale-watching and played intramural baseball in the afternoons, with mixed teams and a bipartisan group of legislators as umpires.

Bottles of Scotch were in the guest rooms, and all had been consumed by the end of the session, a Delahunt spokesman said.

The Grupo de Boston members continue to meet informally in Venezuela, and Álvarez said the initiative has eased tensions.

The issue is a tad clouded because Citgo, providing the oil, is of course a US company, but wholely owned by the Venezualan government; however, the deal was worked out directly by Delahunt, who is now apparently running his own private diplomatic missions without the sanction of the State Department. And acting as an apologist for Chavez and Castro.

Blinders, or How Domestic Squabbles Are Read Abroad...

Haven't been posting much lately due to the fact I'm in the middle of an extended forecasting round for the fourth quarter...and it's a hard forecasting round because of major European economic problems that aren't so much showing up on the usage side of the economy (i.e. consumption and the like), but definitely are becoming apparent on the supply side (i.e. who is adding value to the economic process). I'll make a long story short: things in Europe are much, much worse than anyone in the US really understands. And the converse, of course, is that the US economy, for all its warts and wrinkles, is doing pretty damn good. But enough of that.

This link should tell you everything, if you can understand what is being said. And what is being said is critical: it's the Mayor of Tokyo who is failing to understand what has really been said and is drawing very wrong conclusions that are probably widespread, not so much in Japan but China and elsewhere. He's outspoken and brash in many ways, but he has a multiplier effect above and beyond the Japanese borders. There are a couple of themes going on here before considering an analysis:

First: there is a major asymmetry in infomation between the US and the rest of the world (ROW). Even the more enlightened and internationally oriented folks in the US tend to completely and totally ignore the fact that there are plenty of people overseas who try to follow what goes on in the US with as much interest as they would events in their own country, if not more.

Think of that: when Congress and the President squabble in public, you've got an unprecedented number of people listening who 1) don't understand exactly what is being sqabbled about; 2) don't understand how the US government works; 3) in trying to understand apply local logic and compare with local developments and 4) do this in a foreign language.

That last point shouldn't be ignored: I work day in day out in German, not in English, and even then it's not that easy. When I see my colleagues whose native tongue isn't English make all sorts of interpretation errors because they have a smattering of English, and then think of what the average German knows of English, then the nuances and subtleties of some of the political discourse in the US are completely and totally lost. And that means that you have an increasing number of people who think they understand what is going on in the US and yet no little or nothing of what is actually going on.

Second: very few Americans are aware of this vast and quietly listening group of people. International news in the US, as we all know, is something on page 12 - maybe - or doesn't get into the paper at all, since local events dominate (if any news channel ignores local events, then either they are heavily subsidized or will go bankrupt within a short period of time: people want to know local news before anything else).

Third: traditional American political discourse has always been robust and healthy, but there has been a sea change since the 1980s of demonizing your opponent. Some of this demonization has been appropriate  - Teddy Kennedy doesn't deserve to be in Congress, but should be ending instead his sentence for manslaughter :-) - but the existence of increasing polarization in US civil society has had a strongly negative effect on civil discourse.

Fourth (from a consistent theme in this blog): the distinction between truth and perception is largely lost in the maelstrom of modern communications overload and hyperbole masquerading as fact.

So what do you have?

Increasing levels of misunderstanding, coupled with almost chiliastic commitment to perception rather than truth.

Which means that the effects of poltiical punditry in the US - be it Limbaugh or be it Franken (actually a bad comparison, since Limbaugh is much more of a pundit than Franken can ever hope to be) - is vastly stronger outside of the US than it is inside of it.

So the incessant squabbling of the left about Bush lying - don't get me started on how wrong that is - that is designed for domestic consumption, of rallying the party faithful to work for the election of the unelectable, is having undesired side effects abroad: the message that people abroad are getting is that the US President isn't any better than a local warlord, who has no scruples about lying in order to further his agenda.

And while there are plenty of people in the US who believe this as well, they're wrong. But that's not my point here.

My point is that the hyperbole of the left in the US is causing the poor standing of the US internationally. It's one thing to clean your laundry in public, it's another thing to go hysterical about it.

But the left doesn't care: two Democratic ex-presidents have spoken overseas about how they percieve Bush is doing a bad job. There used to be an unwritten rule that criticism of the US President stopped at the shores. It no longer does. What is worse: it's done in the name of short-term partisan political advantage. It is the end of civil discourse as we have known it.

The Democrats have transitioned from the usual political disagreement to open political hostility that deserves serious analysis (might get around to it one of these days, but it's not something that Democrats would like to hear....). But because of their political blinders, I think the case can be made that excessive spin (spin will never be eliminated, but it really is excessive nowadays) from the Democrats are increasingly read by those abroad as something that it isn't.

The US is increasingly portrayed as a society that is unwilling to sacrifice, unwilling to make a commitment, unwilling to live up to its word. This started with the US Congress' craven abandonment of the Vietnamese in 1974 and continues today: the Democrats are calling for the same kind of craven abandonment that can only damage the standing of the US in international affairs.

And that I can't understand. And that is something that I cannot forgive the Democrats for. Their hysterical internal squabbling with the sitting US President resonates abroad in ways that they can't even imagine, nor would they want if they would bother to understand what they are doing.

Which appears to me to be nothing less than the dismantling of US leadership in world affairs.

One of the reasons that Iraq was invaded, after all, was that Saddam Hussein believed that the US was bluffing when it announced the intention of regime change, if necessary with force. He was convinced, wrongly, that the US wouldn't invade, supported in that belief by US lawmakers going to Iraq on their own and trying to run their own foreign policy. As a result, he didn't comply with the UN resolutions, trusting instead that the whole thing would blow over. After all, all of his visitors were saying, directly and indirectly, that an invasion would never happen.

Having someone go to a crisis area on their own and try to do their own foreign policy (Democrats all) is not merely stupid, it's downright dangerous. It sets up terrible precedents and fosters the belief that the US is divided, incapable of makign decisions and is nothing more than a paper tiger, unable to make true its threats.

It'll be just great if China decides that the US won't risk Los Angeles for Taiwan, or that sinking a US carrier task force would be a price that a US President would be more than willing to make in order to avoid a greater war.

International politics is more about perception than it is about reality: fostering the wrong perception is dangerous, doubly so when the perception being fostered is for short-term political gain. I see too much dismantling of US credibility abroad not by US actions, but by fostered perceptions by those wearing blinders and ignorant of the effects they are having.

Sonntag, November 13, 2005

This is how my weekend went...

I loved the Batman Begins and am looking forward to getting the DVD. Great movie.

Of course, when I ran across this "quiz", this result would come out...

You scored as Batman, the Dark Knight. As the Dark Knight of Gotham, Batman is a vigilante who deals out his own brand of justice to the criminals and corrupt of the city. He follows his own code and is often misunderstood. He has few friends or allies, but finds comfort in his cause.

Batman, the Dark Knight


James Bond, Agent 007


Neo, the "One"




Lara Croft


Indiana Jones


Captain Jack Sparrow


The Amazing Spider-Man


William Wallace


The Terminator


El Zorro


Which Action Hero Would You Be? v. 2.0
created with

Actually, I had a great weekend after a very trying week. Spent time with the girls, had a long walk in great weather with my wife, and I didn't do much besides that.

Life resumes tomorrow...

Montag, November 07, 2005

Just a note...

Patience, everyone. :-)

I'm about to leave for a two-day conference, I've got a customer then in the shop for two days, I'm backing up a ridiculous amount of data (close to 750 GB) at home which has eaten up all my time otherwise, and I've been very creative with making sure some data makes sense for another 34 sectors for the Austrian economy.

Hence: posting will be, at best, moderate-to-none for the week. Friday I come up for air and can then tell everyone fascinating tales of the world economy, of nuclear policy and of killer recipes for pork roast...

Mittwoch, November 02, 2005

Now Isn't That Ironic...

Greenpeace decides to go see how badly coral is doing as a result of global warming.

Not only do they find that where they were looking, it's doing fine, but they themselves are then responsible for damaging a coral reef because they ran aground.

But the best part is this:

...Greenpeace divers on the Tubbataha expedition had found that healthy coral and no evidence of bleaching, believed to be caused by warming sea temperatures.

...the healthy state of the Tubbataha Reefs did not disprove the theory of global warming, which he described as an "extremely complicated science."

So let me get this right:

Greenpeace went a'diving as a publicity stunt to show how badly the coral is doing.

The coral is doing fine, with no evidence of global warmth.

And their ship then damages the coral.

And all of a sudden global warming is "extremely complicated science".

Now isn't that ironic.

Sorry, I just couldn't resist...

Dienstag, November 01, 2005

What Economists Don't Know...

I ran across this (hat tip: Marginal Revolution) today and it reminded me of a conversation I had with the Head of IT at work.

He's not an economist, but works in a building filled with economists and financial people, and is always asking questions to see if there is something we, collectively, don't know.

He asks the questions because he rarely finds a topic that we don't know something about.

But this is a glaring example that even a nobel prize winner in economics doesn't know everything.

Permissive Action Links or PAL don't work the way that Schelling thinks they do. They are not some magic failsafe device that allows turning off all US nuclear weapons via radio, which is what he clearly states here:

U.S. weapons, for example, have "permissive action links"— a radio signal code that arms weapons but that will also automatically disarm them it if launched at an unauthorized target.

Sorry, that's not how it works. That'd be much too dangerous: imagine if an enemy were to gain access to that code, allowing them to disarm US nuclear weapons at will. Bad, bad idea. Really bad idea. There's no way you can't be sure that the code hasn't been compromised, and Basic Cryptography 101 tells you that if you can't be certain that your code isn't compromised, then that code is worthless.

PALs take the form of an interlock that doesn't allow the weapon to be used unless the proper code is input: make one mistake, and you'll need to take it back to the manufacturer for it to be replaced. You can read more here.

Schelling's basic idea is correct: if a rogue nation is making nukes, we should hope that they make them so that if a mob takes over one, they can't detonate without some sort of safeguards. And these kinds of safeguards are what make a stolen nuke from the US or the former SovUnion more or less useless as a nuclear weapon: you have to rebuild them in order to use them, and that is, mildly, a non-trivial task.

But once the weapon is armed, i.e. once the weapon's PAL has been correctly activated, you cannot disarm it. You can't disarm them with a radio code signal: you can tell bombers carrying them to return to base, but that doesn't disarm the weapons. If a missile is fired, then it will, ceteris paribus, be detonated; you can't disarm missiles with a magic code. The same is true for cruise missiles, sea-based missiles and any weapon where a human is no longer in the loop.

Which is why the US continues to have bombers and why bombers would be, in push comes to shove, probably the weapon of choice if you want to maintain positive control over the usage of nuclear weapons until very briefly before detonation.

Which makes Iran's development of missiles that much more disturbing: they apparently aren't concerned about maintaining control, but want to use them.

Or that they really don't understand the world that they appear to want to enter.

Which makes making sure that they don't get them that much more important.

And if anything, we should be sure that India and Pakistan use PALs.

And there is a reason for countries like Iran not to have nuclear weapons: they are irresponsible. For them, nukes are the key to being able to attack Israel with impunity: the Israeli deterrence, even though officially non-existent, does work. Remove that and all bets are off.

And given Iranian rhetoric, don't think they wouldn't be used. For them, it's the whole point of developing them: to destroy Israel first and to prevent the US from retaliating second.

And with nuclear weapons comes great responsibility. That's why none have been used since WW2. That's why the cold war never turned hot. Once you have nuclear weapons, you become a rational player, if and only if you are responsible enough to understand that they can't be used. But give them to a madman, or a religious fanatic desperate for the tool for destruction of a real or imagined enemy, i.e. someone who does not play according to the rules of the game, and all bets are off.