In Praise of ... Skilled Labor

This caught my eye.

One of my greatest problems with academia and those who populate it - I grew up in an academic family - is the implicit, never spoken assumption that white collar work is better than blue collar work.

But it's not an assumption: it's an article of faith, a fundamental underlying belief that working with your hands is something that, at best, you do as a hobby, one to be indulged by those who would rather that their friends not be so mundane.

What arrogance.

At one point in my life, when I was more indulgent in using my time to explore arcane ideas, I studied philosophy and worked on the philosophy of technology, which, as you can imagine, is a fairly poorly defined field. Technology, after all, is nothing more than the logic of tools: how can this be studied?

In many ways it can't: good technology is transparent, it becomes an extension of your self, of your being, such as using a hammer to drive in nails. A good hammer, properly weighted and balanced, is a thing of beauty, allowing you to cease paying attention to holding it and aiming it to hit the nail and not your thumb: a good hammer lets you put the nails precisely where you want them to be, without even contemplating how you are going to do it. This is also true for master carpenters: they don't think about how to build that cabinet, they just make it so.

The article I refer to has a PhD is political philosophy, but has found that his real life calling is as a motorcycle repairman.


For an academic, one who lives and worships in the ivory tower, that is an admission of vast failure, a proof that admissions to graduate programs should be tightened to keep out this kind of people.

For me, it's really the main reason I'm not an academic.


One of my hobbies is watchmaking. Not merely collecting watches - I am the moderator for what has become the world's largest and most popular watch collecting forums on the Internet, Watchuseek in the Netherlands, moderating both the Vintage & Pocket Watch forum as well as the Pilot/Military watch forum - but also the watchmaking itself. I've had around 30 hours of training at this point from a master watchmaker and know just barely enough to realize that I know very little about watchmaking.

But I persevere. I don't have a proper watchmaking area at home and clearing the debris from my desk - blogging, photography, watches, bills, sundries - prevents me from really getting into it. I want an old watchmaker's lathe, powered by a foot pump, to work on parts; I want a micro CNC machining center to make gears. I have ideas about how to improve watch accuracy that have to be tried out in the real world.

But most of all, I marvel at watch movements. The best are pieces of art, the worst are functional tools that simply do their job. I know several watchmakers at this point, from the fairly rude and impatient master watchmaker with over 50 years career as master watchmaker behind him to the bright, industrious, dedicated master watchmaker who taught the courses I took and who, with a smile, fixes the mistakes and errors I bring him.

So here is praise for the manual worker, the fellow who has dedicated his life to doing things with his hands, who can take a look at something and who doesn't even have to think about what to do and how to do it, but rather visualizes the final product and lets his hands do the rest.

I've tried to persuade my daughters to become watchmakers, to do what I wished I could do. So far no luck: at least they do know, however, that there are real-world jobs that don't require a degree.

But what those real-world jobs require is skills.


To bring this back to the world of economics, one has to understand the value of labor. It is the great failure of most economics to not differentiate between skilled and unskilled labor, and even then not to differentiate between skill levels of labor. It is perhaps one of the great failures of the economics profession to not understand fully what skilled labor really means, which is not unsurprising, given the difficulties in evaluating skilled labor. It is indeed the great failure of the unions that they reward seniority, rather than skills: that has, fundamentally, weakened the labor movement, rather than to have strengthened it.

The point that the article I refer to makes briefly deserves to be expanded: skilled labor can't be exported. It has to be consumed locally, and it is mobile. Not nearly as mobile as capital, but nonetheless capable of voting with its feet. You might be able to send, say, a watch to be worked on in some distant city, but you have to seek skilled labor. In the US skilled labor creates a reputation via word-of-mouth, recommendations from satsfied customers; in Europe, skilled labor is the result of apprenticeship systems with guilds and the creation of formalized training for master craftsmen. I don't know how it is done in Japan or elsewhere in Asia.

Skilled labor is always in demand. Unskilled labor is dumb labor: it makes no difference who does it, it can be done anywhere, and at the end of the day the unskilled laborer is indeed the proletariat, a faceless member of a group that lacks the control over the means of production. Skilled labor always controls the means of production: simply put, a company that thrives by using skilled workers is one that cannot afford to have unhappy workers who take their skills with them when they leave. That is, they control the means of production.

Unskilled workers are readily exchangeable, and indeed many industries have effectively left the industrialized countries to move to China and elsewhere in Asia where unskilled labor is almost so cheap as to be meaningless in terms of costs during the production process. Rote skills, standing on an assembly line, putting part A in part B and attaching two screws in 12 second takt, that is the modern face of unskilled labor. It is where labor has become industrialized, where the skill is mere dexterity, doing without understanding.

Those jobs move whereever their cost is lowest. The people don't, and unemployment results. Japan has hollowed-out, as has the UK and the US, with many if not most unskilled manufacturing gone to lower-cost countries. Europe is actively exporting these jobs to Eastern Europe.

But skilled labor?

Japan is facing a massive shortage of skilled labor. Germany as well, despite high unemployment rates. Try to find a good plumber in the US, or a good electrician, and you will quickly find how scarce such labor is, especially if you are not in a major city.


Labor policies today should be oriented towards increasing labor skills. Sure, programs exist right now to help increase labor skills, but these are ponderous efforts crippled by misconceptions of what skills are needed.

But consider this to in praise of skilled labor. For the post-industrial society, it will turn out to be that which makes or breaks the economy.

I'd Never Thought I'd Read This...

Here is an editorial in The Japan Times which stopped me in my tracks.

Right there, in the first sentence:

Nearly six months after U.S. President Barack Obama entered the White House, it is apparent that America's Asia policy is no longer guided by an overarching geopolitical framework as it had been under President George W. Bush.

Wow. I guess I'm so used to the usual Bush-bashing from editorialists and journalists that I've simply never come to expect any but that, and here is someone pointing out the massive problem facing the Obama Administration, a lack of focus. But it is nice to see the recognition that US foreign policy under President Bush was understood abroad to have an overarching geopolitical framework...

Or perhaps, more exactly, a massive focus on China to the exclusion of most other countries there. This is, I think, indeed a problem: India is in so many ways the more "natural" partner for the US, if one ignores the massive Chinese purchases of US treasury bonds.

Unfortunately, the Obama Administration apparently thinks that China is the only country that matters: this means, in classic liberal wonk fashion, that the other countries will, for the most part be simply ignored or put on the back burner.

Japan and India are, basically, the losers in the Great Game as it is being played out in Washington. The new Ambassadors to both countries? Political rewards for the faithful. The new Ambassador to India is, to quote, an "obscure former Congressman Timothy Roemer"; the new Ambassador to Japan is "a low-profile Internet and biotechnology lawyer, John Roos". Neither have any real connections to these countries, and join the long list of US Ambassadors whose claim to fame is the ability to generate campaigning money and organize the party faithful or receive their Ambassadorships as part of some political deal involving others.

For most countries, the US Ambassador is a fairly big deal, representing the US in that country. Sending a party hack or giving the post away to one of the party faithful is a clear sign of disinterest that many countries recognize and while they may not like this, there is virtually nothing they can do.

Sending these Ambassadors sends a clear message: you're not really very important. Remember who has been Ambassador to Japan in the past: President G.H.W. Bush (aka Bush 41) was Ambassador there way back when. That is the quality of people you send, not an internet and biotechnology lawyer who just happened to be one of President Obama's premier fundraisers.

Especially when it had been planned to send Jospeh Nye, former US Assistent Secretary of Defense.

Timothy Roemer? Turns out to be a few days younger than I am (ah, but for a few different choices in life...), was a Representative in the House for Indiana for around 10 years, choosing then to leave the House for think-tank work. He's a strong Obama supporter, and his work lies in disarmament and anti-proliferation.

Well, that's not quite the political hack that Roos appears to be, but do we see the message being sent here? Sending an anti-proliferation and disarmament specialist to be the Ambassador to India?

Guess what pressures will be put on the Indian government there. This will be analyzed and parsed by the Indian government, think tanks and pundits in India, which points to the path that US policy towards India may take: that of pressuring India to give up its nuclear plans. Watch for that to come up as a policy point over the next year or so.

The Indians have already noticed that President Obama has pointed to a security triangle of the US, Japan and China, pointedly leaving India out of the game:

It is as if the U.S.-Japan-India trilateral has fallen out of favor with the new U.S. administration, just as the broader U.S.-India-Japan-Australia "Quadrilateral Initiative" — founded on the concept of democratic peace and conceived by then Japanese Prime Minister Shinzo Abe — ran aground after the late-2007 election of Kevin Rudd as the Australian prime minister. Without forewarning New Delhi or Tokyo, the Sinophile Rudd publicly pulled the plug on that nascent initiative, which had held only one meeting.

Now the Obama administration seems intent to bring down the U.S.-Japan-India trilateral. While announcing the new U.S.-China-Japan trilateral, it did not forget to cite the U.S.-Australia-Japan and U.S.-Japan-South Korea trilaterals. But there was no mention of the U.S.-Japan-India trilateral, as if that Bush-endorsed enterprise had become history like Bush.

The writer here, Brahma Chellaney, is Professor of Strategic Studies at the privately funded Center for Policy Research in New Delhi.

Why is this happening?

According to Chellaney, it is because the economies of the US and China - "Chimerica" - have become so interdependent that it will drive political rapproachment and further economic integration. The US and China together represent 31% of world GDP and over 25% of total world trade. But not all is and can be rosy:

But China's expanding naval role and maritime claims threaten to collide with U.S. interests, including Washington's traditional emphasis on the freedom of the seas. U.S.-China economic ties also are likely to remain uneasy: America saves too little and borrows too much from China, while Beijing sells too much to the U.S. and buys too little. Yet, such is its indulgence toward Beijing that Washington seeks to hold Moscow to higher standards than Beijing on human rights and other issues, even though it is China that is likely to mount a credible challenge to America's global pre-eminence.

...

And this is the perception from at least Prof. Chellaney:

Despite its China-centric Asia policy, the Obama team, however, has not thought of a U.S.-China-India trilateral, even as it currently explores a U.S.-China-South Korea trilateral. That is because Washington now is looking at India not through the Asian geopolitical framework but the subregional lens — a reality unlikely to be changed by U.S. Secretary of State Hillary Clinton's forthcoming stop in New Delhi six months after she paid obeisance in Beijing. While re-hyphenating India with Pakistan and outsourcing its North Korea and Burma policies to Beijing, Washington wants China to expand its geopolitical role through greater involvement even in Afghanistan and Pakistan.

This is where the US has a long way to go before they can really understand how to play The Great Game: Obama's Realpolitik is turning out to be flawed, because he is apparently incapable of playing countries off one another, as has been done in the past under such folks as Kissinger:

It is shortsighted of the Obama team to lower the profile of India and Japan in America's Asia policy. Tokyo may be ceding political capital and influence in Asia to Beijing, and India's power might not equal China's, but Japan and India together can prove more than a match. The Japan-India strategic congruence with the U.S. is based as much on shared interests as on shared principles.

This raisies several points:

1) US policy should be driven more by shared principles rather than the chimera of shared interests: interests can change on short notice, principles do not. Those who share principles can disagree on the nuances, but there will never be major disagreements, as the fundamental principles are the same; those who have shared interests can naturally have massive conflicts of interest on other topics, and that is most assuredly the case for China and the US.

2) The degree to which the US and China, driven by mutual interests (and firmly within the realm of Realpolitik), are increasingly seen to cooperate by other countries in Asia as being problematic, as there are some fairly huge differences between the US and China in terms of common principles: it is also a very poor policy choice to belittle and antagonize your allies of principle in order to gain ground with your ally of interests, especially when these interests are drive mainly by economic interests, and especially when the relationship is one of debtor and consumer on the one hand and creditor and supplier on the other. While this will be a period of great ascendency for China in Chinese-US relations, the question then arises to which degree are US principles to be sacrificed for short-term gains?

If one reads the Obama Administration clearly, as I've tried to do, then you realize that this Administration will go down in history as one of the least principled Administrations, driven entirely by interests and held to principle largely to avoid being unmasked as unprincipled. At the end of the day, the Chicago machine has only one principle: stay in power.

On that note, the Chinese and the Obama Administration share the same principle. But it's the only one that they do share.

Afficiandos of Realpolitik would say that such a principle is the only one that matters. That's why Realpolitik was so successful in preventing wars and achieving lasting peace. And yes, I am being sarcastic.

As Professor Chellaney says:

At a time when Asia is in transition, with the specter of power disequilibrium looming large, it has become imperative to invest in institution-building to help underpin long-term power stability and engagement. After all, Asian challenges are playing into global strategic challenges. But the Obama administration is fixated on the very country whose rapidly accumulating power and muscle-flexing threaten Asian stability.

That's really going to help. I dare say that this was not the change that was hoped for...

The Inmate In Charge Of The Asylum...

This is too good to pass up.

Senator Barney Frank is the inmate in charge of the asylum.


Instead of acknowledging that forcing banks to make loans that normal risk management would say were high risk loans, likely to default, lies at the core of the current financial crisis, he firmly believes that the sub-prime crisis only developed because bankers were greedy and the Bush Administration is to blame.

And yes: the banks were forced to make the loans. They were required, by law, a law that they strongly opposed, to create and make sub-prime loans. No sub-primes, no sub-prime crisis.

But in the world of Barney Frank, a world that has no economic effects from his actions, it is more important to continue his legacy of "helping those disadvantaged to live the American Dream".

After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.

After all, it's not real money: it's taxpayer money to bail out the next set of banks that go tits up.

Fannie and Freddie have restricted loans to condo buyers in these situations because they represent a red flag that the developments -- many of which were planned and built at the height of the housing bubble -- may face financial trouble down the road. But never mind all that. Messrs. Frank and Weiner think, in all their wisdom and years of experience underwriting mortgages, that the new rules "may be too onerous."

Duh. High risk investment objects require high risk premiums, turning them, quite properly, into white elephants that no one wants. Want to bet that there are ties between these investors and the Democratic Party? That these investors are crying how terrible it is that these beautiful apartments, built by loyal Democrats, can't be sold because of those greedy bankers?

And in a display of the wit for which Mr. Frank is famous, the letter writers slyly point out that higher lending standards won't reduce taxpayer exposure to bad loans because the Federal Housing Administration has even lower standards for condos. "While the underlying goal may be to reduce taxpayer exposure relating to the current conservatorship of the GSEs [government sponsored entities], such a goal would not have such an effect if it merely results in a shifting of loans from the GSEs to the FHA." Tougher lending standards will merely shift market share from one government program to another, so what's the point in being cautious?

Perhaps one should contemplate, instead, that the FHA tightens its standards...

Fannie and Freddie have already lost tens of billions of dollars betting on the mortgage market -- with that bill being handed to taxpayers. They face still more losses going forward, because in the wake of their nationalization last year their new "mission" has become to do whatever it takes to prop up the housing market. The last thing they need is lawmakers like Mr. Frank, who did so much to lay the groundwork for their collapse, telling them to play faster and looser with their lending standards.

Fannie and Freddie have always been political creatures under the best circumstances. But we don't remember anyone electing Mr. Frank underwriter-in-chief of the United States.

No one did.

This is the perfect example of why Fannie and Freddie must be closed and why the US government should be banned, permanently, from ever setting up anything even remotely resembling this. What worked for decades under both Republican and Democratic administrations was abused and ruined by the Clinton Democrats, who have done more damage to this country than anyone really realizes, less direct as indirect, with their greed and their belief that the taypayers owe them a life of luxury and wealth. There is no other way to explain their levels of corruption, malfeasance and outright greed. The Clinton Democrats - and Barney Frank belongs to them - are the reason why we are in recession: they tried to manipulate markets, and in their greed and incompetence manipulated them to the point where when the markets reacted, as markets do, they undid the accomplishments of a generation.

Because that is what the current recession and financial crisis is doing: undoing the accomplishments of an entire generation, the sandwich generation, those between the baby boomers and the lettered generations (X, Y, whatever). It is the folks between 40 and 55 years of age, that age right now, who have seen their major investments disappear in smoke, who are underwater with their mortgages, who will not be able to even contemplate retirement at any age under 65 and who will probably have to work significantly longer just to break even.

Y'all can thank Barney Frank for that. He's still at it, still the inmate in charge of the asylum, digging the hole deeper and deeper.

But y'all voted for him and the Clinton Democrats. Thanks a lot.

Further Data Points For The Trend IX...

Or actually, in this case, a single data point.

The Obama Administration, during a recent press conference, did something that no previous administration did: it orchestrated questions.


I lived in DC for four years, and like everyone in DC, I had a love/hate relationship with the Washington Post. I hated the at times snide and arrogant liberalism that permeates the paper like water permeates the ocean, but there were always those journalists and columnists who were and are shining examples of what their profession out to be.

Instead of what it generally has become.

Dana Milbank is one of those (the former, not the latter), as you can see here.

After the obligatory first question from the Associated Press, Obama treated the overflowing White House briefing room to a surprise. "I know Nico Pitney is here from the Huffington Post," he announced.

Obama knew this because White House aides had called Pitney the day before to invite him, and they had escorted him into the room. They told him the president was likely to call on him, with the understanding that he would ask a question about Iran that had been submitted online by an Iranian. "I know that there may actually be questions from people in Iran who are communicating through the Internet," Obama went on. "Do you have a question?"

Pitney recognized his prompt. "That's right," he said, standing in the aisle and wearing a temporary White House press pass. "I wanted to use this opportunity to ask you a question directly from an Iranian."

Pitney asked his arranged question. Reporters looked at one another in amazement at the stagecraft they were witnessing. White House Chief of Staff Rahm Emanuel grinned at the surprised TV correspondents in the first row.

The use of planted questioners is a no-no at presidential news conferences, because it sends a message to the world -- Iran included -- that the American press isn't as free as advertised. But yesterday wasn't so much a news conference as it was a taping of a new daytime drama, "The Obama Show." Missed yesterday's show? Don't worry: On Wednesday, ABC News will be broadcasting "Good Morning America" from the South Lawn (guest stars: the president and first lady), "World News Tonight" from the Blue Room, and a prime-time feature with Obama from the East Room.

This is a further data point to understand how the Obama Administration is shaping up: they view the press as to be manipulated, to be organized, to be turned into something sycophantic, resembling not a free press, but rather a captive press like that of the former Soviet Union or the press in China. In other words, a political tool.

Rahm Emanuel grinning shows his contempt for the press, pride and joy in his ability to manipulate and control them. He is controlling access, he is controlling content, he is controlling which careers to make and which careers to break: these are not the actions of a man working with the press, but rather the actions of a man controlling the press. Welcome to Chicago.

"The Obama Show" was the hottest ticket in town yesterday. Forty-five minutes before the start, there were no fewer than 107 people crammed into the narrow aisles, in addition to those in the room's 42 seats. Japanese and Italian could be heard coming from the tangle of elbows, cameras and compressed bodies: "You've got to move! . . . Oh, God, don't step on my foot!" Some had come just for a glimpse of celebrity. And they wanted to know all about him. "As a former smoker, I understand the frustration and the fear that comes with quitting," McClatchy News's Margaret Talev empathized with the president before asking him how much he smokes.

...

The host of "The Obama Show" dispatched with similar ease a challenge from CBS's Chip Reid, asking whether his hardening line on Iran was inspired by John McCain. "What do you think?" Obama replied with a big grin. That brought the house down. And the studio audience laughed again when ABC's Jake Tapper tried to get Obama to answer another reporter's question that he had dodged. "Are you the ombudsman for the White House press corps?" the president cracked.

But rather than answer substantially, President Obama is entertaining the crowd, playing them, ensuring first and foremost that his press conferences become trivial, that he cannot be threatened by the press, that he's in control. And the vast majority of the press? Able and willing participants in what is increasingly becoming a three-ring farce.

The laughter had barely subsided when the host made another joke about Tapper's reference to Obama's "Spock-like language about the logic of the health-care plan."

"The reference to Spock, is that a crack on my ears?" the president asked.

Isn't he just so adorable?

But yesterday's daytime drama belonged primarily to Pitney, of the Huffington Post Web site. During the eight years of the Bush administration, liberal outlets such as the Huffington Post often accused the White House of planting questioners in news conferences to ask preplanned questions. But here was Obama fielding a preplanned question asked by a planted questioner -- from the Huffington Post.

Pitney said the White House, though not aware of the question's wording, asked him to come up with a question about Iran proposed by an Iranian. And, as it turned out, he was not the only prearranged questioner at yesterday's show. Later, Obama passed over the usual suspects to call on Macarena Vidal of the Spanish-language EFE news agency. The White House called Vidal in advance to see whether she was coming and arranged for her to sit in a seat usually assigned to a financial trade publication. She asked about Chile and Colombia.

If this had been the Bush Administration there'd be scores of irate reports on how the press is being manipulated and abused. President Obama and Rahm Emanuel are playing the Washington Press Corps for the fools that they apparently have become.

Why doesn't he simply trivilize the whole thing and simply invite only "journalists" from People magazine and the other trivial wastes of dead trees that pass for magazines and newspapers in the United States? While I have no desire to cast aspersions on Macarena Vidal's competence as a journalist, giving her a seat usually assigned to publications like Barrons, International Business Daily, Forbes, Business Week, The Financial Times, the Wall Street Journal or any other number of publications that actually cover Washington for business, rather than for someone relatively unknown to ask a pre-arranged question, points to the role that the Press will play for the Obama Administration.

Useful fools.

But what does this imply, and why is this a further data point?

The implication, of course, is that the Obama Administration is not interested in being open to the public, but will control not merely the access to the President, but first and foremost will control who is allowed to inform the public. By turning it into entertainment, President Obama is creating an image - sorry, he's been doing that from Day 1, hence: maintining the image - of someone who is so perfect for the job that he's relaxed and cool under all and any conditions, the perfect authority figure, the man in control of everything. Nothing is so dangerous for such personality types as a question answered, or even the posing of a question not approved. He is a control freak, wanting to leave nothing open and uncontrolled.

Why is this important? Because this means that Presidential press conferences will be nothing more than orchestrated farces of the kind that you see only in countries who cannot afford a free press.

Watch for the following: financial help for ABC, whose ratings are the worst of any of the networks and whose reputation is being actively trashed not merely by the "journalists" who are going along with the Day of Worship, but also the White House who would even contemplate singling out one network to favor.

Once again, welcome to Chicago, where nothing political ever happens by accident...

Further Data Points For The Trend VIII...

This time, two points on Obama, Chicago politics, and the primacy of money in this style of politics...

This underscores something I've been saying for a while: Obama's politics can be best understood by understanding Chicago politics.

...he does business Chicago-style. His first political ambition was to be mayor of Chicago, the boss of all he surveyed; he has had to settle for the broader but less complete hegemony of the presidency. From Chicago he brings the assumption that there will always be a bounteous private sector that can be plundered endlessly on behalf of political favorites. Hence the government takeover of General Motors and Chrysler to bail out the United Auto Workers, the proposal for channeling money from the private nonprofits to the government by limiting the charitable deduction for high earners, the plan for expanding government (and public employee union rolls) by instituting universal pre-kindergarten.

Chicago-style, he has kept the Republicans out of serious policy negotiations but has allowed left-wing Democrats to veto a measure upholding his own decision not to release interrogation photos. While promising a politics of mutual respect, he peppers both his speeches and impromptu responses with jabs at his predecessor. Basking in the adulation of nearly the entire press corps, he whines about his coverage on Fox News. Those who stand in the way, like the Chrysler secured creditors, are told that their reputations will be destroyed; those who expose wrongdoing by political allies, like the AmeriCorps inspector general, are fired.

This ties in directly with the second point: how money will determine the policies of President Obama in ways not seen since the days of Nixon: fundamentally, a corrupt politician was caught, his corruption threatened his political office, and the person fired ... is the person who caught him.

This is where President Obama is most vulnerable, where the most can be made of his governing style, which is, at the end of the day, fundamentally corruptible. This is the quid-pro-quo of Chicago-style politics.

In the political patronage system, if big-time donors think they are being harassed - which may simply mean they have run afoul of the law or of reporting requirements - they are too-often forgiven, depending on the seriousness of the offense and how likely it is to be publicly reported or prosecuted.

The press could help keep things honest, but we all know that the press is working with fewer resources and fewer readers - and Walpin's firing is not a YouTube sort of story.

This is where the writer gets the story wrong: the press could help keep things honest, if the press were even remotely interested in the fact of corruption within the Obama Administration. Of course, they're not: this is a non-story for most, if not all, DC reporters.

So much for the Fifth Estate.

Utter Stupidity From Academia...

Who is Carole M. Swain and why should you care?

She is quoted in the Washington Post thus:

Even among proponents of a congressional apology, reaction to yesterday's vote was mixed. Carol M. Swain, a professor of political science and law at Vanderbilt University who had pushed for the Bush administration to issue an apology, called the Democratic-controlled Senate's resolution "meaningless" since the party and federal government are led by a black president and black voters are closely aligned with the Democratic party.

"The Republican Party needed to do it," Swain said. "It would have shed that racist scab on the party."

It's that last bit that is truly bizarre: the pedigree of the Republican Party is anything but racist, if you would bother to actually look at the history of the party of Lincoln. It is a party that was created as an antislavery party, it is the party that proposed the 13th, 14th and 15th Amendments to the constitution, and it is the party that provided the support for the Civil Rights Act of President Johnson when the members of President Johnson's own party almost stopped it from becoming law.

If anything, the Democratic Party has been the party of institutionalized racism and segregation, especially southern Democrats, whose legacy is repugnant.

This is mind-boggling: the racist scab that Swain refers to is the invention of the modern and has no relationship to the past. This is a travesty of history at best: it is the epitome of the Big Lie.

And it is utter stupidity from academia. Stay tuned for more: there's a lot more coming...

Iran and the Obama Administration...

If you want to know anything about Iran and what is going on there, go read Michael J. Totten over on Commentary.

Above all, the man can write.

Here's what prompted me to write:

Obama Administration officials still hope they can talk Khamenei out of developing nuclear weapons and supporting Hamas and Hezbollah. This is delusion on stilts.

Perfect description of current US foreign policy if I ever heard one.

Delusion on stilts indeed.

You Can't Have It Both Ways...

According to Frank Rich, of the New York Times, the "Obama-Haters" are getting mighty uppity and their call to resistance is appearing to become "pseudo-Scriptural".

Give me a break.

You can't have it both ways: the left is putting Obama on such a pedestal that they are comparing him to God (see here): you can't expect the loyal opposition to pretend that the rhetoric of the left is simply rhetoric. As always, the left plays with the language so that words mean what they intend them to (like Humpty-Dumpty in Alice in Wonderland); that others understand their words in ways that the language means them to is, for the them, incomprehensible.

You can't have it both ways: you can't effectively claim that your boy is God (and those are the words involved) and then berate conservatives for reacting negatively to that over-the-top rhetoric with their own.

Unless of course, you're Frank Rich. You see, it's okay for the left to call President Bush a fascist and compare him to Hitler, but the other way around?

He didn't seem to grasp that "fascism" is nonsensical as a description of the Obama administration or that there might be a risk in slurring a president with a word that most find "bad" because it evokes a mass-murderer like Hitler.

Just replace Obama with Bush and you'd think that Mr. Rich was deploring the over-the-top rhetoric of the left during the Bush years.

You can't have it both ways: you can't, Mr. Rich, savor the ravings of the Bush Derangement Symptom crowd over the last 8 years and then express dismay and fear that conservatives might use the the same rhetoric and express the same feelings of outrage.

You can't claim the title of godhood for President Obama and then expect someone like Jon Voight not to say that Obama is a false prophet.

You can't have it both ways. The time to have reigned this in was 2001. Not 2009.

You can't have it both ways.

Three More ...

The global climate alarmists are like vampires, always re-awakening when others are asleep, following an alternative reality that has little to do with the real world, living as parasites on the community. Their ideology, seductive and prone to leave the affected impervious to argument and swooning at the voice of their master(s), is fundamentally suspect: it is based on ignorance and keeping people in the dark about reality, rather than serious scientific examination.

The first of the three links here is to Roger Pielke, Jr., a climatologist who has seen the meaning of the work he has done turned completely around in an attempt to prove a point that he actually disproves, in such a way that the only real explanation is apparently outright misrepresentation and deliberate fraud, but in a government document that the watermelon people are going to be using in the years to come to brow-beat their opponents.

The second: fundamental forecasting errors by MIT scientists that can really only be explained by ideological blindness and a collapse of the scientific method: the parading of opinion as scientific fact.

The third: that the models used by global warming proponents continue to be fundamentally flawed and incapable of standing up to rigorous testing, resulting in widely variant results for something that should, for all purposes, be readily estimable within a fairly small bandwidth if their models were actually useful.


I will reiterate the question raised by Doug Hoffman and Professor Pielke: how many years of wrong results are necessary before we reject the IPCC reports and the models they are based on?



The answer, of course, is that the "truth" of global warming is chiliastic and does not entertain empirical verification: it is true because of first principles, not because the data tell us so.

Dave, There A Message For You...Here's Your Fisking.

Sigh.

I used to really, really like David Letterman. Since I can only very, very rarely get any late-night US TV programming, living as I do in Germany, it's no wonder that I haven't really be paying attention.

But then came that fateful top 10 list.

You know the one.


So he apologized. When I read the apology, all I could think of was ... this wasn't the Letterman I used to know.

Hence the following fisking, original here.

"All right, here - I've been thinking about this situation with Governor Palin and her family now for about a week - it was a week ago tonight, and maybe you know about it, maybe you don't know about it.

First of all, the usual Dave attempt at being charming and disarming: maybe you know, maybe you don't. Give his long-running career as a talk show host, of course people know. He's trying to be deliberately disarming here, trying to say "gee, maybe this isn't even of interest to you at all.

But there was a joke that I told, and I thought I was telling it about the older daughter being at Yankee Stadium.

Here's the start of the defense strategy, and boy is it a classic passive-aggressive strategy, one of the better ones, but one that fundamentally, at its core, says "I'm not the one who did something wrong". You see, he doesn't say he made a mistake, but rather that his viewers made the mistake: he thought he was telling it about someone else, i.e. Dave didn't make the mistake, but rather the viewers made the mistake of misinterpreting what he said. Like I said, classic passive-aggressive strategy of shifting blame from the self to anything else.

And it was kind of a coarse joke.

Again, not an apology: it's an admission, but not an apology. He told a coarse joke.

This is where Dave is getting into deep water: he went after someone to use them as the butt of a coarse joke.

What is, then, a coarse joke? Take a look here (you may have to scroll some): it is a joke that crosses a boundary. Wait, that's not right: it's a joke that transgresses a boundary, one that goes clearly over to the dark side. It is common, ugly, mean; it uses the deliberate violation of moral and ethical standards to make a joke at the cost of someone. A coarse joke is vulgar and is most fundamentally aimed at hurting someone, which is why it is coarse: to use someone's pain and embarrassment in order to make someone else laugh is low indeed.

But Dave doesn't really even admit that, but modifies it: "kind of a coarse joke" means "not really a coarse joke if you are on my wavelength and understand what I mean".

There's no getting around it, but I never thought it was anybody other than the older daughter, and before the show, I checked to make sure in fact that she is of legal age, 18.

Again: Dave denies that he really meant it: his people - never believe for a moment that he actually did any checking, he has people for that - apparently didn't tell him ...

What, actually? He's saying, in best passive-aggressive form, that he's not to blame, he thought it was the older daughter. Did that make the joke any less coarse, any less demeaning? Of course it doesn't, but here he is claiming that it would have been apparently okay to do so.

Yeah.

Again, an affirmative statement: yes, he's saying, yes this is the case, that that was his thinking, that was his intent.

But the joke really, in and of itself, can't be defended.

But isn't this exactly what he's been doing so far? This is the first time that he say that the joke, in and of itself - für sich and an sich, as the German philosophers would say - can't be defended. But what does he mean with "can't be defended"? He acknowledging at least that he doesn't want to talk about the joke, but what can be defended - and he is quite clearly doing that here - is Dave himself.

The next day, people are outraged.

Time lag: they weren't outraged immediately, but first after a while. This removes the immediate emotional reaction to the vulgarity of the joke and makes it appear that the reaction was more carefully planned and done deliberately.

They're angry at me because they said, 'How could you make a lousy joke like that about the 14-year-old girl who was at the ball game?'
And I had, honestly, no idea that the 14-year-old girl, I had no idea that anybody was at the ball game except the Governor and I was told at the time she was there with Rudy Giuliani...And I really should have made the joke about Rudy..."

Again, this is Dave saying "it's not my fault! I thought it was her older sister!" He's twisting here, trying to move the intent from what it was, to be hurtful, to cause pain and embarrassment.

"But I didn't, and now people are getting angry and they're saying, 'Well, how can you say something like that about a 14-year-old girl, and does that make you feel good to make those horrible jokes about a kid who's completely innocent, minding her own business,' and, turns out, she was at the ball game.

"But I didn't": sin of omission, which is a lesser evil than a sin of commission. Don't think that Dave doesn't know the difference. Dave makes a joke, a joke designed to be hurtful, to cause pain and embarrassment for our amusement, to deliberately cross a barrier for a chuckle, and just by accident "turns out" that the joke is clearly about a 14-year old girl.

I had no idea she was there.

See: again, passive-aggressive behavior, "I didn't know". Doesn't excuse what he said, doesn't change what he said, it is only an attempt to focus on Dave's intent, rather than what everyone heard.

So she's now at the ball game and people think that I made the joke about her.

All of a sudden the situation has changed: Dave's joke wasn't "supposed to be about here, he is innocent: she makes him guilty by simply suddenly being there, ruining his joke. Again, the attemtp is to make this whole thing not Dave's fault.

Come on: David Letterman doesn't write his material, he has a group of writers who do this. They discuss the monologue, they discuss the opening, they discuss the top ten list, they discuss everything so that Dave knows when to do his jokes, when to bring the zingers to entertain. This is not some folksy guy, he hasn't been since he moved to New York.

The point is not that his crew let him down, but deeper than that: no one in his crew thought the joke would have been too vulgar, too coarse to have been made. But contemplate this: Dave is really claiming that he didn't know, that this was a lapsus, a lapse. If you believe that Dave writes his own jokes and can make a mistake, then you can accept his apology: if you know that there's a team of people behind him, then you know that his failure was a group effort, which means ... it wasn't an error. it was deliberate.

And, but still, I'm wondering, 'Well, what can I do to help people understand that I would never make a joke like this?' I've never made jokes like this as long as we've been on the air, 30 long years, and you can't really be doing jokes like that.

First of all, he wonders: he doesn't understand, he doesn't know what he did wrong. He's never made jokes like this?

Get real: he constantly makes jokes like this, it's just that usualyl they're not about 14 year olds, or, for the most part, even 18 year olds. He's at times - not always - the master of the double meaning, the sly innuendo, the deliberate demeaning: I've seen him when Paris Hilton was on the show once, and that was exactly this kind of joke.

What can I do to help people understand that I would never make a joke like this?

It's all about Dave: all those folks out there just don't understand that I'm not the bad guy here, that I'm not the one in the wrong. Y'all just don't understand me!

And I understand, of course, why people are upset. I would be upset myself.

See the logic? If I had made such a joke, I would be upset: but since I didn't intend it so, you shouldn't be. Sorry Dave, that is classic passive-aggressive declination to remove personal blame.

"And then I was watching the Jim Lehrer 'Newshour' - this commentator, the columnist Mark Shields, was talking about how I had made this indefensible joke about the 14-year-old girl, and I thought, 'Oh, boy, now I'm beginning to understand what the problem is here. It's the perception rather than the intent.'

This is what prompted me to write this post. The problem for Dave isn't that he made such a joke: the problem is that people are perceiving that he made the joke. Sorry, I have to write this one out: Give Me A Fucking Break, Dave.

There's a message for you, Dave: you made the joke, your people failed to protect you from gross embarassment, and it's completely and totally inacceptable for you to think that the problem is that people are simply perceiving the whole thing the wrong way.

It doesn't make any difference what my intent was, it's the perception.

Well, no shit, Sherlock. Welcome to reality. It's always the perception that matters: intent is meaningless, intent is a crock. We'll never know, beyond what you dissemble here, what you real intent was: that you are grossly embarrassed at being caught and are blaming, effectively, the viewer by not understanding what you meant: classic passive-aggressive "I didn't mean it, you made me do it" behavior.

And, as they say about jokes, if you have to explain the joke, it's not a very good joke. And I'm certainly - " (audience applause) "- thank you. Well, my responsibility - I take full blame for that. I told a bad joke. I told a joke that was beyond flawed, and my intent is completely meaningless compared to the perception. And since it was a joke I told, I feel that I need to do the right thing here and apologize for having told that joke. It's not your fault that it was misunderstood, it's my fault. That it was misunderstood." (audience applauds) "Thank you. So I would like to apologize, especially to the two daughters involved, Bristol and Willow, and also to the Governor and her family and everybody else who was outraged by the joke. I'm sorry about it and I'll try to do better in the future. Thank you very much." (audience applause)

I've gone and left the "audience applauds" in there: this is the sign of a monstrous ego. He takes responsibility, but in such a way that he points to not be responsible; the joke was bad, but the real problem is that everyone has the wrong perception. It's Dave's fault that it was misunderstood: it's not so much that the joke was bad, deliberately aimed at causing pain and embarrassment, it's that I didn't do the right way so that you'd have understood it the way I wanted it to be understood.

Dave, stop digging. You're in deep enough.

This wasn't an apology: it was a mea culpa, it was an accepting for responsibility. But it was hedged beautifully and elegantly. He's got good writers...sometimes.

If he had really meant it, he could have simply said "I told a joke that was designed to be hurtful and demeaning, and I didn't think it was a bad thing. That was a serious mistake and is indefensible. I apologize to the Governor, her family, and to all my viewers, my sponsors and the network. I've taken this as an abject lesson that my attempts at humor should never come at the cost of demeaning someone deliberately, and my writers have been told that any more such material is a firing offense. Again, my sincere apologizes: this is not why I am here."

Now that'd have been an apology. Dave didn't apologize. He made excuses.

Achieving Clarity...

This is an interesting article, presenting the views of a number of global warming advocates. I'd like not so much to fisk them, but let them speak for themselves so that you can better understand their goals.

According to the main thrust of the article, the global warming advocates are losing ground because they're being too ... scientific about the whole thing, failing to get their message across in a more convincing way.

That, right off the block, is interesting: it implies that their problem isn't with the message, but with how it is being presented. Their conviction that there is global warming and that man has caused it is apodictic: in other words, categorically true. This isn't scientific reasoning, this is nothing more than belief written with a capital B.


Why do I say this?

Because we've seen examples of fraud and outright dishonesty, plus travesties of the peer review process (within the global warming scientific community, peer reviewing ensures that no contrarians challenge the established orthodoxy which ensures a steady stream of funding and career financing) within the global warming advocates that call themselves scientists. Models that deliver the pre-determined results regardless of what data is entered (Mann Hockey-Stick); the use of extensive data cleansing to remove unwanted historical data ("We have to get rid of the Medieval Warming Period"); the outright hostility and refusal to cooperate with skeptics who simply want access to the data ("We have 25 or so years invested in the work. Why should I make the data available to you, when your aim is to try and find something wrong with it."); all in all, the proponents of anthropogenic global warming have been acting fairly reliably in a "fake but accurate" mode, reflecting the apodictic nature of their thinking (categorically true, even in the face of evidence that their conclusions are problematic).

Here's the infamous Mann himself on what needs to be done:

We must find ways to translate often technical and complex scientific findings for consumption by an audience unfamiliar with the basic tools and lexicon of science. Where the science has implications for public policy, which is true for many fields in the environmental sciences — including my own field of climate change — communicators must fight against the headwind of intentional disinformation efforts, typically fostered by special interest groups that judge themselves to be threatened by the implications of the scientific findings. The contrarian disinformation machine often employs charismatic, rhetorically talented advocates who deliver their messages of doubt and confusion in carefully measured and focus-group-tested aphorisms.

Note the technique: he does not address the issue at hand, but rather uses ad hominem arguments (that his opponents are intentional disinformers, fostered by special interest groups, even inventing a "contrarian disinformation machine" that ignores his own very real contributions to the problem: this is especially rich coming from the person who created the biggest lie in the anthropogenic warming industry.

Another contributor:

"Greenhouse gases" or "our deteriorating atmosphere"? "Carbon tax" or "pollution reduction fund"? Should scientists even deign to think about this type of sloganeering? Should they stoop to tactics employed by public relations firms and advertisers?

Of course they should.

Not, mind you, because of a deep-seated cynicism about the nature of civic discourse, and what that might mean about society's capacity to solve the world's most intractable environmental problems. Not because the majority of scientists rather alarmingly tend to think they are smarter than most, and thus more capable of successful public manipulation.

We should engage in sloganeering because the emerging scientific understanding of values, social norms, and behavior tells us we should.

Whenever you hear "scientific understanding of values, social norms and behavior", check that your guns are clean and that you've got enough ammo:  the last time science was this badly abused was under the various Soviet "scientific understanding of socialism" that pointed to the need for a new Soviet man, freed of bourgeois values and whose life would be guided by scientific principles.

This has nothing to do with science and everything to do with politics.

Oh What A Tangled Web...

This points to the next scandal: how the health industry will be driven into the ground in the name of equality and justice, that health care is a right and that those providing it need to get real and off their high horses.

Everyone's got a piece of the action already, even the reporters. Now the jousting begins, the elbows are being sharpened and the lines are being drawn.

The goose that lays the golden egg is unaware of how the victors - "Hey, I won" - are already deciding how it will be cooked. Fried or baked, boiled or grilled?

This isn't about providing health care to everyone: this has the classic signs of an organized plundering party. Pillage yes: let's leave the rape bit to Letterman.



The real joke, of course, is that we'll end up with a health care system more like Russia than Europe. The real joke is on the doctors and nurses, the health professionals whose years of training, whose years of sacrifice, will not be paid for when the system changes. They can't afford to be paid what they are worth, and hence the system will punish the workers who did the right thing in making their labor more valuable.

Isn't it ironic, don't you think?

Welcome To Chicago ... Redux

Just a brief note before the weekend.

Here are two links for what Chicago politics is all about.

It's all about the corrupt politician ensuring that his friends, whoever they may be, profit from him being in office. The quid pro quo isn't necessarily money (in the long run, it always is, though), but much more political power to make people.

Make in the sense of making them money so that they become part of the system. Make in the sense that they cross the threshold between political lobbying and corruption without thinking about it. Make in the sense that too many become part of the system, corrupting it in such a way that you have to burn the city down before it can be addressed.

Well, actually, that's how corruption in place like Chicago and San Francisco got started, by being able to allocate rebuilding monies. But that's another story for another day.


Welcome to Chicago-style politics wrote big. This is going to be one long legislative period: Congress will get involved, and we should all know what that means.

More pigs at the trough.


Welcome to Chicago, folks, where you can't do business without being sent, where who made you is more important than who you are or what you do, and if you're not made, then you're ... nobody.

If You're Wondering When The Recession Will Be Over...

...then you need to read this first.

Fundamentally, the recovery will be riding a very, very narrow and dangerous path: to get economic recovery, you have to get consumers, who now have to restart savings seriously, to spend their money, coupled with the willingness of banks, who are facing significant losses not yet realized, to lend money without demanding onerous interest rates.

It can be done. There will be a recovery.

But the policies of the Obama Administration - which will lead to higher interest rates, inflation and taxes - is not helping.

Why? Not merely because higher taxes and inflation will lead to, at the very best, stagnant real income growth, but more fundamentally, weak demand, coupled with higher taxes, will hit profitability: weak profit growth means that investments will weaken, reducing competitiveness and innovation at a time when these are needed...and this means that just at the time when folks are out there looking for work, there will be little hiring.


While there is light at the end of the tunnel, it's a lot, lot further off than most think. It's not that it isn't there: it's just that the Obama Administration appear to be doing its best to make it as distant as possible...

Another Candidate For Bankruptcy?

This is interesting, once again from the WSJ.

It seems that it wasn't only Wall Street that believed in ... creative accounting.

According to the article, the AFL-CIO is currently a candidate for insolvency. Also the SEIU.




Huh?

You read that right: the AFL-CIO, the American Federation of Labor and Congress of Industrial Organizations, the largest union in the US, has debt exceeding its assets, one of the critical signs of an impending bankruptcy (the other key indicator is when cash flow growth turns negative and profit margins disappear).

How did it get into this situation?

Well, first of all there's this:

In the mid-1990s, the AFL-CIO struck a deal with Household Bank to market the cards to union members in return for royalties. In the year ending June 30, 2008, the AFL-CIO earned $35 million from Household, about half the $74 million it collects in union dues. The deal has been a windfall for the union, but that may not last amid rising credit-card losses and flat consumer spending.

In other words: the AFL-CIO doesn't live from union dues, but rather through, basically, having sold their union member database to a credit card issuer who then tapped into the union membership via the "Union-Plus" credit card company. Hmmm: haven't the leadership and the unions generally attacked financial shenanigans that exploited workers?

But it's not just the AFL-CIO: the SEIU (Service Employees International Union) is also in trouble:

As for the SEIU, as recently as 2002 total SEIU liabilities were about $8 million. According to its 2008 disclosure form, the union owed more than $156 million, a 30% increase over the $120 million it owed in 2007. Its liabilities now equal more than 80% of its $189 million in assets. Net assets fell by nearly half last year, to $34 million, from $64 million in 2007. The debt includes an $80 million loan the SEIU took out in 2003 to purchase a new headquarters in downtown Washington, D.C. But the liabilities also stem from political spending, including at least $67 million last year on political and lobbying expenses, twice what it spent in 2007.

The SEIU added to its debt burden last year with $25 million in new bank loans, including $15 million from Amalgamated Bank of New York. Amalgamated is the nation's only union-owned bank and its chairman is Bruce Raynor, who until recently was also general president of Unite-Here. Mr. Raynor has been fighting for control of that textile-hotel union, and he helped Mr. Stern conduct a raid on Unite-Here members before bolting to the SEIU.

By the end of 2008, the SEIU also owed Bank of America nearly $88 million, including its headquarters loan and another $10 million for unspecified purposes. This is the same BofA that the union has spent the past months attacking as the face of Wall Street excess. The SEIU has protested outside of Bank of America offices and demanded the resignation of CEO Ken Lewis. We assume no one forced the SEIU to invest in real estate or borrow from a bank to finance it.

An SEIU spokeswoman says the union works on a four-year cycle, in which it goes "all out for the presidential election" and then rebuilds its finances. She adds the union has paid back more than $10 million of the $25 million it borrowed last year. But it's nonetheless true that the SEIU's liabilities have continued to climb each year from 2003 to 2008.

That last paragraph is the key quote.

What is bankrupt is not the merely the finances of the unions: it is the role of unions per se. They have mutated into no less than political party machines for the Democrats (and don't make me laugh by claiming that Republicans benefitted here), dedicated for that purpose only, willing, if need be, to face financial ruin in order to get Democratic candidates elected.

Hence here are the newest candidates for bankruptcy: the American union movement, betrayed by its "leaders" and now, through its very actions, responsible for getting tens of thousands of union members fired.

That's gonna be hard to sell to the rank and file. But since when did the unions in the US care about what the rank and file thought?

Forcing the unions into bankruptcy would be the healthiest thing that could happen to the US unions: they could once again become representatives of their workers, rather than the corrupt political hackeries that they are.

I Think That This Wraps Up The Problem In A Nutshell...

Regardless of your political affiliation, one thing you should expect from journalists is at least a modicum of objectivity.

I think that this quote shows how thoroughly rotten journalism has fundamentally become:

In February 2007, as NewsBusters.org noted, Thomas, an editor of Newsweek, declared: "Our job is to bash the president." But a Newsbusters item last week quotes Thomas as praising Obama to the skies, literally: "I mean in a way Obama's standing above the country, above--above the world, he's sort of God."

That from here in the WSJ.



If I were a subsriber, I'd cancel my subscription. I recently canceled my subscription to Spiegel in Germany because I simply got too tired of their rampant, constant anti-Americanism. They called to check out why, and I told them why: they claimed they weren't anti-American because they were so positive about Obama. I pointed out, gently, their blindness and hung up.

We need decent journalism. Too bad we simply don't have it.

Couldn't Happen To A Nicer Bunch...

One of the fundamental problems I have with a lot of management ... types is that the wrong people are in charge.


Look, lawyers and accountants have their role in business: the one keeps you from making mistakes in understanding the law and what you can and cannot do, the other lets you know what your resources are and what you can do with them.

The problem arises when lawyers and accountants take control: they are, generally speaking, only qualified to provide support services, not generate value added. To do that you need talented folks who can take an idea, make it into a product and get it out there to the customers in such a way that they are seriously pleased with products and services.

Hence this article in the New York Times pleases me.

As the apocalypse on Wall Street ripples out into the larger economy, a thick red tide is lapping at the once-impregnable foundations of New York's corporate law firms, threatening to turn the industry — and with it, some iconic city characters — into an endangered species.

Well, yes: they are a support services industry, and when their clients go tits up, they should be immune?

Actually, it's true; the corporate law firms of the past years are an endangered species, and rightfully so. They provide no value added in todays' economy, and hence: good riddance.

"I hear the stories all the time," Mr. Kowalski, the consultant, said. "Real estate lawyers are honing their skills playing solitaire. Younger lawyers are gossiping all day and scaring the crap out of one another. The head of the corporate department of a major firm just told me that he hasn't billed a minute's worth of work in the last two weeks," he added.

Duh: to reiterate, corporate law companies need functioning corporations to bill, and seem to have realized this first now?

Philip K. Howard, a senior partner at Covington & Burling, another multinational firm, may be the closest thing to a gentleman lawyer that one is likely to find these days. He is courtly, white-haired, civic-minded and blessed with an aristocratic pair of arching eyebrows. While he declined to speak directly about White & Case ("I'm not really interested in the business of the law"), he touched on the firm's current troubles by suggesting that as the bottom line increases in importance, the traditional role of the lawyer as a trusted counselor slips away.

"To the extent that lawyers are simply churning out the same problems one after the other and are treated as factors of production to be laid off or not because of market forces or marginal declines in profitability," he said, "the emotional and professional commitment that goes along with being an adviser and a solver of problems begins to diminish."

Again: duh.

I daresay that that the "traditional role of the lawyer as a trusted counselor" lies largely in the imagination of lawyers to justify expensive relationships that added nothing to the bottom line of the companies being "advised".

The classic New York law firm is a highly developed ecosystem populated by certain native species: there is the brash, aggressive partner leveraged by lifestyle and, rising from below, like a creature out of Darwin, the ambitious associate who pulls all-nighters doing scut work in hopes of one day taking the chair.

But the natural order of this world has been set on end by the economic crisis and the possible disappearance of fixtures like the pyramid system (under which associates are thrown en masse at certain cases, fattening the fees), and the billable hour itself (increasingly replaced by flat rates or retainers in a client's market). The tectonic plates have begun to shift in a nauseating manner, bringing fear, ambiguity and psychological scars.

As I've said before: parasites, not creators of value. The highly-developed "ecosystem" was nothing more that providing services: given the nature of the problem, such value-destroying functions like throwing lawyers at problems in order to fatten the fees and the serious problems associated with calculating fees based on billable hours (which the client rarely can control), the collapse of this system, which generated a lot of income, should come as no surprise. After all, a lawyer's income is someone else's cost, and the system has, fundamentally, been abusive...

I hope that there are scars: otherwise, there won't be reminders that those days are over.

"For the first time in their lives, people feel sort of useless. All of a sudden, you can go to lunch for two and a half hours and really not be missed. It's a blow to the ego. You're talking about people who have never really failed."

At White & Case, the tensions have become so fierce that some people now fear staying home even if they are sick. Market forces have replaced "the social contract," a top partner there said: camaraderie is "not terribly strong," because "people are very scared."

"When you finally make the partnership, you can walk into a room and certain assumptions travel with you: This is someone who knows what they are doing, who has intelligence and authority," the partner said. "While that's still basically the case, it was a much more collegial place when I first got to the firm. Now it's colder.

"The loyalty of the institution to its people, and vice versa, isn't really there anymore — it's a different animal from what a lot of us were used to. It's much more of a business now and less of a true partnership. The problem is we're supposed to all be in this together. But at some point, you stop and think: 'Well, maybe we're not.' "

In other words, for the first time, lawyers find themselves unable to pretend that they were the ones who created value: they are not. Failure here should be viewed as a wake-up call for the profession. Welcome to the Real World.

If you want collegiality, go to academics. If you want money, welcome to reality.

Ecological Stupidity and The Costs...

This is an example of how ecological requirements can not only be rather silly, but can do serious damage to the economy.

The original article is in the Handelsblatt from today, but behind their firewall (at least I couldn't find it online).

Basically, the story has to do with lead and cadmium: both are heavy metals and are due to be phased out of usage in Germany due to ecological requirements.

Of course, the glass industry has a few problems there: adding lead to glass is necessary to work with the refractive index of glass: if you add lead oxide to potassium silicate glass in varying amounts, you get glass with different refractive indices, which allows you to design lenses for the optical industry that perform very strongly. Lead flouroborate glass, doped with rare earths, is used in lasers and their optics.

Cadmium is used for coatings and for filters: adding cadmium to other materials changes the light color when light reflects or is passed through such glass or coatings.

Hence requiring that lead no longer be used in glass means ... ceasing to produce those materials.

Now, the German optical industry, directly and indirectly, employs over 100 000 people. Roughly 1/8th of all industrial activity in Germany is tied in with this industry.

The German glass industry expects that they will be able to get an exemption from this requirement: they can only get one if neither lead nor cadmium can be replaced with other materials or with other technologies.

But not a word about the economics of such a replacement. The only concern is the ecological impact: if an alternative, due to intensive energy use, would lead to more lead being emitted by coal power plants than would be saved by not using lead in production, then the ecological folks will issue such an exemption: otherwise, none.


Basically, there are alternatives (fluoride and other metals), but using these leads to other problems that are just as difficult to solve.

The absurdity of the whole thing?



Once in the glass, these elements are bound to the glass more or less permanently, i.e. they cannot endanger the environment in any meaningful way. Worker safety considerations already control how lead and other heavy metals are handled during the production process: this is not the problem here.

The problem is introducing a requirement not to use a material because it could endanger the environment, even though the material in question cannot release those materials into the environment.

That is ecological stupidity. Or, more exactly, the stupidity of those formulating ecological policy with absolutely no consideration to the real world.

The costs? Simple: if the industry is told that using lead and cadmium are not permitted, then the industry will disappear. There are no meaningful alternatives to lead and cadmium right now, and while one manufacturer has brought out the first glass produced without heavy metals, it is a glass ceramic and cannot be used in the optics industry.


What will happen is that the industry will simply move elsewhere. More exactly, the industry elsewhere will pick up the demand that is currently being serviced in Germany.

All for the sake of the environment, even though the environment isn't endangered by the lead and cadmium in optical glass.


The costs? Apparently the ecologists simply don't care.

Goodbye to Leica, goodbye to Zeiss, goodbye to Schneider-Kreuznach and goodbye to 100 000 jobs in the rest of the industry.

Improvement to the environment?



None.

If it wasn't so tragic, that'd be priceless...

Further Data Points For The Trend VII...

I've been away for a week, but it just keeps on getting better...

Look at this here.

All those stimulus visits?

Well, not quite all, but the vast majority: to States Obama won.

In other words, it's Chicago politics at its best: those that voted for President Obama will get the benefits, those that didn't won't. Classic attempt to build up safe havens for his party.

We got rid of this back in the 1970s that last time the Democrats tried this. It's time to do that again...

Now the State Department is Involved...Because of Obama Administration Incompetence

So, to follow up on the last post: according to the Times, Secretary of State Clinton is now getting involved:

Hillary Clinton has intervened in talks over the future of Opel and Vauxhall at the request of German ministers as the American Government unveiled plans to sink more taxpayers' funds into the European carmakers' US parent, General Motors (GM).

Frank-Walter Steinmeier, the German Finance Minister, spoke by telephone today with Mrs Clinton to seek "support in the search for a solution," his spokesman said. Mrs Clinton pledged to intervene to demand "the greatest possible American support" from Timothy Geithner, the Treasury Secretary, the spokesman added.

Karl-Theodor zu Guttenberg, the Economics Minister, also denounced the US Treasury for dispatching a junior official who had to consult Washington through a video link at regular intervals during the night.

Mr Guttenberg said the talks had been "absurd in parts" and demanded "more seriousness and a greater willingness to compromise on the part of the US."

...

Overnight negotiations over the future of the US carmaker's European operation broke down when GM sought more funding for Opel despite Germany's pledge to provide billions of euros in state guarantees as well as a €1.5 billion bridging loan.

Now, perhaps, you can understand the incompetence of the Obama Administation. Of course, La Clinton can't actually get involved: she can only try to use her good offices to get Geithner to actually pay attention.


Ye Gods.

More Details...

In today's Handelsblatt there are some more details on how the Obama Administration has managed to really annoy the Germans.

Opel, with around 50 000 jobs in Germany, has to be purchased from GM by whomever before GM declares Chapter 11, because once GM does that, Opel can't be sold until GM comes out of Chapter 11 or until the bankruptcy court allows the sale.

Hence the German government wanted to work out a deal with the folks interested in acquiring Opel, basically Fiat, Magna and RHJ.

Let's capture a couple of the facts - facts, not speculation - about what went down.

First of all, on Wednesday PM, the German Chancellor (Angela Merkel), the Vice Chancellor, the German equivalent of Treasury (Finanzminister), the Economics Minister, along with their staffs, met in the offices of the Chancellor in Berlin,, along with folks from Fiat, Magna and RHJ, a financial investor. They were then joined by the representatives of GM and the American government.

Who did the Americans send? GM sent Carl-Peter Forster, GM's European Manager (indeed, GM isn't just looking to sell Opel, but its entire European division), along with staff members. The Obama Administration sent ... an unnamed investment banker from Rothschild.


I am not kidding: the US Treasury Department couldn't be bothered to actually send someone capable of signing anything, despite the fact that they are directly involved in the decision whether or not to sell Opel, since they are the only ones who can provide any sort of state guarantees that investors are looking for in these troubled times. To underscore the importance of having the right folks together, the German equivalent of the US Treasury, the Finanzministerium, has been pressuring Treasury to send a representative who can make the decision to close the deal. Peer Steinbrück has requested this directly from Tim Geithner: instead, an unnamed investment banker from Rothschild has been sent as an observer.

In other words, the lack of proper staff at Treasury - which remains a serious problem - has now led to a diplomatic faux pas. If you want something from someone, you don't send an underling to simply be an observer: you send someone who can make a decision so that you can get what you want. If you don't do that, you are sending the clear and unmistakeable message that you simply don't care.

To make things worse, since the unnamed investment banker from Rothschild does not have a portfolio from Treasury - in other words, he cannot make any decisions for the US government - he is not permitted to be part of the discussions between the German government, GM, Opel and the investors.

As Forster tells the German government that the price just went up by $500mn, the Germans are pissed off (rightly so, I might add): when the Germans finally get John Blum on the telephone to talk about at least some sort of government guarantee that the money will be paid back, he can't help them.

The Germans, are, at this point, speechless. They're supposed to send an additional $500mn within 2 (yes, that's two) days to GM in Detroit, immediately before bankruptcy, with no guarantees that they will ever see the money again?


Well, apparently the Obama Administration thinks the Germans are idiots.


The Germans then talk to both Fiat and Magna. Fiat sticks with its offer: Magna is willing to pay the additional $500mn, but only if the German state guarantees that the money will be paid back if GM enters bankruptcy. RHJ is now out of the running, since they are only willing to guarantee that two factories will continue to run if they take over Opel, which gets them tossed out.


Germans love to have things planned: the original idea was that the investors and the German government work out their deals, then the German government works out a deal with GM and the US government; then the investors and GM, with the blessings of the German government, works out their deals, papers are signed, and then the publicity folks do their thing.

Instead, chaos.


The Obama Administration, according to one person involved, sent, at best, backbenchers to the game. Those sent to represent the US were folks who appeared to have heard first about Opel while flying over.

The Germans are seriously pissed. Basically, the German government spent an entire night trying to work out a deal, trying to save 50 000 jobs, and the US government couldn't be bothered to even send a proper representative, even though they are directly involved in the deal. The Germans were prepared and organized; the potential buyers were there and were organized, ready to cut a deal; the representatives of GM were there, organized and ready to cut a deal; the Obama Administration, via the Treasury, couldn't be bothered.


Today the German government is trying to work out yet another deal. Chances that they will are, basically, null: as of the time of writing this, Fiat has withdrawn from discussion, Magna is trying to work out a deal, but increasignly it appears that GM, at the end of the day, is unwilling to sell Opel, despite having agreed to do so before this whole circus started.


The worst that has come of this is the deliberate incompetence of the US Treasury, who, despite repeated requests from the German government to send someone who could make a decision, sent a simple observer. This isn't about a diplomatic affront: the real problem lies in the increasing apparent incompetence of the US Treasury.


This will have repercussions. Perhaps not directly, perhaps not immediately, perhaps not visibly. But the sheer incompetence of the Obama Administration is bungling this is breathtaking.


But, apparently, the Obama Administration can't be bothered.

How To Annoy Germans...

Here's a quick list of how to annoy Germans, especially Germans you want to have buy something from you.

1) At the very last moment, come up with new numbers that raises the price significantly, and pretend like it's no big thing.

2) When your Germans express annoyance, feign astonishment that anyone would react that way.

3) When the Germans have their own plans and interests, become angry and blame them for screwing everything up.


These are the lessons learned from the talks that the Treasury held with the German government yesterday on how to separate Opel from GM.




The Germans are now seeing the face of Chicago politics: that wasn't supposed to be a meeting to work out how the deal was going to go down, that was supposed to be a meeting where the Germans rolled over and begged for mercy. The Germans thought they had been informed and that they had parameters within which they could work out a deal that they could live with: they're partially in a state of shock that anyone would seriously use such tactics at such a late stage in the game.

It is going to be as much a learning experience for the Chicago Gang that the rest of the world isn't Chicago, as it was for the Germans to finally meet up with some real Chicago politicians. Opel is now pretty much doomed, unless, of course, the Germans come up with a deal that is acceptable to the Obama Administration: if GM enters Chapter 11 before that happens, then Opel is, to use the Chicago vernacular, truly fucked.

And here's a word to the Obama Administration: Germans aren't dumb. They don't pull their weight internationally because they don't want to. They know the world is a dangerous place and are experts in avoiding conflicts, avoiding having to take a stance and join a side, because it is opportune to do so and German politicians are, if anything, opportunists. Give them a way out and they will take it; give them a way to posture without making any commitments - like being the 20th country to condemn something - and they will spend a day in the Bundestag giving speeches about how something or other is terrible, but not their fault.

But this? This was gratuitous and completely unnecessary, as far as the Germans are concerned. We are seeing how the Obama Administration works: welcome to Chicago.

Further Data Points For The Trend VI ...

First of all, we now see President Obama's Supreme Court nominee, chosen for her gender, ethnicity and, perhaps most importantly, a certain ... contempt for the law.

Put simply, President Obama appears to be espousing the view that personal experience and cultural identity are the key factors in judicial wisdom. Law shouldn't be, as the WSJ puts it, a voyage of personal identity, but rather based on a more fundamental understanding of what laws are and why we have them.

Here is the key quote to understanding what is at stake:

She is a judge steeped in the legal school of identity politics. This is not the same as taking justifiable pride in being the first Puerto Rican-American nominated to the Court, as both she and the President did yesterday. Her personal and family stories are admirable. Italian-Americans also swelled at the achievement of Justice Antonin Scalia, as Jewish-Americans did at the nomination of Benjamin Cardozo.

But these men saw themselves as judges first and ethnic representatives second. Judge Sotomayor's belief is that a "Latina woman" is by definition a superior judge to a "white male" because she has had more "richness" in her struggle. The danger inherent in this judicial view is that the law isn't what the Constitution says but whatever the judge in the "richness" of her experience comes to believe it should be.

In other words, this judicial view means that the judge is free to interpret the laws however she wants to, rather than what the law actually says: this way lies madness.

Not that she won't be approved, as the WSJ notices: she'd have to really screw up not to be. But what I fear is not so much that the Supreme Court will then start to turn to the left, but more importantly that the Supreme Court will start to "change", especially if she brings her contentious practices to the court that is expected to be sober and proper: what I fear is that the Supreme Court will, because of internal squabbling, become ineffective, which would have the effect of removing the final check on the Obama Administration. If the Supreme Court's functioning is damaged, if the Supreme Court is distracted because its newest member doesn't play the game, then it will not be able to pass judgment: that is the real danger.

Also in the WSJ is this, that the Gods of the Copybook Headings are waking up. The stupidity of trying to refinance loans for people who have no business have the loans in the first place is typical of Democrats: having dug themselves the hole of sub-primes, they are amazed that there really is no way that these people can ever pay back their loans, let alone service the interest rates: the default rate of refinanced sub-prime loans is between 65% and 75%. Duh: this has never, ever been anything but politics, and politicians who push this sort of idiocy through deserve the reaction that will come to drive them out of office. This is literally tantamount to calling for explosives to dig deeper when the hole is already so deep that no one can come out, and then being surprised when the detonation maims everyone down there doing the digging. Idiots.

Now, let's take a look at GM and Chrysler, their dealers, and how the decision is being made which dealers to close. In many ways I agree with this: the dealers aren't nearly to blame as much as GM/Chrysler and local politicians who made sure that the laws were set up to make sure that dealers couldn't be closed. No dealer can survive if no one wants to buy the cars (and that is the fundamental problem of both GM and Chrysler!). Hence the "slash & burn" closings round won't bring the solution to the problem: it will, however, leave a much smaller network of dealers that will, in many cases, have monopoly status when restructuring completes.

But how are the dealers being chosen? Duh: we're talking Chicago politics here, and the answer is that they are apparently being chosen based on the political contributions. Not a single dealership is being closed that gave Obama campaign financing money, and all the closed dealerships either gave to Republicans or to Obama's opponents. See here and here for the rest of the story. Hence the goal here is not to "save" GM and Chrysler, but more fundamentally to close down those who financially opposed Obama. As one commenter put it: if the surviving dealers were largely Republican spenders, then Team Obama would be idiots; if the surviving dealers are Democratic spenders, then Team Obama are marxist idiots.

I'd replace "marxist" with "left-wing", but the sentiment remains the same




The inmates are in charge of the asylum...

Understanding Where We Are Headed...

Economists lately have, to a large extent deservedly, been given a bum rap: there were few that saw the problems coming, and of those few that saw it, even fewer listened.

Here is a a commentary in the FT that shows that despite all this, there are those who do see the light whilst many colleagues remain firmly committed to business as usual, which is exactly the wrong thing to be doing.

These are the facts:

Under President Barack Obama's budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America's ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.

Let me reiterate: these are the facts, not opinions: ignore this development at your peril. No country - none, zilch, nada, keine - which has taken on severe debt levels for discretionary spending has survived. There is only one half-exception, Japan, where the government continues to fiddle while the Japanese Rome burns, but they are already strait-jacketed by government finances.

Discretionary spending is money spent on things that are nice to have, but not necessary: countries get into this kind of debt when they fight wars, when massive national disasters hit, but not to fund political babble and wishful thinking.

It's the job of economists to be dismal, to pour ice-cold water over overheated politicians and pundits.

John Tayler, the economics professor who writes these words, points out that there are really only two ways out of the debt: massive and punitive increases in taxes that would necessarily have to include not merely the rich, but most importantly the middle class and the working poor. These are not taxes to pay for health care (which could be offset by reductions in private insurance), but rather to pay for the debt.

The other alternative is inflation, i.e. making money worth less and less.

Done deliberately, this has devestatiing effects on currency values, as the currency will devalue to compensate for inflation. This is how economies work and cannot be avoided: devalue your currency massively, as would need to be the case, and you screw anyone who has every invested in your country. Really want to burn China and Japan for having invested in the US? Eliminate the people who are happiest buying US debt because it is the safest investment in the world?

But rather than facing up to facts, the economic illiterates - actually, they're not so much economically illiterate as actively economic denialists - that have power in Washington are already heavily invested in making excuses instead of changing policies that will clearly damage the US economy.

To put it bluntly:

The time for such excuses is over. They paint a picture of a government that is not working, one that creates risks rather than reduces them. Good government should be a nonpartisan issue. I have written that government actions and interventions in the past several years caused, prolonged and worsened the financial crisis. The problem is that policy is getting worse not better. Top government officials, including the heads of the US Treasury, the Fed, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission are calling for the creation of a powerful systemic risk regulator to reign in systemic risk in the private sector. But their government is now the most serious source of systemic risk.

Straight words, accurate, but if anything they will fall on the ears of Democrats who have put their fingers in their ears and are loudly crying "la la la I can't hear you la la la".

Which may be amusing to their political supporters.


But which is a disaster for the rest of us.

The only light at the end of the tunnel right now is that the Democrats will not be able to blame anyone for this in 2012. They have both the executive and legislative levers of power, and what they do must be clearly placed at their feet. Not that they won't try to deny, and will have their friends in the media support them.

Doesn't change the reality of the situation: we are on a very dangerous road, one that will take great skill to transcend.





Which is clearly and transparently missing in Washington today.

The Most Egregious Error Imaginable...

An editorial in Sunday's FT points to the fundamental error that will destroy the Obama Administration and put it clearly into the field of "failed Presidents", or at least those who don't enjoy much good press.

Bluntly, the real problem with the running up of the debt that the Obama Administration and the Democratic Congress is not that it will take decades to repay, putting a clear financial cost of future generations, but rather that those in the White House and Congress are playing with something so fundamental that only a complete fool and total idiot would mess with: US credibility as a financial safe haven.

To quote:

The US has long exploited its position as the supplier of the world's reserve currency, running up enormous debts which no other government could sustain. But there may be a limit to what even the US can get away with....Indeed, the US debt stock is higher and its deficits will remain larger for longer. Owing to the strictures of the US political system, the executive will find it harder to ram through any kind of emergency fiscal retrenchment. It is not obvious from the bond markets, where prices do not indicate the fear of runaway inflation. But be warned: currency traders are pricing in the tail risk that the US will be forced to resort to the printing press.

In other words, this isn't something that might happen, something that policy makers will have to consider, something that will impact decision making in the future, but rather something that is already happening. Do you understand this? The market, in all its ruthlessness and uncaring precision, has already decided that things are going downhill from here: if the US currency takes a nose dive - as it is being pushed to by the policies of the Obama Administration, either deliberate or via folly - this will have a massively negative effect on the position of the US dollar as safe haven. Up to now, no US administration would even contemplate changing this.

Playing with the creditworthiness of the US is plain flat-out stupidity. The Obama Administration seems to have plenty of that.

But it's worse than that: it looks like the Obama promise, of change, is turning out to be radically different than anyone who voted for them ever thought. It's going to be change for the worse, not the better. No one outside of the financial community knows what it means if the US were to throw away its financial rating in the name of some half-assed policy - per definitio, anything that would negatively impact the US financial rating is a bad policy.

Change here will be devastating and will lead to a new world order, one that is clearly not in the interests of the US.



But the Obama Administration either doesn't seem to care, or, even worse, seems to think that this is just fine.

One further step on the road to perdition. This is not speculation: if currency traders are pricing in this risk, it is because they see it happening. Lose the currency traders and you lose the currency. Period.

Watch to see who profits from this and who they supported before the election and thereafter: this is YADP (Yet Another Data Point)...

It's No Wonder...

...that this woman is being attacked. See the article here in the FT.

Dambisa Moyo is the wet dream of any NGO, but one who has turned into a nightmare for them. She could easily be a leading figure in the western aid business, given her degrees from Oxford and Harvard, her work at Goldman Sachs and the fact that she is black and from Zambia.

Instead she has written a book called Dead Aid, a deliberate play on the LiveAid campaign of Bob Geldorf, and she is calling not for an increase in aid to Africa, but rather its end.


And she's right: western aid has turned out to be the cause of most of the corruption in Africa, since the sheer volume overwhelms and makes it easy for the modestly corrupt to become severely so. Her story is that aid has ruined Africa, and she's right.

Which is why she is now being vilified by activists, who are increasingly desperate as aid budgets are being cut in the wake of not only her relevations, but also financial crisis. She is being dismissed as simplistic and dangerous.


As if the parasites of western aid, the NGOs, aren't the ones who are simplistic and dangerous.

The aid establishment, the gaggle of NGOs that live off of despair, hunger and chaos, are scared to death that African intellectuals will tear them apart. This could be a new start for Africa: how much do you want to bet that the neo-neo-colonialists of the supranationals, the transnationals and the NGOs will work their very hardest to stop this from happening? This is the best thing that could happen to Africa: let the African intellectuals of her calibre and quality have their voices instead of the parasites from the NGOs and the transnationalist community.