Thursday, January 29, 2009

Conservation Update

No "Marxist dogma", just some developments in the world of conservation:

The US Senate passed the Great Cats and Rare Canids Act in September which is intended to protect increasingly vulnerable predators by provided financial aid to projects conserving such species as lions, leopards, jaguars and African wild dogs.  The fund will be managed by the US Fish and Wildlife Service.  The bill was passed by the House after a considerable outpouring of public support.

Scientists flying over the Chukchi Sea in August as part of a survey for oil exploration observed nine bears swimming far from shore.  One bear was swimming sixty miles out. Although strong swimmers, bears do drown as a result of exhaustion or starvation.  The loss of ice cap is forcing them to forage for food over greater distances.  Satellite data showed the ice pack this summer at the second lowest extent on record set in 2005.

Indonesia has agreed to expand the Tesso Nilo National Park created in 2004 from 94,000 acres to 200,000 acres (81,000 hectares).  Sumatra's rainforests are being destroyed by unsustainable logging. The Tesso Nilo region has incredibly high plant diversity and is one of the last remaining blocks of rainforest large enough to support endangered Sumatran elephants and tigers.  Ten individual Sumatran tigers have been spotted in the park.  

Russia has created three national parks in the Far East to protect wild Amur tiger populations.  The parks, the first to be designated such as opposed to the restricted zapovedniks, cover almost a million and half acres (607,000 hectares).  In 1940 there were only about 40 Amur tigers in the wild, today there are around 400 because of conservation efforts. However, tigers are at a tipping point in the wild. India's tiger population has dwindled to 1400 due to habitat loss and poaching by organized crime syndicates.  Tigers occupy less than 7% of their former range.  Conservationists estimate only 4,000 remain in the wild.   These magnificent felines face a very uncertain future unless drastic measures are taken to wipe out the despicable trade in tiger parts, and establish large enough protected areas for the big cats to breed successfully.

Florida is the home of the only big feline more threatened with extinction than the tiger.  The Florida panther is making its last stand in the southern tip of the state where the last breeding population exists.  The cougar was found throughout the deep south at one time.  Today, only an estimated 100 animals remain in the wild.  In 2007, fifteen panthers were tragically killed by autos.  These beautiful felines do not deserve being treated as mere "road kill". 
source: WWF, Defenders of Wildlife

Wednesday, January 28, 2009

Le Shorter: The High Price of Guns

The Supreme Court apparently believes we are still a frontier society, because it decided the Second Amendment guarantees our personal firearms will not be taken away by the state.  Except that most of us do our food gathering at supermarkets nowadays, and the state militia gets paid vacations. Americans pay a high price for the right to bear arms. Stumptown is still in shock a week after an emotionally disturbed young man shot up a line of teenagers standing outside a local nightspot waiting to get in.  Because he was able to purchase a semiautomatic 9mm pistol--he told the gun shop we wanted to learn how to shoot and provided the required documents--the shooter was able to kill two teens and wound five before killing himself with a shot to his head. The father of an Italian exchange student traveled here to be at his critically wounded daughter's bedside. He told his daughter's bewildered American host, "I feel so sorry for you."  That says it all.

correction:  the fatally injured foreign student was a Peruvian national.

Another Free Radical Idea

The mantra in Washington is spend, spend, spend to prevent further contraction of the economy and the much feared possibility of another depression.  Politicians are so frantic that any kind of crazed spending program is getting a second look.  The biggest squanderer of taxpayer money inside the beltway is now being touted in the Wall Street Journal as a job creator: the Pentagon.  A Harvard economist has suggested giving the five sided black hole another $30 billion to spend on weapons programs for the purpose of generating 300,000 new jobs.   There are a least a couple of problems with that idea.  First, modern weapon programs have incredibly high overheads and very long lead times.   Any jobs created by additional Pentagon spending would not be immediate ones.  Even if the USAF were allowed to buy 60 more F-22s for $11 billion, production work could not start until 2010 given procurement regulations and lead times for supplying specialized materials. A big chunk of $11 billion would go for contract overhead without creating a single new production job.   Extending the completed production run of F-22s would probably only save existing highly skilled jobs, not create needed entry level ones.  Secondly, more appropriations would end up enriching defense firms that already have contracts to produce new weapons like the F-35 Joint Strike Fighter.   Lockheed Martin is testing that aircraft, and is running into the usual development problems. Throwing more money into producing systems that are not even proven is simply wasteful, not a job program.  Thirdly, the same amount of money spent in the civilian sector would create more jobs, faster.  Spending $1 billion on public transit would generate 19,795 jobs compared to 8,555 at DoD.  Spending $1 billion in education would generate 17,687 jobs[1].  So here is the radical idea: cut wasteful defense spending to the bone. Eliminate or curtail all Pentagon weapon system programs not needed to fight the low tech war in Afghanistan.  The money saved could then be spent on recreating the Civilian Conservation Corps and the Works Project Administration, two of FDR's most successful programs intended to re-inflate a depressed economy.  The time has come to end the permanent war economy that has brought us to these dire straits.  And you heard it here first.
[1] Winslow Wheeler,

Monday, January 26, 2009

Pushing a Wet Noodle & Other Quandaries

For those readers who are not au fait with economic theory, presented for your consideration is a simple arithmetic equation:  M x V = GDP  where M is the money supply, V is the velocity of money or the rate a given supply turns over, and GDP is a nation's nominal gross domestic product.  Much in the news lately is the Federal Reserve and Treasury efforts to increase M in various ways including buying up worthless assets of failing financial institutions (the TARP program) and giving taxpayers a $500 tax rebate.  President Obama has called on Congress this week to infuse the economy with one trillion more fiat dollars. But as in all mathematical relationships the other variables also affect the result.  In the case at hand V, velocity, is causing economists to scratch their heads.

According to monetarist guru, Milton Friedman, the money stock decreased by an astounding 31% during the first Great Depression and the turnover of that stock fell by 21%.  As a result, the national economy as measured by GDP shrank by approximately 50%.  In his seminal work, Monetary History of the United States, Friedman suggested that if the government under Hoover had not allowed the money supply to shrink (by cutting the federal budget and raising taxes), the worse dislocations of the Depression might have been avoided.  Federal Reserve Chairman Ben Bernanke, a student of the era, is following the monetarist prescription proposed by Friedman: greatly increasing the money supply, M, to keep the economy from contracting too severely.  This policy is not a "slam dunk", since our economy is boldly going where no other has gone before [photo]. Unlike the previous Great Depression there is an enormous pile of bad debt--all kinds of debt, not just mortgages--in our midst and it is clogging up the economic pipes.  In analytic terms, V is declining.  Another prominent economist, Irving Fisher, studied the effects of debt deflation in 1929-33, and in the smaller depressions of 1837 and 1873.  Fisher and other economists* realized the effects of excessive debt can overwhelm economic variables.  The deflationary effects of excessive indebtedness can become so pernicious in destroying wealth that fiscal and monetary policy cannot spur economic growth because velocity--the rate at which money is spent--declines.  Government, despite enormous outlays of money, is left pushing  a wet noodle.  The debt level in the US is unprecedented.  In the third quarter of 2008 total debt reached 358% of GDP. A lot of debt is bad--improperly loaned or financed.  This means the likelihood of repayment is low, so lenders are loath to finance new customers who are already in debt.  Some market experts believe that any monetary policy is only as good as its ability to stimulate a new cycle of borrowing and lending. In the forth quarter velocity plummeted, offsetting the increase in money supply.  In short, everybody is playing Texas hold 'em.

You may dimly remember your freshman college macro-economics, if only because the textbook was so heavy.  But you do seem to recall that if the government prints a lot of money that leads to price inflation which can in the extreme case lead to currency devaluation.  Right you are, Ridley!  The government is pushing our national balance sheet farther and farther into the red by creating more fiat dollars.  So why is the US $ in a bull market against other world currencies?  The answer lies in Bretton Woods.  The United States, thanks to geography, a technologically advanced military, and a massive industrial base, emerged from the second world conflagration solvent and in tact.  In 1971, after Nixon took the country off the gold standard, the US dollar became the world's reserve currency. This means other countries keep their money reserves in dollars.  The essence of our age, oil, is internationally traded in dollars. More importantly, no other currency is presently capable of replacing the dollar as the world's reserve currency.   So the US can go deep into the red without the ill effects experienced by smaller economies such as Iceland.   Some commentators suggest that gold could return as the world's standard if the dollar is too severely devalued.  Every central bank in the world carries gold on their balance sheets as a reserve asset.  Gold is money, a global currency, that can be freely traded unencumbered by sovereign debt and prior obligations according to Royal Bank of Canada.  But the dirty secret is that the price of gold is manipulated by--wait for it--the Federal Reserve which obviously has a supreme interest in maintaining the dollar's privileged position in the world economy.  Keep those presses rolling, Rawhide!
*Minsky, Kindleberger, Kondratieff, and Schumpeter
[photo credit: AP]

Thursday, January 22, 2009

Alberta Wipes Out Song Birds

A study co-sponsored by NRDC and Pembina Institute, a Canadian non-profit research organization, reports that Alberta's tar mining is destroying the boreal forest which supports at least 292 species of breeding birds. "Danger in the Nursery" says that exploitation of the world's largest oil deposit outside of Saudi Arabia could claim more than 160 million birds that live in Canada's northern forests.  Site preparation drains lakes, diverts streams and rivers, clear cuts forests, and denudes the earth of vegetation.  Huge hydraulic shovels and trucks are used to dig as deep as 100 meters to recover bitumen.  Resources too deep to recover by strip mining are extracted using drilling and melting techniques requiring a dense industrial infrastructure that is even more destructive of 
wild habitat.  What few natural features remain in the mining area are polluted perhaps beyond reclamation.  In April of last year about 500 ducks died after landing on a tailings pond near an operation in Alberta.  Of course the wholesale destruction would not be occurring except for an insatiable market for oil to the south.  Processing bitumen--a sludge mixed with sand, clay and water--generates three times the greenhouse gas emissions than a barrel of conventional oil. This kind of rape of our planet just does not make sense for our own survival.  
r: endangered whooping crane whose migration route crosses the tar sands region [AP photo]
l: olive sided flycatcher

Wednesday, January 21, 2009

43 Slips One Past

President Obama put an administrative hold on the Charlatan's midnight ink pending an administrative review of new regulations by his appointees.  But one important change that weakened the Endangered Species Act, was made final before Obama took office.  Bush 43 made sure that the change which eliminates the requirement for consultation with federal experts before federal projects affecting habitat are approved, was made final by rounding up 15 experts in Washington in October to review 250,000 written public comments in just 32 hours. The consultation process had been in place for 35 years, but was viewed as bureaucratic red tape by environmental protection critics.  The rule changes also prohibit federal agencies from considering a project's effect on endangered species and their habitats by increased global warming.  Obama has said he would work to reverse the changes.  Just one more item on his to do list.

Le Shorter: Another Bank Hits Bottom

The Bank of Scotland announced the biggest loss in British corporate history on Monday.  The bank said it expected to suffer a lost of L28 billion after writing off toxic assets and reducing the value of acquisitions.  The size of the loss shook bank stocks and increased fears that the Scottish bank would be totally nationalized.

Tuesday, January 20, 2009

America, the Sick

Barack Obama 2003:  "I happen to be a proponent of a single-payer health care program...we may not get there immediately.   Because first we have to take back the White House; we have to take back the Senate; we have to take back the House."

Senate Finance Chair Max Bacus (D-MT) 2008: "Everything is on the table....The only thing that is not on the table is a single-payer system.  That's going nowhere in this country." 

You now know by now that America's health care system is broken, much like its auto industry. Yet the Washington elite refuse to adopt the health care system common in peer nations.  America has a lower life expectancy, higher infant mortality,  and higher rates of mental illness than countries with universal health care programs.  Yet Americans spent $2.4 trillion on health care in 2008, more than any other nation.   Politicians talk about "reform" but insist on market based solutions that are not necessarily the answer to every social problem.  For one, the demand for health is very inelastic.  Political demagoguery aside, polls show that a plurality of Americans are ready to accept what is generally referred to as "socialized medicine"[1].  Our political leaders' narrow-minded intransigence is due to several wholly subjective factors: a zealous ideological commitment to capitalism, faith in technological elaboration, and the potent political influence of what earlier populists called "the money power".  

Markets are created to produce profit and the more a market grows the more profit is made. Private health care and health insurance is a big market.  At least one-fifth of our economy will be devoted to health care by 2017[2] and most of that money will be spent on technological elaboration, not basic or preventive care of citizens. The health industry is growing without meeting the needs of an increasing number of citizens who are simply left out.  A great deal of cost goes into deciding who should get health insurance coverage.  Those left out are marginalized by the system: to do without care or to be dumped on hospital emergency rooms.  The cost of health care is rising so fast that employer provided insurance, the mainstay of the current system, it causing financial distress.  The annual premium an insurer charges an employer for a health care plan covering a family of four averaged $12,700 in 2008 a rise of 5%[3]. The cost increases are so bad that even the insurance middlemen who profit from the current set up are willing to entertain non-market solutions, provided of course profit can be derived from a replacement.  The health insurance company lobby group, AHIP, is willing to provide "guaranteed issue"--nobody can be turned down for their medical condition--in return for a law mandating the purchase of private insurance.  Forty six million Americans do not have health insurance.  The California Nurses Association described that proposal as a "Marshall Plan for the health care industry" that "fully privatizes profit while socializing the health care risk.  The public systems could be bankrupted by their responsibilities to care for the sickest while guaranteeing huge new profit streams".

The usual criticisms of a single payer system are that a government run system will cost too much, and that it will lead to rationing of health care.  Right now we have a problem with over treatment because more treatments generate more profit.  Routine PSA testing is a case in point.  The National Cancer Institute does not recommend routine PSA testing because the majority of men diagnosed with slow growing prostate cancer will die of something else before overt symptoms arise.  Treating prostate cancer leads to other treatable side effects like erectile dysfunction and incontinence.  The prostrate market is worth $300 million annually[4]. Just watch the evening news--the numerous drug company commercials will deliver the message.  Physicians for a National Health Care Program says that adopting  a single payer system would save more than $350 billion per year by eliminating the massive private bureaucracy that consumes one-third of every health care dollar. Whether we admit it or not, rationing under the private insurance system already occurs.  About 20,000 Americans die each year due to lack of access to health care.

In college my public finance instructor talked about the "bliss point" of public policy making. He briefly described that as being the point at which you do the most good for the most people given the inevitable trade offs in any funding solution.  The current bloated mess we have to deliver health care in our country is a long way from a bliss point[5].  But it does one thing quite well: deliver profits to the private sector.  And the price of maintaining the status quo is quite low compared to the lost profits to be expected from a government regulated system.  The health care lobby gave $150 million to Congress and presidential candidates last year.   Now that is bliss.
[1] Harper's Magazine, Sick in the Head, 2009
[2]  Health care spending accounted for 10.9% GDP in Switzerland,10.7% in Germany,9.7% in Canada, and 9.5% in France
[4] op. cit.
[5] Harvard University found that the average out of pocket medical debt by those filing for bankruptcy was $12,000.  50% of bankruptcies studied were partly the result of medical expenses.  About 1.5 million Americans lose their homes to foreclosure every year due to unaffordable medical costs.

Monday, January 19, 2009

Friday, January 16, 2009

Le Shorter: Federal Judge Releases Detainee

Mohammed el Gharani, a Saudi aged 21, was released on orders of a federal district court judge yesterday.  Gharani has been detained since he was 14 years old.  Judge Richard Leon said in his ruling there was insufficient reliable evidence to justify his detention since the allegations against him were based primarily on testimony of other gulag prisoners.  The US persecutors alleged that el Gharani fought in Afghanistan before his arrest, and was member of a London al Qaeda cell in 1998. The judge found this tale unlikely since el Gharani was 11 years old at the time and the member of a poor family in  Saudi Arabia.  The government offered no corroborating evidence.

Monday, January 12, 2009

To Torture or Not to Torture?

For the die hard brush cutters out there here is a piece of news you can sink your machete in. The Torturer in Chief  publicly admitted that he committed a war crime by ordering the torture of Al Qaeda operative Khalid Sheikh Mohammed.  A defiant Bush told Fox Spews Brit Hume that he personally ordered the water boarding of the alleged mastermind of the 9/11 attacks. He said in the interview that the torture was necessary to "save American lives"[1].  However his claims of necessity are undermined by professional intelligence agents who have consistently said torture rarely produces good, actionable intelligence.  A Pentagon intelligence analyst who read the reports of Khalid's interrogation said that "90% of it was total fucking bullshit". Nevertheless, it seems that the newly elected administration of Barrack Obama is already at odds with itself over the fundamental question of whether to prosecute former government officials for war crimes.  Obama has made statements clearly indicating his desire to focus on the monumental economic problems facing the nation, but his newly appointed chief of DOJ's Office of Legal Counsel, Dawn Johnsen, said the administration should avoid any temptation to "simply move on".    If  you ask Joe the Plumber, aka Samuel Joseph Wurzelbacher, torture would not even get reported.  Sent to Israel for propaganda purposes by a right wing organization, Joe said, "I'll be honest with you. I don't think journalists should be anywhere allowed in war...I think media should be abolished from, uh, you know, reporting. God help us.
[1] Under the Nuremberg Principles (III, IV)promulgated by the Allies at the end of WWII, the fact that  a war crime under international law was committed by a head of state does not relief him of responsibility nor does the fact that a person acted pursuant to order of his government or a superior if a moral choice was possible. 

Friday, January 09, 2009

Compassionate Capitalists

In its last insult to organized labor the Regime's $13.4 billion rescue package for General Motors requires the UAW to refrain from striking the failing car company for as long as the company accepts federal money to stay in business. If the union strikes or stops work, the agreement gives the government the power to call in its loans and force the company into bankruptcy. The union must also agree to accept a plan to rollback wages and benefits to match US workers at foreign owned manufacturers (read: Toyota). It also requires the union to take two-thirds of the money it is due for a retiree health-care trust fund in company stock rather than cash or company debt reported the Detroit Free Press. The company has until December 2011 to pay back the federal loans. In 2008, GM CEO Rick Wagoner received a salary increase -- to $2.2 million, plus stock options -- despite the fact the company had been losing money since 2005. Such a deal. Maybe the company would make money if it manufactured what no one else is making now--electric cars. The company actually made a usable electric car, the EV-1, and tested it in California. After a successful test market, it recalled the vehicles and crushed them [photo]. Instead of a head start[1], the US will be behind China which has announced plans to export extant electric cars to the US. As long as Uncle Sam is running GM's business, it should require the development and marketing of a US made electric car capable of traveling long distance.

Of course this is not the first time GM made cultural decisions on what type of vehicles Americans will ride. GM and National City Lines conspired to eliminate metropolitan trolley car systems which GM's President Alfred Sloan viewed as unwanted competitors for the automobile. By 1946, ten years after its founding, National City Lines owned 83 metropolitan trolley lines in the US. There was no visible connection between GM and National City Lines, but in reality GM subsidiaries, Greyhound and Yellow Coach bus lines provided start-up capital, and members of Greyhound sat on National City Lines' board of directors. The director of operations came from Yellow Coach. Standard Oil of California (now Chevron), Firestone Tire Company, Mack Truck, and Phillips Petroleum joined the fossil fuel conspiracy to eliminate electrified public transportation. The Justice Department succeeded in obtaining a criminal conspiracy conviction. The companies were each fined just $5,000 for eliminating urban transportation systems that would now cost hundreds of billions to replace. The Justice Department spent the next twenty five years and three investigations trying to prove the antitrust case against GM. Eventually the company settled two cases out of court and the third case was dropped. Wackydoodle sez: "My daddy always asked, 'Lordy, Mr. Fordie, what have you done?'"

[1]The first-generation lithium-ion batteries powering Toyota's PHVs (plug-in hybrid vehicles) will be built on an assembly line at Toyota’s PEVE (Panasonic EV Energy Company, LTD) battery plant, a joint-venture production facility in which Toyota owns 60 percent equity. During its development, the new Prius was designed and engineered to package either the lithium-ion battery pack with plug-in capability, or the nickel-metal hydride battery for the conventional gas-electric system. The 500 PHVs arriving globally in late 2009 will be used for market and engineering analysis.

Monday, January 05, 2009

Le Shorter: Payback

Israel's invasion of the Palestinian ghetto in an effort to exterminate Hamas will not succeed in eliminating Arab resistance, but will succeed in killing innocents. The invasion, despite Hamas provocation, is generating more international support for an ethnic minority group increasily viewed as the victim of Israeli militarism. Blocking the UN Security Council from passing a resolution for immediate ceasefire with its veto this weekend put the US on the wrong side of the Middle East solution again. The vote demonstrates the power of the Jewish American lobby in our domestic politics. Hamas is a terrorist organization but so was the Irgun. Hamas also happens to be the popularly elected representative of the Palestinians living in the Gaza ghetto. Unless Israel is prepared to reduce the Strip to a concentration camp and put itself in a role antithetical to it's proclaimed national values and historical experience, it should return to seeking a negotiated settlement with the Palestinian remnant in its midst, even if that path may mean some stray rockets landing on its turf.

Saturday, January 03, 2009

Right Whale Saved

Now that the progressives' "war on Christmas" has been largely successful with big assists from the blue-sky vendors in the Street of Broken Dreams and the Zionists in Israel, US Person offers this small piece of good news to start the new year: A young right whale migrating down the eastern seaboard got ensnared in hundreds of feet of fishing tackle. Such incidents are increasingly common in coastal waters and usually mean a slow, painful death for a whale since they are powerful enough to drag gear until it literally cuts into their bodies killing them. Fortunately members of the Florida Fish and Wildlife Conservation Commission spotted the whale and NOAA's Fisheries Service mounted a rescue attempt last Saturday. A disentanglement team managed to partially remove the rope loops and reported that the remaining ropes would slough off in the sea. Only 300-350 Wright whales remain in the world, and are severely endangered by ship collisions and entanglements. The International Union for the Conservation of Nature estimates that 300,000 whales, dolphins and porpoises are lost each year worldwide due to entanglements in abandoned lines and nets. Based on scarring the Union estimates that 72% of the coastal right whales have had encounters with fishing gear and 10-20 of the population is entangled every year. The eastern Atlantic right whale is extinct. The western population migrates in the coastal waters of North America from Labrador to Florida were the only know calving grounds are located. The whale is protected under the Marine Mammal Protection Act and the Endangered Species Act. However, international action must be taken to require labelling of all ocean fishing tackle so that fishing operations deliberately abandoning gear at sea may be held accountable for their dumping. As one animal welfare expert said, "This is a serious animal welfare issue. We're not just talking about animals suffering a protracted death but also a horrifically painful and distressing one. Animals are breaking teeth and jaws, severing fins and suffering deep gashes and internal injuries. If this was occurring on land rather than out of sight, shrouded by the sea, the international community would have taken far stronger and far swifter action to bring an end to this problem." Its the three monkey syndrome at work.