Rat Tails

Iranian Oil Profit Limination Without Crashing World Economy or a War: RAP 'em

2011-12-29T10:45:00.003-07:00

Restricted Allowance Program - RAP

The problem: In order to pressure the regime in Tehran to stop its efforts related to nuclear weapons development, how to put an economic squeeze on Iran without spiking the worldwide price of oil, or starting a war?

A solution - Restricted Allowance Program (RAP): Pass a UN resolution binding on members states and individuals and corporations domiciled therein, to pay no more than $XX/barrel for crude oil produced in Iran, until such a time as the International Atomic Energy Agency (IAEA) certifies that all activities related to breaching the non proliferation treating have provably ceased. This is not an embargo, this is a way to pout pressure on their gross margins, without negatively impacting the rest of global oil price or production.

Examples: Set a maximum of $70/barrel for now for 2012. Or, set the cap at 60% of the then-current spot price, if we wanted it to self-tune to market. This would cut in half (after production costs) revenue to the government in Tehran. Enough to really hurt, not enough to destroy their economy or justify them entering into an embargo.

Will this pass the security council? If the biggest impediment is China, and the result is that China can get their shipments from Iran for less, one would think they would not object too loudly. Most all the other permanent members are oil importers, such as the Europeans, so they also likely not object to getting their Iranian oil for less - especially given the depressed euro-zone economic outlook for 2012. Russia might not want to precedent set in this way, as they are a large producer state, but perhaps theuy can be convinced that this is the least bad of available alternatives. They can't be that in love with a nuclear Iran on their southern flank, and this is a much less onerous sanction than an oil embargo.

Does this violate economics 101: Iran is at near maximum production right now and ships 5% of global exports, and for the foreseeable future, they can't increase supply too much, so all they can do as a economic protest is cut shipments, which would only dig them into a deeper hole with their oil revenues. Further, they will likely have trouble building up production capacity, between their revenues sagging and the other sanctions on them. Having 5% of global oil sell for less, when this "low cost" supplier can't increase their market-share, is not likely in the increase the global price much if at all for other sellers. They lack much f any refining capacity internally, so all they can sell in quality is crude oil. Most other OPEC members, particularly the Saudis, just hate these guys, and are likely to be pretty accommodating with any plan to causes them pain without damaging the rest of the global energy market materially.

What about the major energy companies: Any firm that can get their hands on this stuff at below market, and then can refine and sell it at market, is going to love this plan. Their competition may not, so energy firms not using this supply chain will be at a slight disadvantage, but with only 5% if the market exposed, one can expect disruptions to price of refined products here to be small.

How does this compare to the US congress idea of banking sanctions? Trying to control the relationships of banks to other banks and to monitor all cash flows related to oil sales is very tricky. Hiding a wire transfer is much easier than hiding an oil tanker. And trying to cut off the Iranian central bank from the world economy is perhaps closer to starting a war then the more precise pain point of crude oil gross margins.

What about cheating? There was cheating with oil-for-food under Saddam's rule, perhaps a little analogous to this RAP proposal. Won't there be cheating here as well? Certainly Iran will try and cheat, and use misdirection to get closer-to-market price for some of their exports. But the issue is not perfection, the issue is reducing their total oil income on an absolute basis, to encourage Iran to quit it with the nuclear fun and games once and for all. Plus, since RAP has a build in incentive for buyers to report cheating (why pay $90/barrel when the law says they can only charge $80) enforcement should be less difficult than oil-for-food, which also attempted to track and control where all the funds were spent.

Will the Mullahs go to war over RAP?: If we set the price for their oil too low they might start a war. The trick would be setting the price in just the place where the pain is high, not not high enough to make them want to tip over the whole card table. If they go to war, try and close the Straights of Hormuz, for example, then their oil revenues will go to zero. Also, the fact that it is a tough election year in the US for Obama might give them serious pause over going to war in 2012 over something like reductions in gross margin yields - getting into a shooting war with Iran, where they shoot first, would be an awfully good thing for our commander is chief to to be persecuting in the run-up to election day. He might even collect some neocon votes, and the Israeli lobby would move fully back into his camp. Bad year for especially these guys to pick a fight with the USA.

What's end game: Iran just needs to get the IAEA, a non-US lead international group, to sign-off that IRAN are totally out of the illegal nuclear activities and enrichment game, and the RAP is suspended. Easy. and reasonable. No need to bow down the the Great Satan or anything. If they put it all on the table, this could be solved in 90 days or less. And if they don't? Wait a while, and then squeeze down further on gross margin and price. RAP them with this truly smart sanction over and over again, until the result if achieved.

Cheatublican Party. Cheatublicans - A new meme. Pass it on.

2011-10-07T21:46:00.003-07:00

Been looking for a smart comeback from the “Democrat Party” line for years.

There is a word I'd like to see popularized for a political party that has settled on disenfranchisement as a core state and national policy:

Cheatublican Party

Seems to fit in with current voter ID and related laws that Cheatublicans are chasing to make it harder for people to vote. If you like it, feel free to pass it on. Cheatublicans need to be watched very carefully in 2012.

Fairness is what the next election will be about. We need a meme to support it.

Hard and Soft

2011-05-15T21:06:00.002-07:00

Its trite but I am having a hard time avoiding it. The social context of man is the software. The genetics are the hardware. The homosexual symmetry reaction is a way to take the hard out of the propagation stream, but keep the software in circulation.

Words of the day

2011-05-11T09:30:00.003-07:00

Turmudgeon. A senior technologist who has started to lose interest in novelty, and is rather grumpy about it to those around him or her.

Music. Sound organized in time

Economy. Desire organized in time

Laughter

2011-03-05T20:01:00.000-07:00

Part of the mind builds models of how the world works. Part of the mind measures the world. When the model mind and the sense-based mind diverge, the possibility of humor is born. Humor is the pain/joy that gets the model mind to move closer to the real world.

Taxes and the time domain: sell more public risk

2011-02-08T20:56:00.003-07:00

It seems to me that one of the challenges of current political dialogue and tax code is that the tax code is based on most often current year bets, while the political discussion is sometimes based on bets that cover many years, decades, or even centuries.

What is the federal government let people pay taxes based on some of the risk factors it faces itself? Foe example, oil and coal firms do no believe in global warming? Let them pay "tax derivivaives" that take into account their belief. Do I know what this means yet? No. But I think if we can get the government out of the business of simple profit percentage taxes, and into the business of making people take some of the long term bets they claim in the public domain, I think some of the bull would recede.

Hot Rides for the 112th Congress: The Obama Personnal Income Tax Cut

2010-11-28T13:32:00.005-07:00

The biggest issue here is frame. Bush tax cuts, for rich or for whatever -- what self respecting Democrat wants vote for that, even if this is a reasonable way to raise revenue or help the economy. Plus, tax cuts versus rich versus tax cuts for the middle class, that is a TERRIBLE frame plus it is not really even in the law. The fix? Change the game, change the game, as follows:

The Bush Tax crap dies all by itself in January, RIP, time to move on for America.

The 2010-2012: A new economic beginning

· EVERYONE gets low rates not the 1^st $250,000 income. Rich, poor, does not matter, the first $250,000 we treat that income as the same for all. Expires in 2013 for all, saving $3T of the long debt, making tea party happy because it does not push the long term debt, but get Obama reelected, and we can have that fight in 2013, the economy (and the political landscape) is in a different place.

[I know this is what the already says, what is missing is the frame. We have the focus on the word FAIRNESS and we need to get away from the word BUSH TAX CUT.]

This needs to be turned into talking points to get pushed non stop through the rest of the lame duck.

Hot Rides for the 112th Congress: Fix the Estate Tax

2010-11-28T12:53:00.007-07:00

The biggest issue here is frame. Death tax -- who is going to vote for that, even if this is a reasonable way to raise revenue. The fix? Change the game, change the game, as follows:

The death tax law Bush has left us with taxes all estates tax above $600,000 starting in 2011 at close to 50%, and therefore forever. And then this money is just handed over the congress to spend as general fund. Bush really sucks, but we are ready now to get past all that.

Cut this tax to zero for any non-farm estate under $5M index it to inflation from now on, and it apply it only to directly reducing the national debt. (single family farms get excepted from this for political reasons). Its not the estate tax anymore, it is the contribution people make to America's children as a whole, to make up for the sins of spending and deficit. It's is one of the things we do to pay down the national debt.This turns it all around: instead of "democrats make even the dead pay taxes" we say "it is the job of everyone in American to contribute to paying down this national debt to leave a better country for our children and grandchildren." It becomes " the Republicans are so committed to the protecting the rich that they stop protect the dead republicans from doing their share to pay down the debts, so America be great once again."
Let's see who will buy this when packaged right:

Anyone who is about to get his/her with an estate hit that is for $5M or less
Tea Party guys, who want to say they did something about the national debt that's real
Republications, who can in fact claim they passed a massive cut in the estate tax, even if they have lost control of the frame. Besides, they are going to be hard pressed with this issue to "do nothing"
Democrats who preserve this important balance between classes and generations.

Is this an accurate preservation of the fact economic pattern? Hardly. But the other side focuses this movement into the marketplace of ideas, and this is an idea we can get done between now and 2012 that could actually pass.

The name of the book...

2010-09-21T08:31:00.001-07:00

The name of the book is dog law.

Social stress and religion: cause and effect?

2010-09-02T08:03:00.006-07:00

I am not sure what to do with this idea, so I tuck it in here for a rainy day project.

There may be a distinct positive correlation between social stress and religion, with social stress being a potential causative factor of religiosity.

Take Europe, where the virtual elimination of war since 1945, combined with a powerful social safety net, has caused religion a period of radical decline, especially classic Christianity.

Why not in the US? We continue to fight wars, and our relative individualized and low group cohesion, high levels of social mobility and and down, contribute to high social stress, and as a result may contribute to a prevalence religion

The Arab world? Come on, extreme social stress of moving from the middle ages to the modern age in a few short decades, stress of great wealth in some places, stress from auto0mctaic regiions, stress from the effecrtivce ethnic intervetion caused by the foudning of the state of Israel, stress of implementing arbirary nation-states, no wonder they need to salve of faith.

Take China, where the emergence of a symptom (religion Falun gong) during a total social transformation from communism to capital;ism, is treated as a disease of the most serious kind. They do not want the stress to show, lest if start to feed on itself and spread.

Rude-ublicans

2009-09-16T21:29:00.002-07:00

Rude-ublican. Rudeublicans. The Rude-ublican party. Joe Wilson, hero of the Rude-ublican party.

The sad truth in Iran is simple math

2009-06-19T20:19:00.002-07:00

30 years after the revolution, the sad equation is balanced:

Khamenei's Basij = Shah's Savik

What will the people do to the new dictator?

Why Cheney Really Needs a Conditional Pardon

2009-05-24T12:20:00.002-07:00

* Or how I learned to love him bomb *

War-crime can be a difficult concept to fully get one’s head wrapped around. After all, if aerial bombardment of civilian centers with high explosives is a legitimate act of war, indeed a popular one, so long as the bombs were aimed at really bad fellows when they were launched, then we are talking about accidental mass killings of civilians as an unfortunate but acceptable cost of war. So where does the crime part kick in? This gives me not just a little bit of cognitive dissonance, sort of like nuclear-pajamas – don’t know what they are, not sure these words make sense beside each other, but I am darn certain I don’t want a pair next to my naked skin tonight.

No one bombs heavily populated cities from the lightly; it’s done when the reasonable expectation of good or even great outcomes for the war effort, enough to outweigh the possible cost in innocent lives. If one of our predator drones in the hills of Pakistan were able to drop a hellfire missile into Osama’s lentil soup whist he was sipping it, many would feel no war crime had been committed, even if his 97 year old grandmother dining beside him were also to perish. Americans would likely say that the death of all the grandmothers in the village where Osama hides would be no war crime under these conditions, meaning getting that big ape with our big bomb.

But the death of every grandma in Pakistan? Now that crosses the line for most of us, which is a key reason why we do not just nuke the tribal areas once and for all. It’s not just about numbers – few if any Americans would agree to take all the children from the village and boil them in oil till they gave up Osama’s spider hole – most of us just don’t go there, no matter how hard that spider hole may be to find, or how totally nuts it makes us to see that miserable snake on television every so often wearing his little white dress and shaking his smelly finger at us. We just don’t cross that line, no matter how provoked we might be. Some folks might, but not us. That’s why we call them war-crimes.

But is it a bright line? We have a list of these war-crimes, a list of the limits of the techniques we allow our warriors to used and not use, and here some the critical part: for stuff on the far side of that line, we have agreed not be swayed by any argument that ‘this works really well.’ Take genocide. It’s not as if we can buy into a genocide strategy as legitimate, say, if we add an extra really, as in ‘really, really, really effective at meeting wartime goals. For most of us, the reason is a priori simple – ‘reallys’ are not hard to include in a sentence, but the loss for eternity of a people is priceless beyond words. No genocide by American troops allowed, ever. We may even mess you up if you try it in your own country.

So the idea of limits seems legit, some stuff that’s on it is clear, now who keeps the list up to date, especially with regard to certain hot topic, like torture? Well, it seems we have a bunch of laws passed by our congress that keep a pretty explicit list, then we have other versions that we have also signed up for, such as the Geneva Convention, the Nuremburg principles, the U.N. Charter, all stuff that our greatest generation-types from WWII actually lead the way to create, perhaps because this WWII thing just got totally out of hand with regard to all kinds of folks stepping over where we wanted to see those lines. But this is not just a bunch of dead white’s guys from the 40’s who work on the list. The Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, was signed by the President Ronald Reagan on April 18, 1988 and ratified by the Senate on October 27, 1990, which makes it US law. So even old white guys from the 1980’s were not on board with torturing getting pulled from the no-go list of war crimes.

OK, now that we know about the list, is there any doubt that torture of prisoners in included? Nope, there it is, black and white. No torture. Why’d we put that in there, what were we thinking? Likely something about the dignity of the individual versus the collective of the state, limiting the power and reach of governments, personnel freedom, life, liberty, and the pursuit of happiness sort of stuff.

So have we been engaged in torture? Let’s see, keeping a man or woman awake nonstop for a week, leaving them naked and cold in a cell chained into stress positions, artificial drowning, face and slapping, repeatedly being slammed up against a wall, treated with Military Germen Sheppard in attack positions when things get too slow, and using many of this techniques in combination, over and over, till at least some prisoners actually up and died. Hmm. Of course this is torture, any idiot could tell you that, if not ever lawyer; we are trying to physically pound a human being till they utterly cave and give us what we want. Is our torture more measured, more scientific, milder, then gouging out someone’s eyeball with pen knife? Sure it is. The Pacific Ocean is way bigger than the Atlantic. But they are both oceans, with a whole lot of water in them. The point of torture, why 81 countries around the world, according to Amnesty International, still do this stuff, is generally to get something from someone who very much does not want to give it. Most don’t do the eyeball ting anymore. But a lot of folks still seem to torture people.

So, when Cheney says ‘we don’t torture’ of course he’s being disingenuous; torture is against the law, and he does not want to be jailed by opeing his yap too wide just now. But he knows what that his programs amounted to torture; his point is that the terrorist are really, really scary, and he thinks this approach works really, really, really well to get them to talk.

His metapoint then, if Dick is too scared to say it out load? Change the war crimes line, take the mild torture stuff and put it in the OK pile if we have no other choice to get our way, instead of its current no-go land designation it holds. He wants to protect the collective (our people and our government) from a small group of truly devilish individuals who wish to do us harm on an extremely large scale, and have shown some capacity to making good on their threats. Is he right, do we need to redraw this line?

The laws making torture illegal in the states, though, have about a much chance of being broadly overturned at a federal level today as the laws against smoking marihuana cigarettes outside the Sunday School. Whatever you believe about either topic, it’s not easy to find bill co-sponsors for new laws with titles like “Dopers Bill of Rights: or the “Freedom to Torture Act.” Especially the torture thing, because of that war-crime term. The stuff we refuse to do, ever, no matter how many reallys get used.

So, here’s where we get to the Cheney needs a conditional pardon thing. If matters have gotten so serious that we need to take mild torture from the war-crimes list and put it in the sometimes-OK list, how can it get done without a spokesman with the experience to make the case? How can he make the case if speaking the truth puts him in stripped pajamas?

Because we need one speaker free to try and make this case, I say we pardon Cheney for his torture crimes, but only with the following three conditions:

He fully admits his own role and the role of others in sponsoring our torture programs. We may need an advocate for the unpopular pro-torture camp, but one’s enough, the rest should be subject to the rule of law as it stands today;
He must promise no more dissembling in public on this or related topics, on pain of losing his pardon. No more ‘enhanced interrogations’ instead of torture. And he must make the direct argument that our form of torture should not be a war crime; because that’s his true message;
He must provide honest and detailed oral testimony to congress every year outlining his pro-torture beliefs, and recommending which laws should be amended to move ahead the pro torture position.

Of course, he’s welcome to take a pass on these conditions, and the pardon that could go with it. But the continued Cheney media blitzkrieg is not likely to win the day to making torture-light a non-war crime, and that could mean that some night soon, the knock on his door may just be some law enforcement types aiming to send him to a different big –house than the one Halliburton has him in just now. If that happens, I hope Dick Cheney, a man of great speechifying skills but no known for physical bravery or meticulous firearms safety, he of the five Vietnam era draft deferments, is wearing his atomic underpants for full protection. He may have served some time for those various DUI arrests in Wyoming, but this war criminal thing, they simply throw away the key on that one. He’ll need some special help.

Me, I hope he takes the conditional pardon. Having Dick spend the rest of his days under the constant demands of truth telling, it sounds almost like a crime to miss it.

Getting a handle on pay at public companies

2009-02-09T09:56:00.000-07:00

The U.S. has the most excessive executive pay abuses in the world, and it is way past time we did this, anyway. But a broader and more basic thought than board reform, which is itself difficult to do, is listed here:

There is a sharp distinction in the United States between firms that can sells equity directly to the public (public firms) and those that cannot (private firms). In order to have the privilege to sell equity on public markets here, firms must obey tons of rules promulgated by the SEC and others. Firms have a choice -- do not sell equity on the public markets, if they want to avoid SEC rules and regs.

You want to fix excessive exectuive pay for U.S. public firms? One does not need to invest taxpayer dollars to make rules, the simple fact is that the rules can already be made by the SEC and Congress, in exchange for the right to sell shares publicly. If a firm wants to be free to pay management to excess, let them be privatly held. But if they want our pension funds dollars, they should play by rules that the government sets, because the equity market has real trouble with long term vision; this is where rules come in so handy.

Some simple rules to SEC and Congress could apply that would take care of excessive pay, and a few other things to boot:

1. Flat out default cap all individual compensation at $5M in total compensation, and index this cap to the S&P 500. Firms can play with the cash and equity pay mix as they compete for talent.

2. Take away the automatic broker/dealer vote on directors, and open up all public company shareholders lists to public scrutiny, so that different parties can compete for votes during directors elections (right now, even the companies do not know who most of their shareholders are, thanks to NOBO/OBO rules that protect only broker/dealers.

3. Give public firms the right to pay up to a $25M cap, indexed to SP 500, with at least a portion at risk for performance, if they get a shareholder vote to exceed the cap every year.

4. Tax all stock transactions a tiny amount, give the money to this SEC / PBAOC, and have PBOAC pick and pay for the audits of all public firms, including detailed reports on compensation compliance.

Do those 4 things, and I think you will see a lot more CEO's earn what they are paid.

- A disgruntled CEO.

--

Israeli Military-Industrial Complex More Short-Sighted Than Ours

2009-01-06T11:51:00.008-07:00

As an unreformed fan of secret weapons and technological solutions to many of life's little problems, I wondered recently why the boys on blue and white from Tel Aviv did not just find some way to shoot these missiles down before they landed on their cities, rather than diving into this huge and bloody invasion thing. Was it technically impossible to shot them down? Too costly somehow? How can a State like Israel loose-out to a bunch of guys using tunnels as their secret weapon, and working for some Persians with a play book so much right out of the Middle Ages?

Turns out shooting down down the Qassams from Gaza is quite do-able, and that the reasons they have not done so, according to the Israeli paper Haaretz, have a lot more to do with the the strange preference of certain Israeli defense groups for building their own "Iron Dome" system for export (which does not seem to work and costs $50,000 to fire) than in buying an American version called Nautilus which does work, and cost $1,000 to fire. NIH - Not Invented Here stuff. Yikes!

I am a supporter of Israel, but this kind of thing is just an insult to the US, given how heavily we already subsidize their military.

Read all about it at: Iron Dome system found to be helpless against Qassams (By Reuven Pedatzur, Haaretz Correspondent, Feb 22, 2008). Make sure and read the parts about Northrop Grumman's solution, and why Israel chosen to take a pass on a system with 100% kill rate for such rockets as they face in Gaza (alt linkhttp://www.haaretz.com/hasen/spages/956859.html).

Disclaimer - I have nothing to do with Northrop Grumman, I just hate stupid.

Too big too fail? Then too big for fully private

2008-12-21T10:56:00.012-07:00

There has been some debate of late about who deserves 'bailouts' and who deserves 'new regulation.' It would seem clear to me that a firm that is 'too big to fail' is also 'too big to go without pretty complete end to end regulation,' as we are supposed to do with all depository banks.

So given the above, what's a free marketer capitalist to do?

Avoid creating firms that are too big to fail, and when they form on their own, gently nudge them either out of existence, or into a regulatory framework, or both. Empower the FTC to deal with 'too big to fail' as it deals with monopolies today - get them to change their structure, or have it changed for them.

If we want to preserve the free market, then we need to create economic structures made up of smaller entities that are not too big to fail. Too big to fail is a socialist structure. By this I do not mean small business, and that is well and good and sometimes great, but if we find a piece of the economy where the firms are too big to fail, we need to figure out how to restructure it to either eliminate this condition, or else how to regulate it. If AIG is too big to fail, then we should not allow insurance firms to get so big. Or else they should be subject to across-the-board regulation, and not allowed to hide parts of there business in non-regulated areas.

Take the automobile sector. If the GM is too big to fail, then what is a structure that would be more robust and capitalistic? How about we take after-the-sale support, and make that standalone. The maker would have to put aside, in another company that they are 100% divorced from, all the parts and cash to cover their warranty work down the road. Networks of local dealers and local repair shops can affiliate with these warranty support firms to get the help and materials they need. These 'support' companies would need to operate in a very transparent way, so we could ensure they have the financial resources to support their obligations over time. The foreign makers should have to spin-off their support to these entities as well, for the right to sell their cars here.

How is that a win? The buyer of a car then would not car if they bought from a dying firm, because the firm that supports it has the cash and the parts, that buyer is much safer. Indeed, this might even be a plus for GM, as it would support the idea of buying from them even in hard times.

And the same could be said for automotive design, why must that be controlled by 2-3 US firms? If we separated design into its own firms, perhaps dozens of them, and just had GM make the cars on a line, think how much more innovation could be had. And if the manufacturing sector is too big to fail, then regulate what's left there, and protect the jobs involved. Already, the parts business is broken out into lots of smaller firms. How about we just extend that model until the piece of GM that is too big to fail is really small? We move from General Motors to a very specific motors, a much safer and more stable structure over tough times.

Back to the financial sector. A piece of regulation we need, from here on in, is that a regulatory regime shoulder include as a default a ban on outside lobbying or compliant contributions by executives. This is especially true in the financial sector, where abuses by Freddie and Fannie, among others, have been a not-insignificant part of our recent woes. Congress, unfortunately, is not able to properly represent future generations well, when the current generation is writing campaign checks in the now.

Now, what's the hammer that keeps firms from getting to big? Remove access to the public capital markets, most importantly, the stock market. Just do not let them sell stock to the public. The SEC can do this with a stroke of the pen, although congress should be the one to take the lead. Phase it in over a number of years, so firms that do not want to live by these rules can go public, or get small. This would remove a lot of the gratuitous huge firm with huge firm M&A work, but would spark a new book in a kind of reverse M&A spin-off business that should keep wall street occupied for an indefinite period of time.

By the way, the same logic can be applied to executive compensation. We do not need to tell firms what they can or cannot pay employees or executives. But we can say that if they want to sell stock to the public, then compensation must be certain standards, and not be excessive, just as we now tell firms that their accounting processes and reporting must meet certain standards, or they can't sell stock to the public.

Who decides what is excessive? I am sure the political process will produce a better result than the current model, where extreme agency-based economic splits between shareholder interests and manager interests have lead to something truly broken.

So you want to pay anything without limits to managers or sales superstars? Then be a fully private firm, feel free.

So you want to be a massive vertically or horizontally integrated too-big-too-fail firm? Then first, be private, and second, be aware that the public policy agency will be to find a way to manage the risk to the treasury that you are creating, by creating environments that are opposed to the way you work, as we do today with monopolies that take advantage of uncompetitive market conditions.

The economically minded here might ask, 'if we can't create too-big-to-fail entities, then how can we take advantage of all possible scales of economy?' The answer is, that if a firm is too big too fail, then by nature it cannot be allowed to take the risks that are basic to a free market model. In a sense, it a therefore already a quasi-government owned entity, whether or not the taxpayers get to own stock or not. This creates an extreme moral hazard for the firm and for tax payers alike, one that is not compatible at the most basic level with a free market philosophy. Thus, we can say that these 'scales of economy' are illusory, in a certain sense.

We can do better.

How to get it done, politically? A crisis like now is a good start. Here are some interest groups that could be brought to bear:
g

, this will be a massive windfall for them.
People of Car About Changing The American Car, especially the Green Among Us. Breaking design from manufacturing will be the biggest innovation boom to the automotive business ever.
Unions. The parts of economy remain too-big-too-fail should be the fertile ground for Unions. If the shareholders and the managers get government protection from market forces, so should workers, and this should be baked into the regulatory structure. It creates an economic safe zone for them to work within, where collective bargaining makes sense.
The Right-to-Work Crowd (Anti-Union). By moving a lot of work that is currently in huge firms into smaller ones, they create a safe zone (outside the southern states even) to make non-Union hay where the grass grows the best, in the areas of the economy that need to change and innovate the fastest, and where the new jobs will be created.

Automotive Sector Bailout - Thinking Outside The Box

2008-11-17T13:54:00.012-07:00

Recent discussions regarding support for the U.S. automotive sector are falling into predictably dull regional lines, which in the current political climate, is closely approximated by some partisan political lines. Republican Shelby from the South, home to many of the non-Union non-U.S. manufacturers, correctly points out that giving cash to failing firms does little to either insure their success, or protect the taxpayers interest. He suggests a Chapter 11 filing, to fully clean house. House Financial Services Chairman Barney Frank of the Northeast pushes instead for a loan package with protection for taxpayers somehow build into the offer. There seems diminishing likelihood of reconciling these views in time to act to protect the 2.5 million connected to this sector of the U.S economy.

Perhaps we are now at a time for some out of the box thinking.

Let's start by examining the proximate cause of the current crisis. While one can make an argument that some of these firms have been poorly run for decades, the reality is that most of these firms have been quite profitable for much of the last decade. GM product $2.8B in net income as recently as 2004, and had larger profits than that in 2003.

Taking just to current crisis trigger, the problem for GM and some of the other US car makers is a sales problem -- they need to sell more cars in order to break even or turn a profit. These firms will also need to fix their future product mix and cut costs, in order to make it in the future, and alter a million other items without their business models, but right now, today, the issue at GM and at Chrysler is a sales problem, which has gotten serious enough to lead to a cash problem.

Here's are two out-of-the-box ideas for how the federal government could keep this part of the economy going, without simple writing a hot check from the TARP and hoping that the folks in Detroit are able to change things on their own.

#1 - Have the feds buy a whole lot of cars, trucks, and buses. I mean, $25-$50B of them. Pay for the vehicles in advance with a big cash deposit. Make Detroit build vehicles the federal government can use, for uses like the armed forces transportation system, the postal service delivery system, helping the the 3 million-strong federal workforce (perhaps you can deduct something from their pay in they take a federal car for a few years). With this order, make Detroit deliver vehicles that are incredibly fuel efficient, or that run on natural gas, or hydrogen, or battery power, or something else that would jump start some critical new sectors of the automotive space. Put a board together to oversee the purchase, and have them take 1-5 years to get delivery of all that is needed -- change the order as circumstances change. Put a special emphasis on building lots of efficient buses, and using them to help towns and cities automate their transportation system with cleaner burning vehicles that they might otherwise not be able to afford for years.

#2 - Let GM and friends go Chapter 11, but have the feds step-in prior to the filing with Congressionally-approved $25-$50B in DIP Financing. Debtor in Possession Financing (DIP) is a special investment made, post filing, that ensures the DIP Financing repaid before all others. Put a special board in charge of the DIP program that would oversee the management of the credit line, and protect the taxpayer's interest in bankruptcy court. Make sure that a healthy future automotive environment for US Workers is at the top of the bankruptcy court's to do list. This solution provides for continued operations of the US automotive sector, as desired by many in the North and many of the democratic persuasion, as well as by 2.5 million workers; it also provides for a powerful and immediate reorganization these firms, creating new entities sustainable into the future, with an improved opportunity to become responsive to market demands. It will certainly produce new management and new boards, which many seem to agree are changes whose time has come. With this level of investment, we may even be able to get the bankruptcy judges (this will take a team of judges to handlke swiftly) take the unusual step of insuring that even the common shareholder in GM is given a return on his or her investment over time, perhaps in the form of new stock or warrants to purchase new stock. Promise in the DIP that all A/P generated after some nearby date, November 1, let's say, will be paid by DIP funds, so that there is not vendor freeze on GM's own common credit.

Separately or together, these two out-of-the-box ideas could turn this game around quickly, and get all players on the same page, before so much time is lost that a great asset to our country ceases to exists, and in all likelihood, will not be build again from scratch by any future American capitalists, whose dreams no longer take the form of these kinds of giants.

News Comment on KJZZ 10/16/ AM Story ACORN Story - What's Up With Just Reading Republican-slanted Government Press Releases Just Before Election Day?

2008-10-16T08:30:00.002-07:00

Dear KJZZ News,

I caught your ACORN in Arizona story during AM drive time today, October 15, 2008. I noticed the story was rather negative on ACORN, and featured mainly if not solely comments by our Republican Secretary of State and John McCain supporter, Jan Brewer. I think the quote Ms. Brewer gave during your story, right from her Press Release at the top of her tax-payer paid website, was:

“Too often I have seen groups like ACORN who disenfranchise voters and file fraudulent voter registration forms here in Arizona . The truth of the matter is something needs to be done about private organizations like ACORN that attempt to knowingly deceive the election system. "

I have not heard much if any evidence that is out to "knowingly" deceive the election system. In fact, I have heard that ACORN is required by Arizona Law to turn in any voter registration forms it solicits, even those with clear errors such as phony names, and that it separates those under cover in virtually all cases to the Secretary of State's office. Ms. Brewer does not appear to mention that in her Press Release, or in your news story. Her not-very-indirect suggestion that making it illegal for anyone to be paid for proactively registering mostly the poor seems to be rather self-serving for a Republican party member whose voter national suppression mission has been transparent to many for a number of decades now.

Here's what is bothering me -- either your reporter tried to get the other side of the story by calling someone at ACORN in Arizona, and failed to mention it -- highly doubtful -- or the reporter thought that presenting only one side of a controversial and rather fear-mongering story (the poor people are out to steal votes!) just before a major election would be a great way to go.

Either way, it seems unlikely that journalistic standards are being upheld at your news center just now, from what I can hear on my radio recently.

ODE TO SOME COUNTERFEIT MAVERICKS

2008-10-10T15:12:00.003-07:00

WHEN I HEAR "MAVERICK"
I THINK MEAN CHICK
AND GRAMPIE SLICK
RABBLE ROUSING THE BODY POLITIC
TILL WE ALL FEEL SEASICK
FROM THIS RIGHT WING GIMMICK
WHEN I HEAR "MAVERICK"

- Michael G, 10/10/2008

Wall Street Bill Needs A Special Prosecutor Clause

2008-10-01T09:31:00.002-07:00

What's killing the Bailout Bill is not the price tag in dollars, exactly, it is the perception that the bankers are getting away with something. The solution could be as simple as adding a small section to the bill to find a Special Prosecutor to examine Wall Street misdeeds over the last ten years, and funding it with a hundred million or so, to make the investigation creditable. I think with this added to the bill, a number of folks could vote for it with a straight face. The issue is fairness, or at least, how the public perceives fairness.

More Words That May Remind One of Johnny M

2008-09-19T08:13:00.001-07:00

Father Time, Methuselah, Nestor, antediluvian, antique, back number,dotard, elder, fogy, fossil, foster father, fud, fuddy-duddy, gaffer, geezer, golden-ager, grampa, gramps, grandfather, grandpa, great-grandfather, has-been, , mossback, old-timer, old chap, old codger, old crock, old dodo, old dog, old duffer, oldster, pa, pappy, , pop, pops, presbyter, reactionary relic, seducer, senior citizen, septuagenarian, squire, sugar daddy, traditionalist, venerable sir.

Data Network Security Standards As A Politcal Tool

2008-09-17T09:34:00.002-07:00

I listened today to the radio (NPR) discussing voters out-of-country having trouble doing absentee voting. Some was because the military moves folks around a lot, some was because state laws are not consistent, and even designed at times to make this hard. But the real problem is the stupidity of having to move a piece of paper by hand back and forth around the world with high reliability.

Yet the basic Internet is no place for voting -- there is just too much chaos out there to trust elections to the system, likely ever. The beauty of the thing is that everyone can get to it. That level of openness is not what we need in a serious election.

What's need is a safe data network, where when a ballot gets sent out, it either gets delivered to the right person once, and then returned executed, or the sender gets notified that it cannot be delivered. And I got to thinking, who owns a data network that already does this well? For one, the international banking wire transfer system. They send messages that always get where they need to go, that never get hacked, and then things go wrong, there are lots of ways to create traceability and notice. And it is around $25 a message, way cheaper than Fed'exing ballots.

Now the bankers, I am sure, do not want to mess up there system with delivering lot of ballots for a small fee, but the idea here is that they manage at data network that knows how to get a secure message to the right person with extremely high reliability. What we if took all the means in the world that already exist to do this well, and broke them down by security levels, and then offered to explore moving ballots back and forth using ones that already have enough security to have voting be safe?

Something like this:

Level 0 Security: The raw IP 4 Internet, where the network participants must meet low technical standards, such as having an IP address, but whose identity is not assured beyond that, other than perhaps by a login password, and from which there is little protection of duplicate message delivery.

Example: Basic Email.

Level 1 Security: Software Encrypted IP 4 Internet, where the network participants must meet medium technical standards, such as having an IP address, but whose identity is assured by having a software key of some kind to decrypt the message and a password, but from which there is little protection of duplicate message delivery, and loss of software key take security back to level 0.

Example: Online Consumer Banking.

Level 2 Security: Software & Hardware Token Encrypted IP 4 Internet, where the network participants must meet medium to High technical standards, including software encryption by Level 1 standards, but also must have a hardware token of some kind, which is harder to steal than the software key of level one. Loss of hardware and software keys reverts it to level 0.

Example: Online Commercial Banking.

Level 3 Security: All the protections of level 2, but some form of location confirmation is added, ie, messages cannot be downloaded from any location, but only from certain specified predefined and trusted sites, such as bank branches, Western Union offices, or notary offices, or secure government facilities such as embassies, and those manning said locations are vetted and audited, allowing a reasonable degree of trust that duplicate messages can be minimized or avoided. Also, allows for some form of 2-party human-oversight of identity verification, such as checking of drivers license before information is released.

Example: Western Union money grams and message wires.

Level 4 Security: All the protections of level 3, but with a fully private data network isolated from all IP4 Internet traffic.

Example: Bank Wires, Embassy Secret Communications.

Level 5 Security: All the protections of level 5, but with quantum computing support for encryption or other not-yet-public systems for making messages unreadable.

Example: None are known.

Anyway, I would say that Level 3 or better is good enough to move votes around, and that we should enact a set of federal standards that would allow level 3 or better systems for moving a ballot around (which could be in the form of a pdf) and that any US Citizen eligible to vote who meets these standards can be provided a ballot anywhere in the the US or in the world, and can return the ballot via the same system. Initially, I think are talking about pdf files that would need to be filed out and signed by hand, then re-scanned, so that we can use the signature system as a reasonable double-check that the voters has OK'd the ballot. But this to me is at least as good as the US Mail, which is how we do it today, and allows for knowing with high confidence that the ballot has been picked up or not, as well as received back at the voting center, or not.

Government could authorization a list of providers who have the systems in place to be trusted with level 3, and who agree to move the ballots for a reasonable price. Then states or localities should be free to use whichever service they like, as long as they have a Federal OK on them. Voters may or may not have to pay for sending back ballots, but there should be a cap on the thing, like $5 a ballot or whatever, so that is covers the cost of security.

I think such an approach would be secure and fast to implement. Banks could take this right away, as could embassies, notary locations, Western Union, and others. Furthermore, once the voting system helps create these level 3 national standards, who knows what other applications could be found for the network? Move other kinds of official documents, supplement return receipt mail systems from a legal standpoint, pass vital instructions to branch offices, there are numerous possibilities.

Mortgage Market Repair Idea - Use Restricted Assumable Paper to Help Fix the Market Price For Everyone

2008-07-22T08:20:00.003-07:00

Here's the thing. We need to stabilize to value of homes, but we have to get down the monthly cost, so people can afford to live in them. How about we bring back the old standard, the assumable mortgage? Here's how it could work:

Feds (through the GSE's) take over a bunch of the sub $1M mortgages, if exchange for people agreeing not to sell for 2-3 years without taking a hit.
These guys get the rate on the loans taken down to 2 or 3 percent, fixed price 30 year.
These loans are setup so they are very desirable and also assumable, except you can't sell the home for 5 years (or some such figure) if you assume it.

The result?

Lots of houses that might have been forclosed and sold at firesale rates stay off the market
These homes stay off the market, because the assumable loan at super low rates is so valuable people will not want to lose it.
Because supply of homes and market drops as a result, prices should become stable that much faster.

Get gasoline under $3/gallon by Christmas

2008-07-18T06:17:00.005-07:00

Get gasoline under $3/gallon by Christmas

How about we ditch the defeatist no-we-can’t mantra of so many of the some of our older American political leaders, and do something all together, as a nation, to turn this ruinous rise in gas prices around, at least enough to take away the near-term pain for a while? And how about we do it in such a way that taxes do not catch fire.

Cool idea? Let me explain.

Gas going to $4.50+ in such a short period of time is too much, it will mess up our short term economy in the U.S., cause lots of pain for the less well healed, and ships far too much money off shore to some pretty unsavory kinds of bad-news petro-states. It may be a good thing over the long haul for gas to be not cheap, because now some clever folks are going to be motivated to find some alternatives, but in the short term, we the working people need relief fast.

If we are looking for short term answers, drilling just will not cut it. Bush is just an old man doing some of his old buddies a cynical favor, just suggesting it would fix what ails us today. Over the long haul, more supply may or may not be needed, but it is not going to fix the pain I face every Monday down at the Superpumper.

The only way to impact the supply-demand equation fast (and resulting market psychology) would be to cut demand in a major way. Since the U.S. accounts for 25% of world consumption of oil and gas, Americans are in a better position than most to do this. And since our biggest single use of fuel is passenger cars for commuting to work, if we could figure out how to take a whole lot of those cars and immediately sideline them, it would be enough to put a big enough dent in demand to move the price curve. A side effect would be a big immediate drop in congestion, which would shorten everyone’s commute a little, and save even more fuel.

The mechanical side is simple enough to explain. Right now, the vast majority of commuters to work are 1 person to a car. Only 4 out of every 100 drivers bothers to organize into a car pool system. If the American people focused on it, and I mean focused like it was a big deal, we could pop this from 4% to 20% in a matter of a few months. Cars would be idled by the tens of millions, with the gas guzzlers likely getting idled most, demand would drop fast and hard, and prices would follow, although the lag would be at least a few months, hence the Christmas date.

But how to get that mean people to focus that fast? 5 words: really-cheap-gas-for-car-poolers. Get it down to effectively under $1/gallon. That’s move some folks fast! Here’s how it could work:

Feds setup a program (say, for just a 2 year run to start, so that we are not getting into a structure we can’t sunset when we need to) where anyone who signs up to be an at least 4 day a week car pooler gets into the program.
The program has two main benefits. The tastiest is a government gas card, which entitles the holder to get gas for, say, $2/ gallon if they have at least 3 people in their car (fewer discounts for fewer people, more for more people, more for efficient cars, less for gas guzzlers). After this $2/gallon gets split 3 ways, bam, you have gas under $1, saving this group of 3 people almost certainly hundreds of dollars every month.
The other benefit is access to a truly massive web-based national ride board system, where the government does a little vetting, like ensuring every who signs up has a valid social, is a legal US worker, pays taxes, has a confirmed legal address, etc. But the Government asks Google to do the web application – they know maps and huge server farms, and they can get it done fast and well and to scale.
People in the system will have to sign a little contract, basically agreeing not to behave badly, and there will be some government penalties if they do. That way, odds are better that a person in the program will be an OK person to talk to about sharing a ride, and most of the fraud can b e weaned out up front by matching real people who file 1040’s to participants.
The gas card must be linked to the driver’s checking account, so the $2 gets pulled right out of that directly for each gallon, so that the government is not buying everybody’s gas outright.
For the balance of what is owed on the gas, the feds pay the oil companies directly in oil out of the strategic petroleum reserve, which they can refill after this effort gets oil back under $100/barrel, thereby actually allowing the feds I discount of perhaps 40% on the program net, making it a lot cheaper than sending everyone checks for a stimulus plan.
But in the near term, if we do it right, it should also work like an economic stimulus plan, by dropping household purchases of fuel widely. And since we are using SPR oil, we will not be immediately having the government drive up its debt.

If we focused, this could be done by summer’s end, or early fall. Just attacking the problem so aggressively would likely knock $10 or more from a barrel. If we actually get it moving, I would expect oil under $100 very fast. And BTW, this would be a huge savings on greenhouse gas releases, too. Toss in more telecommuting (boast the tech sector) a whole lot of free bus passes (to cover folks who can’t get a car ride but can take the bus) and some kind of tax breaks for doing 4 x 10 work weeks, and we can really turn this gas price thing around. And its a real community organizer kind of solution, Obama should love it.

We can do it.

Foreclosure & Legal Fees -Someone is getting fat here

2008-07-15T12:25:00.003-07:00

Seems like legal fees add a lot to the foreclosure thing, not all of it clear to all as to purpose. Here is what I am wondering. If 80% of all foreclosures start but do not end in the homeowner getting the boot, then homeowners must be paying a lot of legal fees, on top of mortgage interest and principal and such. Let's say that the average is $3500. If there are 2M foreclosure filings this year in the US, that would generate $5.6B in legal fees on the homes that do not get taken by the bank.

It would seem smarter, somehow, to pay this money to the bank, rather than to lawyers.

Moreover, it would seem that some lawyers have some pretty bad incentives to push people into focrecasure, and generate lots of fees.

Good chance here for some federal standards, I would think.

Social Asset Theory & Genetic Smoke Testing

2008-07-11T11:48:00.003-07:00

Darwin's theory of evolution sparks a deep conflict in many people that that Newton's theory of gravity just does not. Certainly a portion of this relates to direct difficulty in squaring the surface implications of evolutionary theory with the origin stories promulgated by most major religions and cultures, which are long on great hero metaphor, short on reliable citation. But perhaps something else is at work here; perhaps there is something left out of the classic high school explanation of natural selection and evolutionary fitness that strikes as a problem, at a visceral level.

Darwin's work relates directly to what I will call the survival value described in the genetic payload. The generic payload is the 'nature' in the nature versus nurture discussion. Since his seminal work was released over 100 years ago, careful thinkers have added important elements to this theory to include what I will call the social payload – the nurture portion of the dichotomy. In current mechanistic terms, the genetic payload could in some ways be considered form of the hardware of creation, and culture and learning a form of the software.

I started obsessing about this question (although not with this language) long ago, when I first heard a description of the title for Ibsen's The Wild Duck as follows:

"They [wild ducks forced into captivity and thus driven mad] dive to the bottom, as deep as they can get, and tangle themselves in the muck and seaweed, hanging on with their beaks to whatever they can find down there. And they never come up again.” (Source Unknown.)

It seems unlikely in the extreme that this behavior was directly passed on as part of duck culture. But how could it exist as part of the genetic payload? What would be its contribution to fitness? It seemed a paradox to me, at least at the time (assuming it is valid, which it may or may not be).

Over time, as I came to understand more about theory of kin selection, it made me a little more comfortable with this kind of paradox. Perhaps if a duck under stress stress took what some would call the coward's way out, a niche would be opened for duck's kin, who could better complete for energy and space in the environment – perhaps a cousin of to suicidal duck, one who otherwise might go hungry. I rested a bit more comfortably, given this theory of kin selection. It is just possible that over time to gene pool might self-select for ducks that could make this kind of choice, to protect kin even at the risk to self.

Suicide, though, is not the only behavior that would appear on the surface to conflict with tradition explanations of genetic payload propagation. Take, for the next example, homosexuality.

Ever since I learned that homosexuality is both common in many species, and at least in human males, that is running at 5% or more of the population and has a strong genetic component, I have wondered what the heck this could be about. Listening to gay friends and acquiescences in college, it became clear to me that most agreed that their orientation was known to them at a fairly early age, in most cases, prior to the completion of puberty.

The other day I was reading about some recent research showing that there are some subtle brain symmetry issues at work in this area:

Ivanka Savic and Per Lindström, of the Department of Clinical Neuroscience at the Karolinska Institute in Stockholm, Sweden, now report that the brains of heterosexual men and homosexual women are slightly asymmetric—the right hemisphere is larger than the left—and the brains of gay men and straight women are not. (Proceedings of the National Academy of Science 2008, June 18).

Whether or not this is truly a casual factor in homosexuality, it got me thinking about symmetry of systems within more complex animals. Major symmetry and related large systems defects are often fatal prior to birth, as shown by work in the area of spontaneous miscarriage. But if the coordinated development of billions of cells is just slightly off, and that trait does not become clear till the creature is almost mature and ready to breed, how should an evolutionary system respond? In species with an extremely short lifespan, perhaps promptly eliminating those recessive alleles from the gene pool, and doing so as fast as possible, would be the best choice (assuming their was no other special-case survival value to them, such as would be the case with sickle-cell anemia in malaria infested areas). But in a species with a relatively long lifespan, such as humans, and proportionately long gestation periods and pre-pubescent development periods, is a full and complete write-off the way to go? The investment of parenting periods, the total energy (in a chemical as well as a spiritual sense) invested in this new person is very high for the immediate write-down (to borrow an accounting term.) So, what is a better strategy than immediate write down?.

Perhaps the ideal evolutionary strategy at this point, to borrow another accounting term, would be to depreciate this social assets over time compose the species' investment in this individual. Use him or her to help education the other children of other kin, protect breeder kin from external attacks, and in other ways contribute to the welfare of society. But still find a way to reduce the likelihood that whatever genes contributed to the symmetry failure would be passed along.

So we can assume that a reduction in the probability of the passing on a series of genes that may negatively impact advanced stages of development, without killing the host and thereby preventing him or her from returning to society the value of the 'social asset' which is their life up to the point them the defects made itself apparent, would be evolutionarily desirable.

To move the analogies from accounting back to computer science, much as there are certain types of software and hardware large scale testing which can only be done by fairly frequently 'smoke tests,' where all the systems are combined, even in an imperfect form, to evaluate the large scale issues associated with their interaction.

So if a failure to achieve ideal the targeted symmetry in a large, import system like the human brain results on a behavior that allows the return to a social asset, but limits the ability of that individual to compete for passing on his or her genes directly with a mate, what causes the failure to achieve ideal symmetry? I believe that large scale symmetry conformation may be a highly polygenic trait – in takes a lot of genes pulling together to make the system work. To anthropomorphize a bit, if Evolution wanted to test the effect of a small allele change, one that related to performance during early adulthood in a species with long development periods, where much social investment is created to get to the points where a test could be done, it might want to be able to collect some test results without killing the host immediately, and thus taking a huge write-down.

If this conjecture is correct, then homosexual behavior may be a form a genetic smoke testing, building a system from novel components not quite ready for prime time, it turns out, but that work well enough to use for certain purposes. In software terms, we like the code base, mostly if creates useful builds, but before we do a broad package release, we need to debug this more.

So, this Social Asset Theory says that animals with long development cycles ideally should repay energy debts, even if they do not directly pass along their genes to descendants, by passing supporting their kin and especially though propagation of social payload. Genetic Smoke Test Theory says that minor variations in a small number of genes hidden amongst a very wide swatch of genes can result in a tendency later in life for that individual to focus more energy on the propagation of his or her social payload, and paying back his or her social debt, rather than passing along his or her genetic payload directly. Genetic Smoke Testing may express itself through systems that measure the expression of symmetry in large scale systems.

To unnecessarily extend the software development analogy, most smoke tests either results in a minor beta release (just about any adult individual with a clear road to genetic reproduction, but far from the final or the perfect expression of the code) or a developmental build (we use the test build to learn from it, but we do not pass it this code on directly to the next generation of products, due to uncertainly about certain changes) or in very rare cases, the release of a brand new product and a full-on fork of the code base (the creation of a new species).

Homosexuality is likely not the only example of smoke test-based evolutionary systems in action. Our ideal of beauty, which is another extremely polygenic trait or set of traits, can result in a decreased likelihood of passing on the genetic payload (think of the spinster aunt) but does not compromise that individual's ability to contribute to society, say, as a teacher, or a librarian, to carry the spinster analogy to the next step. Curiously, beauty is also related to symmetry, and may only become clear as childhood ends and puberty is either underway or has completed.

In closing, let's return to the implications for our culture of this model of homosexuality as a result of a ongoing series of Genetic Smoke Tests. If we are to believe mother nature is a rational first guide for us in this matter, than gay men and gay woman should be excellent candidates for the military profession and the teaching profession, places where these individuals suffer extreme discrimination today in our culture. If their role in evolution is to return their social payload to our culture, perhaps we should be doing everything to make this easy, rather than continuing this western-culture characteristic of creating barriers to this natural process. One day, I feel it is likely that the trait to be eliminated from human development may be culturally-based homophobia, rather than homosexuality, which may turn out to be not only natural, but a vital system in helping us to evolve ever closer to the creator's vision of perfection.

MG
Scottsdale, Arizona, USA.
Draft – July 11, 2008

(Timestamped by e-timestamp, this date)
(Timestamped by e-timestamp, this date)

Alcock, John. Animal Behavior: An Evolutonary Aproach, Third Edition. Sunderland, Massachusetts: Sinauer Associates, Inc., 1984.

Alcock, John. Evolutionary Behavior. Sunderland, Massachusetts: Sinauer Associates, 1989.

Adams, H. E., L. W. Wright Jr. and B. A. Lohr, 1996. Is homophobia associated with homosexual arousal? Journal of Abnormal Psychology 105(3): 440-445.

Bagemihl, Bruce, 1998. Biological Exuberance: Animal Homosexuality and Natural Diversity. New York: St. Martin Press.

Corna, F., A. Camperio-Ciani and C. Capiluppi, 2004. Evidence for maternally inherited factors favouring male homosexuality and promoting female fecundity. Proceedings: Biological Sciences 271: 2217-2221.

Haynes, J. D., 1995. A critique of the possibility of genetic inheritance of homosexual orientation. Journal of Homosexuality 28(1-2): 91-113.

Kendler, K. S., L. M. Thornton, S. E. Gilman and R. C. Kessler, 2000. Sexual orientation in a U.S. national sample of twin and nontwin sibling pairs. American Journal of Psychiatry 157(11): 1843-1846.

Kirk, K. M., J. M. Bailey, M. P. Dunne and N. G. Martin, 2000. Measurement models for sexual orientation in a community twin sample. Behavior Genetics 30(4): 345-356.

Kirkpatrick R. C., 2000. The evolution of human homosexual behavior. Current Anthropololgy 39(1): 385-413.

Proceedings of the National Academy of Science (2008, June 18). Symmetry Of Homosexual Brain Resembles That Of Opposite Sex, Swedish Study Finds. ScienceDaily. Retrieved July 11, 2008, from http://www.sciencedaily.com /releases/2008/06/080617151845.htm

Words that may be considered for writing about JM

2008-07-02T14:32:00.002-07:00

ancestral, antebellum, antediluvian, antemundane,antique, archaic, archaistic, bygone, caducous, dated, decrepit, doddering, elderly, experienced, former, geriatric, gerontic, gerontogeous, hoary, immemorial, lifelong, mature, medieval, obsolescent, obsolete, old hat, outdated, paleozoic, passe, past, patriarchal, prehistoric, primeval, primitive, quondam, seasoned, senescent, senior, stale, timeworn, traditional, venerable, vintage, whilom, wizened, wornout

	antiquated, antique, bygone, dowdy, fusty, fussy, old-time, outdated, outmoded, passé, advanced

26,000+ consecutive days of taxpayer-financed health care -- but just for John Sidney

2008-06-19T10:24:00.003-07:00

I am wondering how many days since he was born on August 29, 1936 has John Sidney McCain III not been covered by a taxpayer-financed health plan of some sort?

From what I can tell, this Admiral's son has yet to miss a day, thanks to the generosity of the American people over the 26,000+ days since he came into this world.

I am not disputing that a disabled veteran should be entitled to health care -- far from it -- but I find it disappointing that John Sidney cannot find room in his heart for the rest of America to enjoy the cradle to grave benefit of health care, as he has now for so long.

Hillary Queen of Scots

2008-04-24T08:45:00.004-07:00

"Mary I (popularly known as Mary, Queen of Scots) (December 8, 1542 – February 8, 1587) was Queen of Scots from December 14, 1542, to July 24, 1567. She was also the queen consort of France from July 10, 1559 to December 5, 1560. After a long period of protective custody in England she was tried and executed for treason following her involvement in 3 plots to assassinate the rightful monarch of Britain and place herself on the throne." - from Wikipedia, minor edits for shortness.

Let's examine a couple of facts regarding the recent behavior of the Clintons in their pursuit of a third term in the Oval Office in 2008.

Pledge deletes are the most direct representation of the will of the people available to the members of the Democratic party in selecting a standard bearer for the fall, and have for decades received very high deference in selecting the Presidential nominee.
Senator Obama, it now must be acknowledged, will end on on June 3 at the end of the primary voting system with materially more pledge delegates than Senator Clinton.
While Mrs. Clinton might be able to create a colorable case that she would be better for the party to overturn this for some reason and give her the nod, the level of animosity that will be shown from the supports of Senator Obama will be extreme and lasting; and due to the racial factor, they will not be mollified by November.
No democratic has won the White House by a large margin in almost 45 years; the country is currently too evenly split, and the loss of the energy of the black caucus and the youth vote will make winning in November impossible for her. She would becomes Humphrey.
Therefore, short of Obama getting caught with a dead girl or a live boy in the next month or so, there is no 2008 path to the White House for Hillary; moreover, her people must know this by now.

Thus we might ask, what are they doing sliming into May and June the now inevitable candidate for 2008, Senator Obama? The only reasonable conclusion I can make is that her team's behavior is all about 2012, likely the last chance she now has to reach the oval office of her own volition. Here's why:

If Hillary's does not win in 2008 and Obama takes the White House, her next opening will not be till 2016, by which time she is will gradually approaching 70. It is hard enough to get elected the first woman President, especially with a "let's remember the golden '90's when my husband was the top dog" slogan is not really working even today. Image how that will sound coming from an old lady towards the tail end of the next decade. Getting the VP node this time will not work for her -- she will just be too old in 2016.
Hilliary's only chance, then, is 2012 -- so a Republican must win this Fall to set up 2012 for her. McCain is perfect for this scenario, because he will be pushing his mid-70's when an opportunity for a theoretical second term would come, and there is a good likelihood he would either pass a on second term, or be fairly well smeared as Dottering by then, and thus easier for her to defeat (see a 2008 example here).
Therefore, what Hilliary must do to become President now, spring 2008, is damage Obama enough that he loses in November, but she must be seen by the party as not a disloyal solider, i.e., she must campaign for Obama in the Fall, as hard as she can.
Hence, Hillary must do as much damage to Barack now as she can, to ensure he is bloody and weak before then convention, at which point she must be seen as loyal to the party.
In short, her goal is the defeat of democratic candidate who will ride the top of the ticket in 2008 -- it is the explanation that makes the most sense of the fact pattern.

Traitor to the party, indeed. The question remains, will the leadership of the party see through this, and put down the revolt, before the Spanish Armada of the Republican party arrives in the Fall, to finish Hilliary's work for her. And will the media cover her true strategy at all.

Need Better Word(s) for Republican Fear Mongering Now

2008-01-17T10:02:00.000-07:00

Recent speeches by Karl Rove, as well as a long standing tracking record dating back to the start of this millennium, tells us that once again the Republicans are likely to run on a platform of terrorism fear mongering. Not that they have a lot of choice, given the legacy of W. But all the same, progressives need some short hand tools to counter this strategy – the long hand tools inevitably lead to proving the negative, i.e., there is no threat worth 300 million people loosing 4 year sleep over. And only a fool want to spend an election year proving an negative.

Therefore, I announce a contest for a single word or short phrase to use in identifying fear mongering amongst candidates. BTW - there should be language tools to ID democrats who may try this as well (heads up, Hillary, though you can still mend your ways). Prize is 4+ years of less insanity on the nightly news.

Here are two test cases to get things started:

Terropublican. (Terro – publican) Used in context: Rudy Giuliani , hoping to lead the charge for the Terropubicans this fall, has now petitioned the high court of New York court to change his official birthday to September 11. “We celebrate Washington's Birthday on a Monday, even though he was not born then, “ the feisty Terropublican was heard to say. “Why not me?”

Terrolitico . (Terr-o – litico). The Fox News channel announced today a full line up of expert Terroliticos for this Sunday's fox talk shows, including Brian Kilmeade, Oliver North, and of course Bill O'Reilly. Network President Roger Ailes commented that “when we get done with the Fox viewers this Sunday, there will not be a dry diaper in the house.”

Let me games begin!

AFA: An Arizonans Modest Proposal for Saving Boomer Social Security And Immigration

2007-12-11T17:43:00.000-07:00

American Fairness Act

The New York Times in even noticing how bad things are getting in Arizona immigration debates these days.

"Showdown in Arizona, Where Mariachis and Minutemen Collide"

We have too many people running around this country without proper immigration papers, and the chattering of those trying to chase them at gunpoint back to where they came from is hurting my ears. No where is this noise louder than in the land of Sheriff Joe, that is, Phoenix, Arizona. But even the national Republications in particular seem bent on creating the world's biggest cattle-drive in presidential year 2008. They seem hell-bent on making a bad thing worse. How about we take this serious problems and turn it into a fantastic chance to fix our long term social security mess. Listen.

According to the Social Security Administration, we enter the new year with nearly 50 million beneficiaries within the social security system. Supporting this group within this a workforce of 170 million workers, dropping seven percent or so of each paycheck into the kitty for today's beneficiaries. But in 30 years, when many of these baby boom era workers seek benefits of their own, this better than 3:1 ratio of workers to beneficiaries drops to around 2:1, with 100 million beneficiaries looking to not quite 200 million works to put some bread on the table. With current unemployment rates hovering at or below historic lows of 5%, and productivity at all time high in this country, the native population is not likely to change this equation in the near term by getting more of of its population into the workforce.

Our political leadership has proposed myriad policies to tackle this demographic-driven challenge. President Bush crafted a privatization plan, an attempt to increase returns on certain savings, although since the federal government spends these funds as soon as they are paid by workers, transition costs for the Bush plan for massive and unpopular. Various other groups have suggested cuts in benefits, or increases in the retirement age beyond the current 67, or increases in the taxes coming from each worker. Each of these proposals have one thing in common – no action has been taken for over two decades to implement any of them, and for the most part, our current crop of presidential candidates steers clear of discussing the issue with any depth, despite the risk that an American inter-generational compact dating back to the middle of the last century, is at risk of unraveling.

A policy area that does collect gobs of debate minutes, especially from the Republican side, is the management of immigration. According the the US Census Bureau, over the last six years, the population of this country has increased by a net 17 million, with around 7 million of this increase attributable to immigration. The load here has not been spread evenly. Arizona during this period picked up around 745,000 international immigrants, which is approximately the same as the number of native births in the state, enough to create a large amount of social unrest there. Wyoming and Montana gained perhaps 2,000 each, and had birthrates more than 20 times that large – perhaps today's immigrants shy away from cold winters. Presidential king maker Iowa had an ingress of 36,000 international immigrants, around 1/7th of its birthrate, about the same rate as New Hampshire.

Now across the country seems to come a groundswell of support for doing something, even something draconian, to stop this level of immigration, especially immigration outside the legally proscribed congressional quotas. Republican icon Ronald Regan heralded a 1986 law to give amnesty by name to immigrants outside the then-current system. The Republican debate today is split between those who only want to forcibly evict the 20 million illegal adult immigrants, or those who also want to go after there kids, even those born in the United States, such as Russell Pierce's group in Arizona. Yet they keep coming, even at the risk of life and limb, many in the summer across the harsh deserts south of Tuscon.

As the social security data clearly shows, what we need for the balance of this century is clearly an increase in the number of workers paying into the social security system via payroll taxes, ideally a group that does not want to hang around for decades and collect benefits from the system. We have a huge number of workers who are either here working under illegal conditions, or somewhere else around the world, willing to make huge sacrifices to come here.

I say, let them come, but instead of letting them send the full delta of their earnings as remittances back to their home country, let them pay a disproportionally large share to the people of the United States, for the right to live and work here. And let them stay as long as they want, but create incentives for them to go back to their home countries before retirement. Here is how.

The proposal is called American Fairness Act, or AFA. The goal is to create a system whereby current U.S. Citizens have a long term stake in the success of the U.S. Immigration system, through a special fee charged to immigrants to who here. This fee will range from a few percent for green card holders, to 5% for holders of other visas, to 10-20% for visa holders who cannot verify their status, to 30% for non-US Citizens who hold no visa at all.

Immigrants, or long term guest workers, whatever one chooses to call them, have 1/2 of these funds placed into a special reserve account. If the choose to leave before retirement age, they are sent payments for this 1/2 of the kitty, as long as the payments are sent outside and US, and as long as they leave.

The other 1/2, is kept within the social security trust fund, primarily, although a certain portion could be used to offset social costs that states experience, especially those with a large immigrant population, and for funding a fence along our borders and other security measures, so that the flow of immigrants is more managed.

Note that this is on top of them paying normal social security taxes, as well as other payroll, income, and sales taxes.

Adjust these percentages to get the number of immigrants we want over time. Treat the right to work here as an economic commodity for non-US citizens, within reason.

What about the kids who are here and can't work right away? For the kids, 2 years of public service, army or a CCC type thing, gets them a green card, if they have been here since an early age. Their wages for these 2 years go to soc sec, other than some basic living expenses. Let them help rebuilt our infrastructure, which they have enjoyed all the while they have been growing up here.

Limited public benefits for immigrant workers, especially those who have not come through the normal channels, but enough to be humanitarian.

If we can get 20 million immigrants paying into this kind of high tax system, it would carry the power of 2 times the same number of normal social security ax payers, since the fees are that much higher. This would move the effective ratio of 3 to 1 for the next hundred years, at level at which special security is solvent, with current rate of benefit payouts. And this is likely equal to the number of current illegal already in the United States, which most Americans would say is not an impossible figure to manage.

A major concern of many voters, especially in places like Arizona with a high immigrant population, is fairness, especially fairness to those people who arrived before the most recent immigrants, which makes up the bulk of the voting public today. The Republicans are proposing some kind of an immigrant roundup to get to fair. This will cost large amounts of money, and likely fail to work, due to shear numbers. The American Fairness Act proposed here takes what Republicans might consider to be the most painful penalty of all, new heavy federal taxes, and applies that to the undocumented immigrant workers. Most of these workers, I think, will gladly pay this kind of tax in order to not spend so much of their time looking over their shoulder for the ICE man. After all, these are workers that spend huge amounts of money on coyotes to smuggle them across borders, and they put up . It is very likely they would pay a tax man instead, given the choice.

Will employers go along with the AFA? Most are comfortable collecting payroll taxes. This would look like an expansion of payroll tax to them. If the penalties for false tax filings are kept in place, we would have a system of employer sanctions ready to go day one, no need to the somewhat crazy business license suspension model that Arizona is set to use on January 1, 2008, which will treat an Intel with the same 2-strikes and your out that it treats a five man roofing contractor, and is therefore very unfair. Perhaps worse than unfair, since the notorious pandering County Attorney of Phoenix, Andrew Thomas, has suggested he will launch witch hunts on any business at at time, based even on anonymous tips. Sounds a lot like the East German Stasi system come home to roast in the grand canyon state.

What about those who refuse to comply with the AFA? If we get a large number under this AFA umbrella, then the resources of ICE can be applied to a much smaller and more manageable problem of attacking non-compliance. By separating out the huge number of economic immigrants from the overall stream, we can apply our resources better to keeping out the truly undesirables, criminals, terrorist, and the like. Right now, hunting them is hunting a needle in a haystack.

Wouldn't it be nice to get this hay bailed up, clean and neat, ready to keep us warm well into our golden years, through the strength of our immigrant workers? Doesn't this make more sense than driving them away?

Keys to a Progressive Victory in November - Call The Loser B y His Name

2006-09-30T17:16:00.000-07:00

The political history of George W was based on a fairly simple political axiom -- child-like, it some ways. Just do the opposite from Papa George. Wimp? Not W, he cuts brush on the farm, made money running a major league sports team, and more. Start in Texas as a governor, not in some DC foreign policy once job like Dad. Balance the budget by controlling both spending and getting the tax mix right? Not W, we sets records for spending, and excessively cuts taxes on those who need toxic dollars the least.

Then of course the big one, keep Saddam in check with words and deeds, but stop the American advance short of Baddad? Not W, he is a go-all-the-way kind of cowboy. Now George finds himself cooking turkeys for our troops near the Baghdad airport each November, in celebration of the 1200 or so days (and counting) since his proclamation of mission accomplished in Iraq.

This is the storage's, in many ways, that helped get him re-elected, where his dad was strictly a one term pony.

But W has taken the strategy one step too far. While his dad was perceived by the world, and especially the Arab world, as having won his Gulf War, W is sticking by his mantra to do the opposite, and is out to loose this one.

That is the knock in the end that will get us shut of this latest Bush - he is losing a war. Americans are not fond of losers.

2006-07-09T12:04:00.000-07:00

The administration “tells only half the story, the part that makes us look good,” and keeps the other half classified.

{paraphrased}

Jami Misicik, The One Percent Doctrine, 2006. Former CIA analytical chief.

Civilization advances by extending the number of important operations which we can perform without thinking about them

2006-07-08T10:09:00.000-07:00

It is a profoundly erroneous truism, repeated by all copy books and by eminent people when they are making speeches, that we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.

Alfred North Whitehead, An Introduction to Mathematics, 1911.

Think out-of-the-box on North Korea: Bribe China

2006-07-06T15:58:00.000-07:00

The Dear Leader's recent July 4th missile test is clearly meant to provoke a response from the United States. Pyongyang is likely angling for economic concessions, perhaps something simple, such as our return to a blind-eye policy on their world-class dollar counterfeiting schemes. The Bush administration’s impotent posturing over the last 6 years does not appear to hold any answers. A major change in the geopolitical game may be called for to heal this 60-year-old wound, because bluffing games with missiles and nukes are rapidly losing their entrainment value, and its no secret that missile defense does not work.

The obvious impediment to any solution is China, and a much less extent, Russia. China is key because the North Korean state would likely collapse with its economic and military support.

In looking for a major "game change," then, we need to look more at what China wants, than at what floats Kim Jong-il's boat on any given day of the week. I would argue that China wants two things just now that the US may be in a position to give:

1. US troops out of South Korea.
2. US support for China's re-integration of Taiwan back to the mainland.

Striking a deal on (1) opens the door to the re-integration of Korea, as a united Korea on China's doorstep is a much lower threat to China, with the US military gone from the Peninsula.

Striking a deal on (2) is heresy to some, but is wanted so badly in Beijing to finish their war with the nationalists, that they might be open to doing the unthinkable, which is send the Dear Leader to the Dear Leader retirement home, one and for all.

Pushing Back on "Cut and Run" With A Sharper Knife

2006-06-20T22:11:00.000-07:00

In a fair fight, both sides bring similar tools for attack and defend. Switchblade or zip guns. ICBM's facing each other across the polar icecap.

The same should hold true in the verbal spree taking place in Congress this week. This season, a certain group of supports of the war in Iraq have chosen to use the pithy word weapon, "cut and run," as in those "cut and run democrats."

While all the answers to the conflict on the ground in the distant IED-infused road sides of Iraq may be far from clear, the fair fight of words here cries out for some tighter words to fight back with now, better than "we need a timetable for withdrawl," if only to keep both sides honest.

Here is one suggestion:

"Cut and run," they say.
"Reckless with the blood of our children," say back.

Say it enough times, and it seems to have some bite to it. I especially like the way the "R" jumps out.

This can lead to a different way to draw the lines of debate. To fight over "a time table to withdraw the troops back home" is likely a loser, at least for people in Congress. They know troop deployments, at this stage at least, need to be owned by the commander in chief and his generals. For better or worse, Congress can't do much their, once it has issued cart blanche for the war. Should the troops be home again? Should they be "re-positioned" to safer bases in Iraq, or in the middle east? That's a field commanders call.

But our representatives can insist that 2,500 dead and 25,000 severely wounded is enough blood. By the end of this year, the President shall take steps to get the bloodshed in line with peace keeping levels. What's that in hard numbers? Who knows, One or two a month sounds about right to me, but I suspect the American people will know it when they see it.

The counter-attack to this will be a claim that it might invite attacks intended to kill our troops. Such a claim is foolish on the face of it. As any parent who has lost a child over there knows, the attacks are already happening, more each year, each month, each day. Thousands upon thousands are ready and able and trying hard to "kill the crusaders." We need to stop driving up and down roads filled with snippers and bombs each day if we expect a different outcome.

Our troop's mission needs to move from daily war fighting to something much less bloody. If there are places where the violence is so great that we must take many casualties, perhaps those are the places where we should be putting the Iraqis in charge. Is this cowardice? Not a chance. How smart is it to stick your face into the buzz saw of incipient civil war at a tactical level? Whose kidding whom? What about the claims that Americans can't take the casualties needed to accomplish the mission? We've taken them, that's been done, we'll get no more extra credit for 3,000 dead, or 5,000, least of all from the Muslim world now.

Now it's time to get smart about our sacrifices, and to see that any new blood spilled to create a nation here is Iraq blood. That's the only brand that counts anymore, the only brand the locals will put enough value on the make the sacrifices they need to make to shut down the violence. That branding issue, that's why they call it civil war.

And if the new Iraq government needs us to drop a 500 pound mention on the head of the next Zarkcowi? Send us the GPS coordinates, we'll be happy to oblige. Need the very occassional battalion strike to flush out a very nasty nest of killers around Falugia? OK, perhaps we can help, if you guys sent along a dozen battalions as well. Looking for someone to stand on a street corner in Ramadi and keep an eye on things? Time to put in Iraqi face on that mission profile.

That's a model that Americans can understand. And those politicians who say otherwise, are reckless with the blood of our children.