Monthly Archives: January 2010

Federal Budget Outlook 2010 to 2020

Follow this link to the analysis by the Congressional Budget Office.

This report has interactive graphs that let you see the impact of various proposed policy changes.

Despite what you may have heard from the sound bites in the news media, the interpretation is not nearly as gloomy as you might think.

The important caveat that hardly ever gets mentioned in the media  is stated in the executive summary:

Those estimates are not intended to be a prediction of actual budget outcomes; rather, they indicate what CBO estimates would occur if current laws and policies remained in place. Toward that end, CBO’s projections presume no changes in current tax laws or spending programs.

The  stimulus plan is and always has been part of a strategy to run deficits when in recession and run surpluses when the economy recovers.  None of the administration plans to reduce the deficit are baked into the CBO plan.

The CBO projections also use an estimate of the economic growth rate into the future.  The growth rate experienced in the just ended 2009 fourth quarter was at least 50% larger than anybody’s wildest dreams.  (I know there were one time things that made it possible, but there can always be one time things, though what they are changes with time.)

The Bus Is Stalled On The Tracks And The Train Is Approaching

Let me propose a little analogy comparing  the current Congressional impasse with a stalled bus.

The bus is stuck on the railroad tracks and the train is approaching.

The majority want to push the bus forward to get it off the tracks. The minority say, No, push it backward. We won’t even help if you decide to push it forward. If we tried that, you might learn we were right, and then try to push it the other way. We don’t care. We don’t even want to try your way to see if you are right. We have just tried our way with your help and it didn’t work, but if we try it again we are sure it will work this time.

So the bus stayed where it was, the train hit it and derailed, the toxic cargo spread over the town and all were killed. In heaven, the minority said, See you should have tried it our way one more time. I leave it for you to fill in God’s reply.

I was once in a work group where there were two opposing plans to proceed. One got the go ahead and the other did not.

The losing plan was to proceed along a more traditional course. The proponent of the losing plan did not give up. He went up the chain of command pleading his case. He was rejected at every turn.

Would the group have been better off had he contributed his considerable talents to the effort that the group embarked upon? One can only presume so. He never gave up and never contributed much after that.

Even if he had been right, if he had helped the group proceed along the wrong path, they might have found out it was wrong sooner and the plan could have switched to the other tack.

Well, it is 27 years later and the results are in. An entire industry has been built around the path that the group did take. In fact the very computer you are using to read this message was designed with software that followed this successful path. There were advances made with the chosen approach as the foundation that were not even dreamed of 27 years ago.

The Republicans may be right or they may be wrong, but they refuse to let the majority even try their plan. Moreover, the evidence of recent history suggests that the Republicans are wrong. The current balance of power in the executive and legislative branches seems to indicate that the electorate disagree with the Republicans.

The very religious-like zealotry of the Republicans and their supporters is starting to be a major roadblock to progress in this country. (Did I say starting?)

Even worse, we have had years of trying the Republican way and it has proven to be an utter failure. Yet, the Republicans insist that they know best and they will continue to throw monkey wrenches into the gears to stop anyone from trying anything else. (Tradition!. I just watched Fiddler On The Roof again yersterday.)

Despite what Republicans may think, the Democrats are merely saying that the plan we have laid out is the best one that we can think of at the moment. As we implement it and gain experience with it, we will learn how to tweak it or discard it. The Republicans just say, no, we will not allow any progress in any direction at all, but our direction. We will not allow any learning. We will not allow any motion, but in our chosen direction.

In fact they seem to think that God is telling them what to do.

I once had a boss put me on a project that I was sure could not be made to work. I said to myself, I’ll show you. I’ll write all the software as you suggest so that I can show you it won’t work. Was I surprised in the end when it did work.

Years later I was on the other end of the decision making. I wanted a person in my group to work on a certain project that he thought was impossible. I said to him, Let’s go through all the reasons why you think this won’t work. Just to humor me try to come up with the best idea that you can to overcome each roadblock. After that exercise he concluded that it just might work. His efforts succeeded. That approach is now also very popular in the industry. In fact I got 6 years more work out of applying that idea in another company.

I then got another 6 more years of work at another company working on a project that was only conceived after the demonstration that the first idea could be successful. At the same time all the competition were working on the same idea.

It was 1967 or 1968 when I was traveling back from Cambridge, Massachusetts to Lowell. There was a severe blizzard going on. As I pulled into the entrance ramp to I-93, there was a line completely stalled because of the snow. I pulled up to the end of the line. I got out of my car to see what I could do to extricate myself from the situation.

As I did that another car pulled up and that driver got out to survey the scene, too. I started a rapid fire set of suggestions as to things we could try. Finally, he said, Shut-up and let me think.. So, I did.

Six more cars drove up to the end of the line and that is all she wrote. Eventually we were evacuated by a firetruck that was driving down I-93 picking up stranded motorists.

Two days later, I was able to go back to the scene and get my car out.

Pumping Of A Swing

In a message board thread in response to a Worcester T & G Political cartoon, I was explaining why stimulus aid from the federal government to state and local governments was beneficial.

Unlike state governments, the federal government is allowed to do deficit spending.

This is a time shifting mechanism that allows the money to be spent when it is needed and the taxes to be collected when the economy can afford it.

The states have no legal means for such time shifting strategies. The states are also too small by themselves to do this in such away that the feedback on the global economy is beneficial.

The federal government which is all 50 states acting together can do this.

We are in this mess because the former government time shifted spending and taxes in exactly the wrong way. They refused to collect taxes when the economy could afford it (in fact the economy needed a LITTLE draining to prevent the bubbles.) This former administration also spent when the economy didn’t need it, thus competing with the private sector.

When properly done the government spending fills in for weak private spending and then retreats when private spending is strong. When done bass ackwards, the policy is a disaster. In future histories, the recent past Republican administrations will be used as prime examples of how to mess it up.

Listen to President Obama’s recent public conversation with the Republican congressional conference to learn about the two ways to run things.

It then occurred to me that a playground swing is a perfect example of when doing something at the right time is beneficial but doing the same thing at the wrong time gets you nowhere.

I thought about the actions that you take to get a swing moving. If you do those actions at the wrong time, you don’t move. I figured someone on the web has already looked into this.

Follow this link to a fascinating explanation including videos of experiments to show you why you can get a swing to swing.  I took a physics course or two in my life ( to put it mildly ) and I must admit it took looking at the videos to fully digest the early parts.  I learned a thing or two.  I don’t know if the non-physics oriented person will be able to handle the heavier explanations at the end.  Give it a try anyway.  The videos are great.

The President Holds an Open Discussion Across the Aisle

Read the Transcript  |  Download Video: mp4 (671MB) | mp3 (79MB)

Visit the White House Blog for links to the President’s YouTube Question and Answer Session.

The President will respond to your questions in a live YouTube interview at the White House on Monday, February 1st, at 1:45 p.m EST. Submit now, and vote often. The deadline is Sunday at 8 p.m. EST.

Weekly Address: Reining in Budget Deficits

The President pledges to rein the deficit, citing three specific steps to this end. He praises the Senate for restoring the pay-as-you-go law, discusses his proposal for a freeze in discretionary spending, and calls for a bipartisan Fiscal Commission to hammer out further concrete deficit reduction proposals.

Read the Transcript  |  Download Video: mp4 (148MB) | mp3 (5MB)

Krugman-March of the Peacocks (Dysfunction Junction)

In the 29 January 2010 NYT, Paul Krugman writes in March of the Peacocks about the dysfunction of our current political state.

The nature of America’s troubles is easy to state. We’re in the aftermath of a severe financial crisis, which has led to mass job destruction. The only thing that’s keeping us from sliding into a second Great Depression is deficit spending. And right now we need more of that deficit spending because millions of American lives are being blighted by high unemployment, and the government should be doing everything it can to bring unemployment down.

In the long run, however, even the U.S. government has to pay its way. And the long-run budget outlook was dire even before the recent surge in the deficit, mainly because of inexorably rising health care costs. Looking ahead, we’re going to have to find a way to run smaller, not larger, deficits.

How can this apparent conflict between short-run needs and long-run responsibilities be resolved? Intellectually, it’s not hard at all. We should combine actions that create jobs now with other actions that will reduce deficits later. And economic officials in the Obama administration understand that logic: for the past year they have been very clear that their vision involves combining fiscal stimulus to help the economy now with health care reform to help the budget later.

The sad truth, however, is that our political system doesn’t seem capable of doing what’s necessary.

On jobs, it’s now clear that the Obama stimulus wasn’t nearly big enough. No need now to resolve the question of whether the administration should or could have sought a bigger package early last year. Either way, the point is that the boost from the stimulus will start to fade out in around six months, yet we’re still facing years of mass unemployment. The latest projections from the Congressional Budget Office say that the average unemployment rate next year will be only slightly lower than the current, disastrous, 10 percent.

Yet there is little sentiment in Congress for any major new job-creation efforts.

Meanwhile, health care reform faces a troubled outlook. Congressional Democrats may yet manage to pass a bill; they’ll be committing political suicide if they don’t. But there’s no question that Republicans were very successful at demonizing the plan. And, crucially, what they demonized most effectively were the cost-control efforts: modest, totally reasonable measures to ensure that Medicare dollars are spent wisely became evil “death panels.”

So if health reform fails, you can forget about any serious effort to rein in rising Medicare costs. And even if it succeeds, many politicians will have learned a hard lesson: you don’t get any credit for doing the fiscally responsible thing. It’s better, for the sake of your career, to just pretend that you’re fiscally responsible — that is, to be a deficit peacock.

So we’re paralyzed in the face of mass unemployment and out-of-control health care costs. Don’t blame Mr. Obama. There’s only so much one man can do, even if he sits in the White House. Blame our political culture instead, a culture that rewards hypocrisy and irresponsibility rather than serious efforts to solve America’s problems. And blame the filibuster, under which 41 senators can make the country ungovernable, if they choose — and they have so chosen.


Whip Congress For A Public Option

I received an email about Representatives Chellie Pingree and Jared Polis who stood up to demand the Senate pass a public option using budget reconciliation.

Follow this link to see the Pingree/Polis letter to Senate Majority Leader Harry Reid.

In the link to the current set of 64 supporters, I found some interesting names from the state where I now live and from the state where I lived before this one.

Rep. Michael Capuano    MA-08   Supporter
Rep. Bill Delahunt      MA-10   Supporter
Rep. Barney Frank       MA-04   Supporter
Rep. Ed Markey          MA-07   Supporter
Rep. Jim McGovern       MA-03   Supporter
Rep. John Olver         MA-01   Supporter

Rep. Earl Blumenauer    OR-03   Supporter
Rep. Peter DeFazio      OR-04   Supporter
Rep. David Wu           OR-01   Supporter

Way to go Michael Capuano, my preference for the Democrat who should have won the primary for Massachusetts Senator in the recent special election.

I note that David Wu was my representative when we lived in Oregon.

In the post Going Nuclear – Path To Passing Health Care Reform, I noted my telephone call to Richard Neal.

Rep. Richard Neal       MA-02   Unknown

I just made another phone call. In a voice mail message to Rep. Neil’s chief of staff, Anna Jablon, I noted the Massachusetts Democrats who had already signed on.  I said I would like to see Rep. Neal’s name on the list.

Here is the email I mentioned above:

Steven –

Just two days ago, Representatives Chellie Pingree and Jared Polis stood up to demand the Senate pass a public option using “budget reconciliation.” To make sure they’re voices are heard with as much force as possible, they’re asking House Democrats to join them by signing on to a letter to Senate Majority Leader Harry Reid demanding it.

Thanks to their leadership and the thousands of phone calls from members of Democracy for America, the Progressive Change Campaign Committee and CREDO Action, now 64 House Democrats are demanding the Senate take action.

These 64 Healthcare Heroes are a powerful force, but we must not stop now. We need to call every single House Democrat and get them on board.


Speaker Nancy Pelosi says the House Democrats don’t have the votes to pass the Senate healthcare bill without changes. The media continues to report that Democrats in Washington can’t figure out the way forward since the loss of Ted Kennedy’s Senate seat.

But these 64th House Democrats are fighting for a plan that would get the job done and deliver the votes needed to pass real reform. The strategy is working. This morning’s 64 signer to the letter was Representative Scott Murphy from New York, who voted against the House bill last year, proving we’re not just fighting for real reform — we’re delivering the votes to win.


We hear people all the time wondering if making a phone call even works. It’s a good question; fortunately the answer is a resounding YES. Don’t believe me? After California Congressman John Garamendi signed onto the letter, his office had this to say to the press:

“When the phone calls started pouring in, it helped alert us to this letter. Now it’s yet another way for the Congressman to fight for the public option.”
– Spokesman for Congressman Garamendi

Our strategy is working. Keep building on the momentum. Please make your call now.


Charles Chamberlain, Political Director
Democracy for America

Democracy for America relies on you and the people-power of more than one million members to fund the grassroots organizing and training that delivers progressive change on the issues that matter. Please Contribute Today and support our mission.

Paid for by Democracy for America, and not authorized by any candidate. Contributions to Democracy for America are not deductible for federal income tax purposes.

How Not to Counter Terrorism

Follow this link to the story How Not to Counter Terrorism by Ex-FBI Agent Coleen Rowley and Other Intelligence Veterans January 14, 2010 (Originally Posted June 18, 2007)

This is yet another story that adds fuel to my observation that fixing the failure to analyze massive amounts of data is not done by increasing the amount of data. This was part of my comment in the previous post Consider How Well We’ve Done Against Terrorism Since 2001.

Also in the article they mention that one of the reasons for the FBI having a 10 Most Wanted List, is to have a way of focusing on what they consider to be the most important cases and not try to concentrate their resources on everything.

This reminds me of a situation that I observed when working for a semiconductor company in Texas.  We had a pilot line that processed integrated circuits that were being designed by our development engineers.  There were certain projects that were very important and time sensitive.  These were put on the priority list of the pilot line so that these devices could be processed ahead of other items that were before them in the queue.  Soon pretty much everything was on the priority list.

In response to this a hot list was put in place for the truly important projects. When everything got onto the hot list, they just changed the name again.

If they had thought of a top ten list, there just would have be item 1, item 1a, etc. until everything was on the top 10 list.

This behavior is just human nature. The reactions to this were just management’s human natured response to try to get ahead of the engineers’ human nature. It is a never ending battle to try to remember that there are priorities and not everything can be an emergency.

Of course a real top 10 list enforced by really strong management would have insisted that if a new item went on the top 10 list then an item that was already on the list would have to go. This would have forced people to make a decision when it is much easier to avoid making decisions.  The department could have ground to a halt with constant meetings about juggling a real top 10 list.  Sometimes it is just easier to pretend than it is to fight human nature.

State Of The Union Address – 2010

Read the Transcript  |  Download Video: mp4 (865MB) | mp3 (64MB)

RicardoH, the alter-ego of RichardH, sent an email with his analysis of the address. If you want to see it, I guess you’ll have to beg him to post it here.

I answered RicardoH’s question about my take on the speech with the following email reply:

We watch all of these things on CSPAN. We also turn off the TV after the event is over so that we do not listen to the phone calls that they take afterwards.

I don’t need no stinkin talkin heads to tell me what I just saw or what I thought about it.

We were very much pleased by the address. Emmie really should have watched. It sounds like she could have used the pick-me-up.

We were waiting for him to say, OK, Senate, the House is doing its jobs, so get off yer arse and get moving.

As I have been doing in several places, he explained the plan – We do deficit spending until the economy recovers and then we pay back what we borrowed and then some. This is a nice counter to all the naysayers who are complaining that our children and their children will be paying for this deficit for generations. He stated the positive case for the plan on his terms rather than countering the naysayers on their terms. Is this putting the right framing to the issue? Or, as I like to say, force the opposition to debate your issues rather than debating their issues.

I wonder if Martha Coakley noticed the difference.

He should have added that this paying back what we borrowed is exactly the action we must take to prevent the next bubble. So it has this additional virtue besides just paying our debts.

It was way into the speech and I kept waiting for it, but he did finally get to the point that health care reform (or whatever words he used) is part of deficit reduction, not part of the deficit problem. Another example of getting the debate onto his turf and away from the opponent’s turf.

I am not saying that this idea of refocusing the debate is my idea that somehow Obama has picked up on. In fact, just the opposite. I identified what it is that Obama does to make his rhetoric so effective, put it into words that I can understand, and have tried to adopt this approach whenever I have enough self-awareness to control my words.

Toyota Sales Halt Raises Quality Questions

This morning when I posted this item, you could read the entire WSJ article without having to register or sign in.

Now you seem to get only a couple of paragraphs. Maybe they didn’t like my backhanded compliment about their news compared to their editorials. 🙂

The article is now listed as subscriber content. If this is really the new model for accessing the WSJ on the internet, then I won’t have to feel guilty linking to them anymore. I just won’t do it.

I have sort of boycotted such practices in the past. I am hoping that sites that take this attitude measure how many hits they get on the preview and how few follow-ups they get to the subscriber only content.

This is the usual battle over price between the seller and the buyer. I don’t know which side is going to prevail, but I am going to hold out as long as I can. I’ve pretty much done without the WSJ for close to 67 years. I can probably hold out a little longer.

Follow this link to the AP version of the news story. You get much of what the WSJ reported in this version of the story.

Follow this link to an article in the Wall Street Journal that explains the issue with the sticking gas pedal.

Beginning in October last year, Toyota became aware of sticking accelerator pedals in the U.S. and Canada. The company realized that the material used in the gas pedals was the same as in Europe, prompting last week’s U.S. recall, according to Toyota’s submission to NHTSA.

While the editorials in the WSJ are obviously biased and penned by ignoramuses, I find the news stories usually to be amazingly bias free.  This seems to be a news story and not an editorial.