Warning! Warning! Warning! Cheap Attempt At Humor Ensues!

As the newly Republican dominated House started Presidential impeachment hearings, the Department Of Justice announced criminal investigations of the spending of large amounts of money by deceptively named organizations to influence the elections of these representatives.

The DOJ is investigating whether or not there had been any illegal coordination between the organizations spending the money and the candidates themselves.  Such a violation could lead to bribery charges and long prison sentences for the guilty.  The Supreme Court will then decide if buying the impeachment of a President could be classified as treason by either the buyers or the sellers or both.

The impeachment hearings were quickly ended when the majority of Republicans found no grounds for impeachment.

I hope that the above warning was enough to help you judge this article.

Warning! Warning! Warning! Satire Ensues!

Today, President Obama vowed to veto any tax cut extension bill that includes extending the tax cut for the wealthy.

He said he very much wanted to extend the tax cuts for those making less than $250,000 a year, but in all good conscience he could not allow the inclusion of the tax cut for the wealthy.  The need to cut trillions of dollars from the deficit over the next decade mandated the ending of the tax cut to people who didn’t desperately need it.

Although letting the tax cut for the middle class expire might have dire consequences for the recovery,  the consequences of extending the tax cut to the wealthy would be far worse.

The Republicans caved into this firm stance of the President and passed a bill in the House of Representatives and in the Senate that did not include the extension of the extra tax cut for the wealthy.

Don’t get your hopes up for such a story to be true.  I just made it up as an example of how the tax cut extension could be handled.

Is it possible my wish could come true? Since posting the above wish, I read the article Henry in the House: Tax man (compromise) cometh By Ed Henry.

I hadn’t known that the initial report came from Huffington Post.  Is it any wonder that I no longer read the Huffington Post?

The warning at the beginning of the post was added because one of my satire challeneged readers was offended at the lack of warning.

McClatchy News web site has the article, How China Policy Squeezes Companies Anchored In U.S.

“The United States faces the lack of a national and international trading strategy, or economic policy . . . we as a nation don’t have an entity that competes with other nations, and I think this harkens back to a reluctance to get into national economic policy or strategies because of the concern that it has the taint of some kind of government control and government assistance,” he said.

The free-trade debate gets bogged down in political labels, which O’Shaugnessy thinks misses the broader point.

“So you have got ‘socialists’ fighting the ‘capitalists,’ and neither side realizes the mercantilists are kicking their ass. Both of them, it doesn’t matter whether you are on this side or that side, if you are dealing with a mercantilist society, and that’s what we’re fighting in China,” he said.

While I agree that the U.S. could benefit from strategic thinking, I also warn that we need to do it with some humility.  Japan was beating us severely 20 or so years ago because of their strategic efforts of their Ministry of Trade and Industry. This ministry came up with the idea of the 5th generation computer strategy to emphasize artificial intelligence.  It turned out to be a poor strategic choice.  The diverse efforts of private companies in the U.S. tried many different things including artificial intelligence.  I think the internet, the web, inexpensive computer chips, and mobile communication and computing  did a lot more to stimulate the world economy than the efforts in artificial intelligence.

It’s not that the U.S. companies were smarter at predicting the technologies of the future.  It is that the diverse set of U.S. companies and diverse venture capitalists were trying many different things.  Of that broad set of initiatives, some really bore fruit and established the rapidly growing industries that fueled economic growth around the world.

Just as in investing and agriculture, diversification in industry has a lot of benefits.

Fitting in with my new emphasis on this blog of the perils of extremism,  I am making the point that neither extreme laissez-faire in industrial strategy nor extreme centralization of industrial strategy is the best policy. Intelligent approaches are better than doctrinaire approaches.

Why does the commission recommendation include changes to Social Security and Medicare, when just undoing George W. Bush would bring a 75% larger reduction in the deficit than the commission is getting with their drastic plan?

The Los Angeles Times has the story Panel: Deep cuts, new revenues needed to balance budget.

The plan calls for $200 billion in domestic and military spending cuts in 2015, a down payment on cuts that would reduce the deficit by nearly $4 trillion through 2020.

In a report Critics Still Wrong on What’s Driving Deficits in Coming Years Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers by Kathy Ruffing and James R. Horney of the Center On Budget and Policy Priorities take a different look at deficit reduction

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. 6 (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1).

The article, Ten Lutchen Fellows Share Research Highlights, on the Boston University web site was sent to me by a proud aunt of one of the recipients.

Samuel Hoffman (ME, EE’12) highlighted his efforts to optimize the design of a “polymorphic zoom” system that improves the optical performance of standard zoom lenses.

I couldn’t figure out whether to put this on my blog here or on my famous relatives page.

I have always wondered how we might get from the typical spherical lens with its aberrations to a more parabolic lens without those aberrations.  I can hardly wait to talk to Sam about whether his research is leading in that direction.

You get into very interesting discussions on the Worcester T & G comment boards.

Finally, the discussion devolved into something I have heard from other Faux Noise devotees.

Otis-

This is getting tiring. You keep lumping political pundits and the ‘news’ section into one. Show me a LIE from the news section and then we can talk. Don’t send Youtube links of Bill O’Reily and Sean Hanity. These two have full disclosure that they are pundits that are giving their opinion of the news.

Posted by Tomass

So I entered something like “Fox News Lies” into Google and posted just about the first item I came to.  (The first few minutes does seem to focus on O’Reily and his ilk, but then it gets to the so-called straight news sections.)

Actually part 2 may be the more devastating of the two parts.

In his acceptance speech as the 1964 Republican Presidential candidate, Barry Goldwater said:

I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!

The public brouhaha over this statement contributed to Goldwater’s resounding defeat.  What did the voters of 1964 understand that we are losing sight of today?  I think it is the fact that extremism is the problem.  It helps the country to have competition of ideas between a conservative and a liberal philosophy until you add the adjective “extreme”.

This epiphany came to me while thinking about what I was reading in the book The Shock Doctrine: The Rise of Disaster Capitalism. The book documents the results of applying an extreme free market philosophy to a people who don’t want such a system.  I recognized that the excesses that the dictators in these countries went to had a mirror image in the excesses of the USSR, China, Cuba, and other countries on the left.  The common factor between these two was extremism.

Both sides had a utopian view of how great the world would be if a pure version of their particular model of the society/economy were implemented.  These utopian systems always have a consistent inner logic to the description of how they work.  Unfortunately, the inner logic usually leaves out an understanding of the way humans actually behave.  Because people did not actually behave the way these utopian dreamers believed that they should, the systems had to be implemented via force and extreme brutality.

In 2010, I believe that this country faces more problems from extremism on the right than it does from extremism on the left. Of course, neither extremism is good.

The extremist leaders of the Republican Party have succeeded in scaring people about the problems of extremism on the left.  Though they accuse President Obama of being a left wing extremist, he is nothing of the sort.  In their fear of extremism on the left, the American voter seems to be fleeing into the arms of the extremists on the right. This rush can be likened to the Stockholm Syndrome as described in the article, Were American Voters Victims of the Stockholm Syndrome in 2010?

I was thinking of the health care reform issue in light of this argument about extremists.  The right fears a takeover by the government of all health care.  I was thinking that if the private insurance companies cannot compete with the public option, then the private sector might just wither away as the Republicans fear.  Then I thought of the problem of a completely government run system being subject to the funding whims of the body politic.

That is when I realized the beauty of a mixed system.  The private health care and insurance competing against various options involving more or less government intervention. It is the competition, if it is fair, that keeps things in balance.  If the government does something that is better than the private system, then the private system will have to adapt if it wants to keep its customers.  On the other end, if the government starves its health care options of the funding that it needs, then customers will drift back to the private options.  The mere existence of the competition tends to keep the systems racing to the top rather than to the bottom.

This balanced system is exactly what Barack Obama had in mind.  The Repubicans who tend to think only in terms of extreme free market or extreme government control, used rhetoric to convince many people that the President wanted a complete takeover of the system by the government.

In program after program, regulation, bank bailouts, auto bailouts, economic stimulus, the Republicans only see extreme options.  The President sees balanced options.  The American voter has been scared into looking at it from the Republican extremist position.  The Democrats share some of the blame by not making sure the public understood that they were not proposing extreme solutions.

The extremists on both sides decry the fact that the two political parties are not extremely different enough.  Actually, when the parties are not too extreme this is the sweet spot of governance for this country.  This is this country’s genius.

Jonathan Weil wrote the commentary, Bank of America Edges Closer to Tipping Point, which I found on the Bloomberg web site.

Judging by its shrinking stock price, though, investors are acting as if Bank of America is near a tipping point. Its market capitalization stands at $115.6 billion, or 54 percent of book value.

The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet is that it’s largely impenetrable. Some portions, though, are so delusional that they invite laughter. Consider, for instance, the way the company continues to account for its acquisition of Countrywide Financial, the disastrous subprime lender at the center of the housing bust, which it bought for $4.2 billion in July 2008.

Here’s how Bank of America allocated the purchase price for that deal. First, it determined that the fair value of the liabilities at Countrywide exceeded the mortgage lender’s assets by $200 million. Then it recorded $4.4 billion of goodwill, a ledger entry representing the difference between Countrywide’s net asset value and the purchase price.

That’s right. Countrywide’s goodwill supposedly was worth more than Countrywide itself. In other words, Bank of America paid $4.2 billion for the company, even though it thought the value there was less than zero.

Since completing that acquisition, Bank of America has dropped the Countrywide brand. The company’s home-loan division has reported $13.5 billion of pretax losses. Yet Bank of America still hasn’t written off any of its Countrywide goodwill.

Consider this post along with my previous post, Financial Improprieties Abound as Stocks Rally. I hope there won’t be any buyer’s remorse when the Republicans in the House get to deal with the second leg of the impending banking disaster.  Nah, the voters will just blame Barney Frank.

You might also want to consider The Best Way To Rob A Bank Is To Own A Politician,

After my experience in the US Army back in 1967-1969, I came away with the conviction that every citizen should experience being in the military.  I figured that about two weeks of that experience would give you all you needed to know.  More than that was unnecessary.

In basic training we were explicitly told that the purpose was to break us down so that we could be rebuilt as soldiers.  It makes sense if you think about the need to get rid of the ordinary human resistance to killing another human being.  Of course demonizing the enemy was only part of the process.

I resisted such indoctrination, but I realized that in resisting it, I would fail to become an effective fighting man.  Thank goodness I was permanently assigned to Frankford Arsenal in Philadelphia, PA. Had I been sent to Viet Nam, I probably would have gotten myself killed in the first 15 minutes of an engagement with the enemy.

However, people returning from war who had been turned into effective soldiers have a real problem.  How do they get back their civilian minds that were broken down by the military training? It wouldn’t surprise me that this struggle is not always waged successfully. After all there are no 8 weeks of training at the end of a military career to undo what was done in basic training at the beginning of that career.

I don’t want to detract from my previous post, Reconsidering George Bush’s Memoir, by leaving the impression that my Army experience is the only one I had to justify the  following comment that I made in that post:

If you read the book “The Shock Doctrine” you will learn how the idea of destroying a person’s mind came to be an acceptable goal in psychiatric circles. I know some of this information first hand without having to have read it in the book.

What I have written is not a criticism of the basic training in the army. I stated why I knew it was necessary. Also note that I am not making a special criticism of the U. S. Army.  That is the only military experience that I have.  I don’t imagine it is any different in any other military organization because of the military necessity of training an effective fighting force. However, it is important that the military and the citizens who delegate the job to them understand the full consequences of sending people off to war.