The Real News Network has a multi-part interview about American Exceptionalism. As of this writing, only three parts have been aired.

When President Obama spoke at the United Nations, he again said (’cause he had said before) that he considered America an exceptional country. He called it “exceptional”. And I’ll play that quote for you in just a few minutes. But, of course, he’s not the first one to have said that. This idea of American exceptionalism, according to many, goes to the very heart not only of American foreign policy, but of American identity itself.

American Exceptionalism and US Imperialism – Pt1

Obama Embraces American Exceptionalism – Kuznick Pt 2

American Exceptionalism: Doing Bad Things for “Good Reasons” – Kuznik Pt3

The worst part of this might be President Obama’s modeling of doing bad things for good reasons. Perhaps he did learn something from the bad reaction he got when he tried to fight the ingrained idea of American exeptionalism. What he may have learned is that it is very hard to go against what people firmly believe, so it is best to try to harness their ignorance for good purposes. Perhaps the President achieves some temporary victory from this sly trick, but the eventual blowback will be devastating. Then the next person to come along and try to educate the people will inevitably learn the same lesson that Obama did. Maybe this is what causes the decline and fall of great nations.

2013/10/20

Here is the last part of the series.

Does American Might Prevent Global Chaos? – Kuznick Pt 4.

KUZNICK: Except that people are learning the lesson of that. If you look at the recent statements by Robert Gates–Gates is one of the architects of the American empire for decades. First he screwed up the intelligence agencies. He was behind the reform of the CIA. And he’s a real planner of the wars and empire for a long time, the head of the CIA, head of the Defense Department. He came out a couple of years ago saying that if an American secretary of defense advises a president to invade another country in Asia or Africa or Latin America, he should have his head examined. But he came out more recently saying after Afghanistan, Iraq, and Libya, that anybody who supports another American military intervention, as in Syria, is crazy.

He says that because what he realized that other people realize is that we create the chaos. He says, we don’t ever know what the unintended consequences are and that what results from these interventions is chaos. We’ve–look at the chaos that exists now in Iraq. Did we leave that a peaceful place? Of course not. So people might make the assumption that what we’re doing is better than chaos, but the reality is we create chaos. We don’t know what the ramifications are. We don’t understand the situations. George Bush doesn’t know the difference between Sunnis and Shiites when we go and start this kind of “crusade,” which he called it.

The Real News Network has the video interview The Tea Party and the Suppression of the Left.

WOLFF: I think the Democratic Party bears a major responsibility for the success of the Tea Party. And when they berate the Tea Party and denounce it, there’s something peculiar, since they’re so complicit in this situation. You’d look long and hard in the history of the Democratic Party over the last 50 years to find a word of criticism of capitalism as a system. The Democratic Party avoids it. The Democratic Party joins in pretending that a political solution is adequate to deal with an economic system that has now collapsed twice in the last 75 years.

You know, I’m part of economics profession. We didn’t as a profession foresee this crisis. We didn’t imagine it would cut so deep. We didn’t imagine it would last so long. And we didn’t understand that it would resist the conventional fiscal and monetary policies that we’d been telling our students are more than adequate to manage capitalism.

Sarcasm Warning – there is some sarcasm in my comments below. If you are unable to detect it, you might be misled by what I am saying.

Well, I still hold onto some of the left wing economics I was gullible enough to believe when I was taught it in college. Apparently President Obama was not indoctrinated enough in his college career. He was educated in the age where the anti-left propaganda began to become dominant.

Sarcasm Warning rescinded.

Because of the strength of the political opposition and the lack of his own commitment, President Obama accepted a fiscal stimulus that was only about one-third the size that was needed. Economists were warning him of the inadequacy at the time. This weak stimulus was wonderful for the Tea Party financial backers exactly because its partial success saved them from a depression like the one that drove them from office in the 1930s, and its inevitable failure to restore full employment could be used to discredit the very idea of stimulus.

I think Wolff’s accepting the blame for the failure of the Economics profession is also playing into the hands of the Tea Party.

It is only the faux solution of the far right wing economics of Milton Friedman that ever thought that monetary policy as exercised by the Fed recently that could ever be a solution to the current economic problem.

All the economists who were onto Friedman’s deception have said that in this world of heightened economic inequality and consequent disappearance of consumer demand, monetary policy is like pushing on a string to get the economy moving. The more you push on the string, the more tangled it gets, but the economy is not moved.

If and when the economy does start to turn around, the frantic effort to pull the slack and tangled monetary string taut again may be impossible to do fast enough.  Let’s just hope that Janet Yellen is up to the job.

For those who are into engineering analogies, you might want to think of bang-bang controllers. Maybe good for furnaces and water heaters, not so good for the economy.

The difference between a large tub of water and an economy is in response rate. The water changes its temperature slowly through the range of the bang-bang controller. The economy starts to change slowly, too, with bang-bang controllers. However, once the economy reaches a tipping point, it can start to react faster than anyone imagined. As Taleb would say, one system is linear and the other is non-linear.

Rand Paul, Ted Cruz, and Marco Rubio — Tea Party darlings and aspiring presidential candidates — all voted to shut down the economy.

This is from an email I received from the Democratic Party.

The New York Times has the story A Regulator Cuts New Teeth on JPMorgan in ‘London Whale’ Case. The agency is the Commodity Futures Trading Commission.

The agency’s authority to bring such a case traces to Dodd-Frank. For years leading up to the law, the agency was hamstrung in its pursuit of market-manipulation cases. Under existing laws, it had to prove that a trader intended to manipulate the market and successfully created artificial prices.

Even when cases were filed, they rarely panned out. In fact, according to Mr. Chilton, the agency has successfully litigated only one manipulation case in the agency’s 38-year history.

But under Dodd-Frank, the agency must show only that a trader acted “recklessly.”

“In Dodd-Frank, Congress provided a powerful new tool enabling the C.F.T.C. for the first time to prohibit reckless manipulative conduct,” David Meister, the agency’s enforcement director, said in a statement on Wednesday.
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Homing in on one day in late February 2012, the agency’s order exposed a series of questionable trading practices at the bank’s chief investment office in London.

The traders, seeking to minimize losses and vowing to “defend the position,” sold more than $7 billion of credit default swaps to hedge funds and other traders on Feb. 29.

It was a “staggering, record-setting volume,” the trading commission said. The sales, the trading commission added, “accounted for more than 90 percent of the day’s net volume traded by the entire market.”

The section of Dodd-Frank bill that was used in this case was championed by Senator Maria E. Cantwell.  It all started when women got the right to vote 1n 1920.  Elizabeth Warren is not alone in pushing for reform.

The first time the bear tested the bird feeder pole on October 12, she found that it was too hard to bring down to her level. After 4 days of consulting with more experienced bears, she came back. This time she had it on the ground in no time. Sharon didn’t actually see her bring it down, but she did hear it.

We were going to stop feeding the birds after they emptied the feeder, but the bear took care of it for us.

I guess I’ll have to go out there and do a failure analysis.

2013/10/17

Begin failure analysis.

Looks like multiple points of failure

Squirrel baffle may be beyond repair.

Pile of broken pipes

Iron pipe fittings just broken off.  What am I going to do with four concrete pilings of about 150 pounds each and four feet into the ground?

Talking Points Memo has the commentary and video GOP Senator Wants Cruz To Stand Down, Allow A Vote (VIDEO).

Sen. Kelly Ayotte (R-NH) said Wednesday that it’s time for Sen. Ted Cruz (R-TX) to shelve his intransigence and allow a vote on a plan to reopen the government and raise the debt limit.

Has the gravity from proximity to Massachusetts caused Kelly Ayotte to escape the orbit of the Manchester Union Leader?

The New York Times has the story 11th-Hour Senate Fiscal Deal in Works.  One caution that they noted was:

If Senator Harry Reid of Nevada, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader, reach a final accord, Senate leaders expect to use a parliamentary maneuver that will allow the majority leader to move the deal to the Senate floor quickly on Wednesday. With unanimous consent, a final vote would come the same day. But if Senate hard-liners object, the Senate will have to wait until Friday, then muster 60 votes to cut off debate. Further obstruction would delay the final vote until Saturday, when the bill would go back to the House.

Well, I think I am ready for the default.  Until we get an economic recovery, I am holding enough cash in my portfolio to make it through large market declines without having to touch the principle.  Due to circumstances unrelated to the troubles in Congress, I have a little more cash on hand than usual.  With this cash, Social Security, and dividend income, I think I could probably last for 2 years of market turmoil without any problem.

Of course, my intention is to never have to touch the principle.  The cash I am now holding is to guard against sudden drops in the dividend stream or even a suspension of Social Security payments.

For anybody reading this and planning a raid on my house, the “cash” I am “holding” is not at my house.

Upworthy has the video Congress Did Something So Spectacularly Creepy That It’s Too Unbelievable To Make Up.

On the House floor, Congressman Chris Van Hollen decided to get a clarification on the rules of the shutdown. Apparently, normally any congressperson can call for a vote on any bill at any time. But just before the shutdown happened, the GOP quietly passed a measure that said only House Majority Leader Eric Cantor can call for the shutdown to end (unless he gives a designee permission). Not even the most senior GOP congressperson, Speaker of the House John Boehner, is allowed to do it, without permission from his own guy.

Here’s the thing. Democrats are not always right. Neither are Republicans. The political system is messed up from top to bottom. But this is just crazy. The guy in charge of the GOP can’t end the shutdown. Watch and see. At 5:00, we get to the reality of the situation.

In a previous post The House GOP’s Little Rule Change That Guaranteed A Shutdown I only had a reporter’s word for it. I think the above video shows the reporter to be pretty accurate despite what some right wing fanatics would like you to believe.

If I get any response from said fanatic, I will post it here.

Response from said fanatic.

Well, let’s see… That makes the House rule equivalent to the rule in the Senate, which Harry Reid has been using with a vengeance, hasn’t he? Tell me, Steve, how many of the bipartisan House bills to fund all of the government, and bipartisan bills to find individual agencies, has Harry Reid allowed onto the Senate floor to come to a vote? Let me help you out. That would be zero, except for the death benefit bill he was shamed into bringing forward. Yes, you are absolutely right that the Republicans are playing hardball. Why would you expect any less when the Democrats, when they held the majority, played exactly the same sort of hardball and more to push through worthless stimulus spending and Obamacare?

Well, at least he isn’t denying the story is true, anymore. Maybe that’s progress.

The New York Times has the story Economists Clash on Theory, but Will Still Share the Nobel.

The two men, leading proponents of opposing views about the rationality of financial markets — a dispute with important implications for investment strategy, financial regulation and economic policy — were joined in unlikely union Monday as winners of the Nobel Memorial Prize in Economic Science.

Now you know the reason that when I publish the views of an economist, I rarely mention that they have won the Nobel Prize in Economics.   Of course, if I want to sully the reputation of the Nobel Prize, I will list all the wing-nuts who have won the prize.

In this case, I do not have to go any farther than what The New York Times has just said. (but of course, I just did.)

To put it another way, always remember that a person is great for the greatness of what the person did or what the person said.  The person is not to be judged great by the awards that have been given to that person.  The great actions or words did not become great because awards were given.  If we are lucky, some of the awards came because the action or words proved to be great in the judgment of history.  In many cases the Nobel Committee makes the awards long before we know the judgment of history.  Yes, I know, the same can  be said truthfully about recent awards of the Nobel Peace prize.

What both economists may be missing in their theories is that some actors in the market are acting with criminal intent. One way a con artist succeeds is by hiding information from the pigeon.

We know these people exist and can and do exert tremendous influence on the market. That seems to fly in the face of the efficient market theory as a general rule that holds under all circumstances. It also may temper the idea of irrational behavior in the market. The people pulling the con are acting rationally in their own interests. The people being duped by the con may be acting rationally based on all the information they have. Of course, just as in the case of the efficient market theory applying some of the time, the theory of irrational behavior is also true for some of the people, some of the time.

The trick with any model of human behavior is to know when the model does apply and when it does not apply.

The other way I have put it is that there are many opposing forces acting in the market at all times. The trick is to figure out what are the dominant forces at any particular time.

Sometimes there are two very large forces that oppose each other and almost balance each other out. The slightest miscalculation on the size of one or both of them can lead to huge errors in predicting what will happen. (Think of predicting the outcome in a a game of tug-of-war with a pair of well matched teams.)

As for a statistical method of moments to make up for missing information, one can immediately see the limitations when we are talking about large opposing forces that are nearly balanced.

Bill Moyers Essay: On the Sabotage of Democracy describes secession by another name.

If you doubt what Moyers is talking about, look at the flags that are being carried by the disloyal opposition.

I know these people are so frustrated, that they are trying to anger us. If I can stand to see the American flag burned in protest, I suppose I can stand to see the confederate flag.

When someone burns the flag they are trying to tell you what they do not want. Is it fair to say that when they display the flag of the confederacy, they are telling you what they want? If this is any indication of how a grudge can be handed down for over 140 years, you can imagine how long they will be willing to carry on the grudge against the Affordable Care Act. Will we have to defeat these people more resoundingly than they were defeated in the Civil War (they call it The War Of Northern Aggression), before we can get the point across? Or has the American experiment finally reached the end of the road?

You might take the lesson from this that we have to defeat the latest move in Congress by the Republicans the way we treated the surrender of the Japanese after World War II. Then we insisted on abject surrender with no face saving possibility. The Republicans are giving every indication that this is the only way they will get the point, if indeed they will ever get it.