This article encapsulates the reason why it is necessary for the United States to intervene in the Syrian civil war. Simply put, America's street cred is on the line and if The Most Powerful Man In The World (aka, the President of the United States) draws a red line and fails to act decisively, that completely destroys the credibility of the United States in the realm of foreign policy.
Credibility is what keeps the world turning. Credibility in money allows it to be used as a store of exchange. Credibility in the law (and the consequences of breaking it) is what prevents people from behaving like animals. If you say you're going to kill the king, you better kill the king.
A lot of countries have staked their security on the implicit and explicit promises made by the United States government. The only thing preventing nuclear armaments from popping up in Japan and Korea is the American nuclear umbrella. Saudi Arabia, the most powerful Arab state, follows our lead because they trust us to do the dirty work in the region. Germany has resisted real rearmament because of NATO.
The United States has created a global framework in which the US has a military that is second to none, whose military expenditures engulf the rest of the world's, despite the fact that the US only accounts for 20% of the world's economic output. Everybody else has grown accustomed to this fact. And they are content to let us lead world affairs so long as we remain both powerful and credible.
That latter trait has become increasingly suspect in other capitals. US support and reassurance has prevented Israel from unilaterally acting against Iran and its nuclear weapons program. It has also kept a lid on the situation in the Korean peninsula and in Taiwan. It has deterred Russia from rearmament and reclaiming its "near abroad" as a formal sphere of influence. This has reduced the global share of military expenditures to extreme lows, which has then been reinvested in the global economy. So long as people are content with the US having the guns, they will churn out more and more butter.
That system that we've created is being pressured by the likes of Syria. If Syria can use chemical weapons and the US doesn't act on a clear transgression of international law, Saudi Arabia and Israel can't rely on us when it comes to stemming Iran's nuclear ambitions. South Korea can't trust us to act when it comes to North Korea's constant provocations. Japan and the Philippines can't trust us to contain growing Chinese ambition in the Pacific. US inaction in Syria will be a catalyst in creating a new arms race. And that ultimately endangers national security.
President Obama is stuck between a rock and a hard place. Failure to act means a very substantial loss of face both in domestic politics and internationally. Any military action will be controversial and likely unpopular. Actions from the White House and Foggy Bottom suggest that the Administration wants to offload as much responsibility as it can to Congress and our allies. But there is no decisive action without US involvement.
Simply put, the President needs to nut up against Assad. Erode his military assets via cruise missiles and keep it up until his chemical weapons infrastructure is completely destroyed. Then turn the fleet back to Italy and call it a day. It appears that a limited engagement appears to be all that the Administration is gunning for. But stalling won't make it any more palatable of a choice.
Saturday, August 31, 2013
Tuesday, August 27, 2013
The Newsroom: Counterpoints and Retrospective (8/25/13)
We got a pretty strong episode tonight. The singular focus on the overarching plot really tightened the narrative and we had some strong performances from a lot of the actors as well. There weren't any in-your-face arguments but there were enough throwaway lines that should be addressed.
1. On the bravery and brutality of soldiers
I'm glad that they didn't forget Jim Harper's background as an journalist embedded with an infantry unit in an active combat zone. The story didn't pass Harper's smell test and a big reason why was called out by Jerry Dantana: he didn't want to think that those in the military ("they were the best people I ever met") would be capable of gassing a civilian population. Dantana counters by saying that the same people in the US military would take grotesque big game bounty poses among the corpses of enemies killed in combat and then urinate on their corpses.
I need to bust out a familiar trope. Not all troops are like that. Soldiers (or airmen, or sailors, or Marines) are people just like the rest of us. And that runs the gamut from "the best people I ever met" to pond scum, with most stuck somewhere in the middle. All of them are focused on keeping their comrades alive and well and getting the job done, day in and day out. Sometimes that involves acts of utmost bravery and nobility. Sometimes that involves posing next to corpses of the slain and then urinating on them afterward.
The military (mostly) keeps a lid on this by not giving active duty combat troops decisions above their pay grade. Infantry getting shellacked by enemy artillery in a fox hole are not going to be trusted with the nuclear football. And a pilot of a Sikorsky UH-60 is not going to have Sarin at his disposal. With the recent rumors of chemical attacks in Syria, it's raised alarms in every Western capital. This is not something that can happen if Western armies would dare to use Sarin in an extraction mission.
2. Lies in service to a greater truth
The first source they got to come forward hid his traumatic brain injury from the journalists because he wanted to be taken seriously as a source on something important. The use of Sarin gas is undoubtedly something that the public needs to know. The head of ACN News, Charlie Skinner, likens it to boys lying about their age in order to enlist in the army so they could fight the Nazis.
Dantana gets caught doing the same thing. But his greater truth also happens to benefit him tremendously as the producer behind the segment. This is seen as vastly less noble than the Marine who became their first source on Genoa. Although the show burns both people for not playing by the rules, we have to realize that those who make the rules do so to preserve their own power.
Nobody ever became great by playing by the rules. You become great by subverting the rules. By changing them. By doing things that advantage you, even if it is in violation of something else. Great countries became great by engulfing formerly great countries. And the winners get to write history. The show portrays both characters who lied to be doing something anathema to "doing the news right", but if the story had been real, then it would have never mattered.
People take risks and sometimes they get burned. That is the takeaway I got from the last episode, although I'm pretty sure the show wanted to teach the audience a lesson on integrity.
3. Challenging the Great Man Theory
McAvoy gives the lawyers, and the audience, a story about Claudette Colvin, the progenitor of Rosa Parks in the Civil Rights Era. He argues that had Claudette Colvin had the same traits that made Rosa Parks a sympathetic figure in the fight for black equality, Rosa Parks never would have become Rosa Parks and Martin Luther King Jr. might have never become famous for his activism.
Sorkin is making the argument that timing is everything. And because of that, there is no such thing as a great man. The great men that we idolize in history were simply vehicles of convenience during times of great change and turbulence. And this, I think, is closer to the nature of history than the myths that we're fed from movies. The greatest figures in history have always stood on the shoulders of giant things. Whether those things are general discontent among the peasantry and middle class in pre-Revolutionary France or the financial backing of Ferdinand and Isabella of Spain, no man is an island and no man can accomplish anything great by himself.
This is the principle behind President Obama's exhortation that change comes from the people. And that's why politicians watch polls. Political capital exists at the margins around the twin pillars of public opinion and general inertia.
4. Without the New Deal, we would have never gotten out of the recession
I have always been sympathetic to arguments that FDR's policies actually lengthened the Great Depression. But at the same time, all people need to do on the other side is point to this chart:
And say "and all that recovery occurred under FDR" and then you can convince a ton of people that FDR did, in fact, save the American economy.
In my opinion, FDR was the first modern President of the United States. Although expansions of Federal power happened in fits and starts before him (Jackson, Lincoln, Theodore Roosevelt, Woodrow Wilson), what we know as the modern Federal government really began under FDR's administration. Naturally, his policies have become a flashpoint among economic historians and the politically inclined.
But what that chart shows is that real GDP actually recovered to above the pre-Depression peak in 1929 during 1937 (before the mini-recession from 37-38 dragged it briefly down again). And there's no "preparations for WWII got us there" argument to be had. Lend Lease, the decisive break against neutrality against the Axis Powers, occurred in 1941 and preparations for it began in earnest in 1938, 1 year after we gained back all the economic ground we lost between '29-'32.
But economies are resilient. Declines in output snap back regardless of what the government does. The main reason why is because a country's wealth base isn't eroded during an economic contraction. The factories, roads, technologies, and people that enabled a country to produce X amount of goods are still there during a recession. The only thing that is lacking is confidence and optimism. Time restores it, not new government policy. Because people tend to overreact to extraordinary circumstances, economies have experienced large boom and bust cycles. If you average it out, the trend is upward because of increases in productivity. Productivity increases are generally driven by phenomenon occurring within the private sector.
From a purely intuitive sense, I can't stand New Deal worship. It paints the President and the Federal government as the saviors of the economy. In relative terms, the Federal government under Hoover made up 12% of GDP compared to FDR's 15%. But output collapsed by a full third from its peak. Even under Keynesian models, it would be foolish to attribute the recovery from the Great Depression to actions taken by the Federal government.
1. On the bravery and brutality of soldiers
I'm glad that they didn't forget Jim Harper's background as an journalist embedded with an infantry unit in an active combat zone. The story didn't pass Harper's smell test and a big reason why was called out by Jerry Dantana: he didn't want to think that those in the military ("they were the best people I ever met") would be capable of gassing a civilian population. Dantana counters by saying that the same people in the US military would take grotesque big game bounty poses among the corpses of enemies killed in combat and then urinate on their corpses.
I need to bust out a familiar trope. Not all troops are like that. Soldiers (or airmen, or sailors, or Marines) are people just like the rest of us. And that runs the gamut from "the best people I ever met" to pond scum, with most stuck somewhere in the middle. All of them are focused on keeping their comrades alive and well and getting the job done, day in and day out. Sometimes that involves acts of utmost bravery and nobility. Sometimes that involves posing next to corpses of the slain and then urinating on them afterward.
The military (mostly) keeps a lid on this by not giving active duty combat troops decisions above their pay grade. Infantry getting shellacked by enemy artillery in a fox hole are not going to be trusted with the nuclear football. And a pilot of a Sikorsky UH-60 is not going to have Sarin at his disposal. With the recent rumors of chemical attacks in Syria, it's raised alarms in every Western capital. This is not something that can happen if Western armies would dare to use Sarin in an extraction mission.
2. Lies in service to a greater truth
The first source they got to come forward hid his traumatic brain injury from the journalists because he wanted to be taken seriously as a source on something important. The use of Sarin gas is undoubtedly something that the public needs to know. The head of ACN News, Charlie Skinner, likens it to boys lying about their age in order to enlist in the army so they could fight the Nazis.
Dantana gets caught doing the same thing. But his greater truth also happens to benefit him tremendously as the producer behind the segment. This is seen as vastly less noble than the Marine who became their first source on Genoa. Although the show burns both people for not playing by the rules, we have to realize that those who make the rules do so to preserve their own power.
Nobody ever became great by playing by the rules. You become great by subverting the rules. By changing them. By doing things that advantage you, even if it is in violation of something else. Great countries became great by engulfing formerly great countries. And the winners get to write history. The show portrays both characters who lied to be doing something anathema to "doing the news right", but if the story had been real, then it would have never mattered.
People take risks and sometimes they get burned. That is the takeaway I got from the last episode, although I'm pretty sure the show wanted to teach the audience a lesson on integrity.
3. Challenging the Great Man Theory
McAvoy gives the lawyers, and the audience, a story about Claudette Colvin, the progenitor of Rosa Parks in the Civil Rights Era. He argues that had Claudette Colvin had the same traits that made Rosa Parks a sympathetic figure in the fight for black equality, Rosa Parks never would have become Rosa Parks and Martin Luther King Jr. might have never become famous for his activism.
Sorkin is making the argument that timing is everything. And because of that, there is no such thing as a great man. The great men that we idolize in history were simply vehicles of convenience during times of great change and turbulence. And this, I think, is closer to the nature of history than the myths that we're fed from movies. The greatest figures in history have always stood on the shoulders of giant things. Whether those things are general discontent among the peasantry and middle class in pre-Revolutionary France or the financial backing of Ferdinand and Isabella of Spain, no man is an island and no man can accomplish anything great by himself.
This is the principle behind President Obama's exhortation that change comes from the people. And that's why politicians watch polls. Political capital exists at the margins around the twin pillars of public opinion and general inertia.
4. Without the New Deal, we would have never gotten out of the recession
I have always been sympathetic to arguments that FDR's policies actually lengthened the Great Depression. But at the same time, all people need to do on the other side is point to this chart:
And say "and all that recovery occurred under FDR" and then you can convince a ton of people that FDR did, in fact, save the American economy.
In my opinion, FDR was the first modern President of the United States. Although expansions of Federal power happened in fits and starts before him (Jackson, Lincoln, Theodore Roosevelt, Woodrow Wilson), what we know as the modern Federal government really began under FDR's administration. Naturally, his policies have become a flashpoint among economic historians and the politically inclined.
But what that chart shows is that real GDP actually recovered to above the pre-Depression peak in 1929 during 1937 (before the mini-recession from 37-38 dragged it briefly down again). And there's no "preparations for WWII got us there" argument to be had. Lend Lease, the decisive break against neutrality against the Axis Powers, occurred in 1941 and preparations for it began in earnest in 1938, 1 year after we gained back all the economic ground we lost between '29-'32.
But economies are resilient. Declines in output snap back regardless of what the government does. The main reason why is because a country's wealth base isn't eroded during an economic contraction. The factories, roads, technologies, and people that enabled a country to produce X amount of goods are still there during a recession. The only thing that is lacking is confidence and optimism. Time restores it, not new government policy. Because people tend to overreact to extraordinary circumstances, economies have experienced large boom and bust cycles. If you average it out, the trend is upward because of increases in productivity. Productivity increases are generally driven by phenomenon occurring within the private sector.
From a purely intuitive sense, I can't stand New Deal worship. It paints the President and the Federal government as the saviors of the economy. In relative terms, the Federal government under Hoover made up 12% of GDP compared to FDR's 15%. But output collapsed by a full third from its peak. Even under Keynesian models, it would be foolish to attribute the recovery from the Great Depression to actions taken by the Federal government.
Thursday, August 22, 2013
Just Sayin'
If you think this article's headline is ridiculous, it's the same kind of attention grabbing cocksure proclamation that most articles on Slate and The Atlantic are guilty of having.
Wednesday, August 21, 2013
The Lessons of Capital Flight
India has recently made a splash in the financial papers as the rupee has experienced a dramatic and precipitous decline in recent weeks.
Market observers and analysts are attributing much of the decline to investors anticipating the Federal Reserve's tapering of its quantitative easing program later this year. Recent economic data suggests that the economy has recovered to a point where the Fed is finally comfortable with taking its foot off the monetary throttle.
Long term Treasury yields have increased dramatically in the past month. At the time of this writing, the 10 year Treasury note is currently yielding 2.81%. That's up from a yield of 1.65% in the beginning of May, a 70% increase in the span of 4 months.
Assuming no change in the Federal funds rate until December at the earliest, we will have experienced at least 5 years of near zero interest rate. That unsustainable rate has been the cause of innumerable headaches among fixed income investors. In their search for yield, they plunged into riskier and riskier asset classes.
Once people realized the world wasn't going to end, corporate bond markets rallied. First it was the investment grade bonds. Then came the massive (and arguably still ongoing) rally in domestic junk bonds. Desperate for more yield, investors also poured into both sovereign and corporate emerging market debt. India was a huge recipient of Western capital outflows and its domestic stock and bond markets saw huge increases since 2009.
Those outflows have turned into inflows as American investors are withdrawing overseas capital and reinvesting it into domestic markets. As the cost of imports becomes more expensive, India is currently experiencing a surge in inflation, which the central bank is fighting by increasing interest rates. There are a few lessons to take away from this, if you happen to be a central planner for an emerging market country.
1. Seigniorage, seigniorage, seigniorage: It's a weird word. But its definition is very important for a country's capital account. When your currency is at a high point, the best thing to do is to buy as much stuff from other countries as you can. Since you're exchanging real goods and services for pieces of paper that actually lose their value over time, you're coming out way ahead.
Developed economies have sufficiently deep financial markets that do a very effective job of smoothing out the volatility of floating exchange rates via futures contracts for commodities and currencies. But for developing economies that don't quite have the same luxury, it's important for them to take full advantage of a spike in currency valuation. Buy as much capital equipment as you can from the fine folks at Caterpillar, GE, Monsanto, and Dow Chemical.
2. Yield chasers always lose...eventually: The foreign investors currently beating a path to the exit are also taking huge losses even as they're indirectly inflicting inflation on Indian (completely unintentional alliteration, by the way) consumers. Chilean and Brazilian central bankers are less sanguine about their ability to fully exploit lesson 1 and have frequently resorted to capital controls to slow the inflows and outflows of Western capital in their respective countries.
Stability is an asset in and of itself. And as appealing as lesson #1 may seem, it can be extremely hard to follow through in reality. Latin American banks tried to get a handle on it all throughout the 70s, 80s, and 90s and results have been less than spectacular. It's hard to say exactly what a central bank should do when the country is experiencing huge inflows of hot money from foreign investors, but it does seem that many of them do feel like capital controls are part of the equation.
3. It sure is nice to have deep capital markets: Countries like the US don't have to put up with this kinda crap because our economy is large and we also, not coincidentally, have the deepest capital markets in the world. Price stability makes it much easier for the private sector to invest. And price stability is usually the result of careful, measured, and above all else, principled monetary policy that isn't subject to the whims and tempers of populist leaders and leftist central bankers.
Pick a system and stick with it. Any major changes have to be made with as much forewarning as possible so as to not surprise both the sophisticated investor and the man on the street. One thing is for sure, succumbing to political pressure is not good economics.
Long term Treasury yields have increased dramatically in the past month. At the time of this writing, the 10 year Treasury note is currently yielding 2.81%. That's up from a yield of 1.65% in the beginning of May, a 70% increase in the span of 4 months.
Assuming no change in the Federal funds rate until December at the earliest, we will have experienced at least 5 years of near zero interest rate. That unsustainable rate has been the cause of innumerable headaches among fixed income investors. In their search for yield, they plunged into riskier and riskier asset classes.
Once people realized the world wasn't going to end, corporate bond markets rallied. First it was the investment grade bonds. Then came the massive (and arguably still ongoing) rally in domestic junk bonds. Desperate for more yield, investors also poured into both sovereign and corporate emerging market debt. India was a huge recipient of Western capital outflows and its domestic stock and bond markets saw huge increases since 2009.
Those outflows have turned into inflows as American investors are withdrawing overseas capital and reinvesting it into domestic markets. As the cost of imports becomes more expensive, India is currently experiencing a surge in inflation, which the central bank is fighting by increasing interest rates. There are a few lessons to take away from this, if you happen to be a central planner for an emerging market country.
1. Seigniorage, seigniorage, seigniorage: It's a weird word. But its definition is very important for a country's capital account. When your currency is at a high point, the best thing to do is to buy as much stuff from other countries as you can. Since you're exchanging real goods and services for pieces of paper that actually lose their value over time, you're coming out way ahead.
Developed economies have sufficiently deep financial markets that do a very effective job of smoothing out the volatility of floating exchange rates via futures contracts for commodities and currencies. But for developing economies that don't quite have the same luxury, it's important for them to take full advantage of a spike in currency valuation. Buy as much capital equipment as you can from the fine folks at Caterpillar, GE, Monsanto, and Dow Chemical.
2. Yield chasers always lose...eventually: The foreign investors currently beating a path to the exit are also taking huge losses even as they're indirectly inflicting inflation on Indian (completely unintentional alliteration, by the way) consumers. Chilean and Brazilian central bankers are less sanguine about their ability to fully exploit lesson 1 and have frequently resorted to capital controls to slow the inflows and outflows of Western capital in their respective countries.
Stability is an asset in and of itself. And as appealing as lesson #1 may seem, it can be extremely hard to follow through in reality. Latin American banks tried to get a handle on it all throughout the 70s, 80s, and 90s and results have been less than spectacular. It's hard to say exactly what a central bank should do when the country is experiencing huge inflows of hot money from foreign investors, but it does seem that many of them do feel like capital controls are part of the equation.
3. It sure is nice to have deep capital markets: Countries like the US don't have to put up with this kinda crap because our economy is large and we also, not coincidentally, have the deepest capital markets in the world. Price stability makes it much easier for the private sector to invest. And price stability is usually the result of careful, measured, and above all else, principled monetary policy that isn't subject to the whims and tempers of populist leaders and leftist central bankers.
Pick a system and stick with it. Any major changes have to be made with as much forewarning as possible so as to not surprise both the sophisticated investor and the man on the street. One thing is for sure, succumbing to political pressure is not good economics.
Monday, August 19, 2013
The Newsroom: Counterpoints and Retrospective (8/18/13)
This is The Newsroom I remember from season 1. Time goes by. Events are covered. Some briefly, some in depth, and some in covert manner. Characters progress in their development, and the show moves into the final stretch. We just passed the 2/3 mark of the season. That being said, let's get down to tonight's episode.
1. Atropine
They finally addressed how the extracted targets were able to survive the Sarin attack. But color me skeptical. Death from Sarin happens through asphyxiation, which can happen in just minutes. If they already had custody of the extraction targets, this would be more plausible. But at the same time, we're giving the Pakistanis too much credit.
In Iraq, the area where US troops saw the most combat, the vast majority of fighters in Iraq were poorly trained to an exceptional degree. They would describe the panicky soldiers' immediate unloading of their weapon (most often the 30 round magazine of a fully automatic AK47) upon any provocation in any direction as the "Iraqi death blossom".
I imagine the average Pakistani fighter is just as poorly trained. Any symmetrical combat with two elite MARSOC units would be a grossly unfair fight. Combine that with the fact that the 2 UH-60s could provide a decent amount of non-chemical anti-personnel fire support and the fact that you could have Reaper (a maximum armament of 14 Hellfire missiles) and Predator drones loiter over the area, the case for chemical weapons is just too weak to make.
At the same time, I'm glad they covered their bases. Most of the characters seemed skeptical and it's been revealed that the segment producer, Jerry Dantana, had an axe to grind against the Administration and that affected his judgment and his ethics. So all in all, I guess the story itself can pass the threshold for plausibility.
2. Fallout
They also touched on the potential fallout that this kind of news could create. I imagine it's quite difficult to wrestle with the implications that breaking news could have, especially when it comes to extremely politically sensitive topics.
I'm not in a position where I can make a material impact on such matters. But my own view (from the peanut gallery) is that you shouldn't worry about it. The news itself doesn't matter. It's the environment in which the news is broken that is the real problem. Many failed states in the Arab world love to redirect domestic anger to an external target. Given the fact that the US is the biggest player on the world stage, it's only natural that any negative story that can be attributed to us would be incendiary to the point of riots and terrorist attacks to certain peoples.
When Abu Ghraib (Don's reference to 2005) broke and the Arab world rioted, I was surprised at the reaction. Although the extracurricular activities of the night shift prison guards (I stole that from Niall Ferguson, I think) were disgraceful and highly unprofessional, the prisoners weren't actually hurt. Degraded, sure. But it isn't riot worthy.
If it wasn't Abu Ghraib, it would have been something else. The environment is caustic and every now and then, the Arab street has to riot over something. The what isn't really the issue. When you have a bunch of disenfranchised, poor people in one place, you're bound to have a highly combustible situation. Any provocation would have set it off. And the response is always going to be ridiculously disproportionate. The Dutch Mohammed cartoon set off the same kind of furor. And Rushdie's The Satanic Verses kicked off another similar reaction and that was before 9/11 and the War on Terror.
It's not the story. It's the environment.
3. Don't just do something! Sit there!
McAvoy criticizes Congress for not passing enough laws. But how many laws does this country need? The United States Code spans 51 Titles, over 200,000 pages long. The Federal Register contains half again that amount. This is the primary reason why the executive branch has so much power, because the amount of laws already on the books is enough to cover just about anything.
Federal departments and agencies have so much discretionary power and prosecutorial heft that they can cow just about single organization into compliance by the mere threat of a civil suit. The non-political parts of the Federal government, which is the part of the Federal government that actually regulates the affairs of the country, is largely self running.
That is the primary reason why hard-charging idealists quickly become jaded when they finally achieve elected office. Because there is a gargantuan amount of inertia and even the most hardline and fanatical of lawmakers and Presidents will run up against the wall of a huge bureaucracy that is entirely unaccustomed to rapid and fundamental change.
Even with everything that's happened in the past 5 years, this is still one hell of a country to live in. And the laws and regulations that govern the country are more or less the same laws and regulations that governed the country 20 years ago. Sometimes those laws need to be updated, but Congress should not be held to some arbitrary metric of number of laws passed.
4. A Nobel Prize in Economics
That isn't a qualification for being a Fed Governor. And it shouldn't be treated as such. The awarding of Nobel Prizes for economics, literature, and peace have always been highly political and largely symbolic. President Obama won it shortly after his inauguration and the Nobel committee didn't even try to pretend that he did something.
Frankly, I don't trust the professoriate. Somebody who lives their entire professional lives in a completely sanitary and artificial environment doesn't deserve much respect when it comes to decisions that actually affect people outside the world of academia. There's a reason why Class A and B directors of the New York Fed are comprised solely of high finance CEOs rather than professors of finance.
On the flip side, I don't think a Fed Governor's job is that hard. Obviously it's much more important when you're on the FOMC, but frankly it's just an important position. The decision making process is arduous and is comprised of an incredible amount of hand wringing, but the decision itself is relatively straightforward. What should the target rate be? Should we expand the money supply? And by how much? Those are the 3 questions that the Fed has to answer with every FOMC meeting. You could probably take a poll of the S&P 500's CEOs and come to a similar conclusion.
5. Ron Paul 2012, WOOHOO!!!
One of my roommates back in college was a Ron Paul supporter. The guy was certifiably nuts. He wanted a return to the gold standard. Didn't trust paper currency at all. And stored his wealth primarily in silver, guns, and ammo. He talked about forming a militia and predicted the demise of the US government within a generation.
And yet, he was an excellent student and had a degree in hand as a software developer before he graduated in the spring of 2009, the absolute trough of the recession. Despite all his crazy beliefs, he still turned out to be part of the upper end of the socioeconomic ladder. This is the thing that I think drives liberals crazy. A lot of people who support the kooky candidates are relatively well educated and financially well off. But in Sorkin's world, politics is the only thing that counts, so they discredit these kinds of people based on their fringe political ideologies, as if they are the only people who have fringe beliefs.
The Paul supporters are a bit of an odd lot, but it's nothing too weird. And many of them lead high functioning lives, just like the rest of us.
6. Mitt Romney's character assassination
They had to use a former Romney spokesperson to make the case but I feel like the case should have been made by McAvoy, who isn't really interested in making Romney look good. Odd considering that they're both old school Republicans. But anyway.
Mitt Romney's character assassination by the media was shameful. And it was so obvious. He is many things. And he sure is a caricature of a WASPish mainline, old money Republican politician despite the fact that he's Mormon and relatively new money, given the fact that he made his fortune (instead of inheriting it) in the go-go 80s during the Reagan Administration.
The media played up the stiff, corporate shill caricature as much as they could because they rightly feared that he was the most electable Republican in the field. The one thing that I felt was fair coverage was that disastrous 47% video. I remember when then-candidate Obama had a similarly leaked video about white people clinging to guns and religion, and although what he said was rote liberal's liberal orthodoxy, he couched it in terms that made it slightly more palatable going down.
Romney made no such effort, and the media wasn't in the tank for him as they were with Obama, so he took the full brunt of the unforced error. And he paid a big price for it, although I don't think that decisively tipped it for Obama. In the modern era, it is exceptionally difficult to unseat the incumbent President and you need a lot of lucky breaks to happen one after the other in order to make it happen.
I'm pretty angry about Romney's media treatment because I genuinely liked the guy. And I'm not really predisposed to liking him. But learning more about him I saw a person who was disciplined, hard working, honorable, deeply religious (in a good, caring, and helpful way) and who lived a model life. And he was successful at everything he did. Management consulting to finance CEO to public organization administrator (SLC Olympics) to governor, he was simply good at everything and just a good guy. He just struck me as more like the politician who got involved because it was the right thing to do rather than the career politician who has an unquenchable thirst for self aggrandizement. I really liked Mitt Romney.
And he would have been very good for my portfolio. Although Bernanke's extremely aggressive monetary policy has been the biggest contributor to keeping my stocks in the black.
7. The dent
Did anybody else notice that there was a dent in McAvoy's second refrigerator in his luxury Manhattan condo? That distracted me in that scene. Pretty weird, huh? That we expect pristine sets on TV?
1. Atropine
They finally addressed how the extracted targets were able to survive the Sarin attack. But color me skeptical. Death from Sarin happens through asphyxiation, which can happen in just minutes. If they already had custody of the extraction targets, this would be more plausible. But at the same time, we're giving the Pakistanis too much credit.
In Iraq, the area where US troops saw the most combat, the vast majority of fighters in Iraq were poorly trained to an exceptional degree. They would describe the panicky soldiers' immediate unloading of their weapon (most often the 30 round magazine of a fully automatic AK47) upon any provocation in any direction as the "Iraqi death blossom".
I imagine the average Pakistani fighter is just as poorly trained. Any symmetrical combat with two elite MARSOC units would be a grossly unfair fight. Combine that with the fact that the 2 UH-60s could provide a decent amount of non-chemical anti-personnel fire support and the fact that you could have Reaper (a maximum armament of 14 Hellfire missiles) and Predator drones loiter over the area, the case for chemical weapons is just too weak to make.
At the same time, I'm glad they covered their bases. Most of the characters seemed skeptical and it's been revealed that the segment producer, Jerry Dantana, had an axe to grind against the Administration and that affected his judgment and his ethics. So all in all, I guess the story itself can pass the threshold for plausibility.
2. Fallout
They also touched on the potential fallout that this kind of news could create. I imagine it's quite difficult to wrestle with the implications that breaking news could have, especially when it comes to extremely politically sensitive topics.
I'm not in a position where I can make a material impact on such matters. But my own view (from the peanut gallery) is that you shouldn't worry about it. The news itself doesn't matter. It's the environment in which the news is broken that is the real problem. Many failed states in the Arab world love to redirect domestic anger to an external target. Given the fact that the US is the biggest player on the world stage, it's only natural that any negative story that can be attributed to us would be incendiary to the point of riots and terrorist attacks to certain peoples.
When Abu Ghraib (Don's reference to 2005) broke and the Arab world rioted, I was surprised at the reaction. Although the extracurricular activities of the night shift prison guards (I stole that from Niall Ferguson, I think) were disgraceful and highly unprofessional, the prisoners weren't actually hurt. Degraded, sure. But it isn't riot worthy.
If it wasn't Abu Ghraib, it would have been something else. The environment is caustic and every now and then, the Arab street has to riot over something. The what isn't really the issue. When you have a bunch of disenfranchised, poor people in one place, you're bound to have a highly combustible situation. Any provocation would have set it off. And the response is always going to be ridiculously disproportionate. The Dutch Mohammed cartoon set off the same kind of furor. And Rushdie's The Satanic Verses kicked off another similar reaction and that was before 9/11 and the War on Terror.
It's not the story. It's the environment.
3. Don't just do something! Sit there!
McAvoy criticizes Congress for not passing enough laws. But how many laws does this country need? The United States Code spans 51 Titles, over 200,000 pages long. The Federal Register contains half again that amount. This is the primary reason why the executive branch has so much power, because the amount of laws already on the books is enough to cover just about anything.
Federal departments and agencies have so much discretionary power and prosecutorial heft that they can cow just about single organization into compliance by the mere threat of a civil suit. The non-political parts of the Federal government, which is the part of the Federal government that actually regulates the affairs of the country, is largely self running.
That is the primary reason why hard-charging idealists quickly become jaded when they finally achieve elected office. Because there is a gargantuan amount of inertia and even the most hardline and fanatical of lawmakers and Presidents will run up against the wall of a huge bureaucracy that is entirely unaccustomed to rapid and fundamental change.
Even with everything that's happened in the past 5 years, this is still one hell of a country to live in. And the laws and regulations that govern the country are more or less the same laws and regulations that governed the country 20 years ago. Sometimes those laws need to be updated, but Congress should not be held to some arbitrary metric of number of laws passed.
4. A Nobel Prize in Economics
That isn't a qualification for being a Fed Governor. And it shouldn't be treated as such. The awarding of Nobel Prizes for economics, literature, and peace have always been highly political and largely symbolic. President Obama won it shortly after his inauguration and the Nobel committee didn't even try to pretend that he did something.
Frankly, I don't trust the professoriate. Somebody who lives their entire professional lives in a completely sanitary and artificial environment doesn't deserve much respect when it comes to decisions that actually affect people outside the world of academia. There's a reason why Class A and B directors of the New York Fed are comprised solely of high finance CEOs rather than professors of finance.
On the flip side, I don't think a Fed Governor's job is that hard. Obviously it's much more important when you're on the FOMC, but frankly it's just an important position. The decision making process is arduous and is comprised of an incredible amount of hand wringing, but the decision itself is relatively straightforward. What should the target rate be? Should we expand the money supply? And by how much? Those are the 3 questions that the Fed has to answer with every FOMC meeting. You could probably take a poll of the S&P 500's CEOs and come to a similar conclusion.
5. Ron Paul 2012, WOOHOO!!!
One of my roommates back in college was a Ron Paul supporter. The guy was certifiably nuts. He wanted a return to the gold standard. Didn't trust paper currency at all. And stored his wealth primarily in silver, guns, and ammo. He talked about forming a militia and predicted the demise of the US government within a generation.
And yet, he was an excellent student and had a degree in hand as a software developer before he graduated in the spring of 2009, the absolute trough of the recession. Despite all his crazy beliefs, he still turned out to be part of the upper end of the socioeconomic ladder. This is the thing that I think drives liberals crazy. A lot of people who support the kooky candidates are relatively well educated and financially well off. But in Sorkin's world, politics is the only thing that counts, so they discredit these kinds of people based on their fringe political ideologies, as if they are the only people who have fringe beliefs.
The Paul supporters are a bit of an odd lot, but it's nothing too weird. And many of them lead high functioning lives, just like the rest of us.
6. Mitt Romney's character assassination
They had to use a former Romney spokesperson to make the case but I feel like the case should have been made by McAvoy, who isn't really interested in making Romney look good. Odd considering that they're both old school Republicans. But anyway.
Mitt Romney's character assassination by the media was shameful. And it was so obvious. He is many things. And he sure is a caricature of a WASPish mainline, old money Republican politician despite the fact that he's Mormon and relatively new money, given the fact that he made his fortune (instead of inheriting it) in the go-go 80s during the Reagan Administration.
The media played up the stiff, corporate shill caricature as much as they could because they rightly feared that he was the most electable Republican in the field. The one thing that I felt was fair coverage was that disastrous 47% video. I remember when then-candidate Obama had a similarly leaked video about white people clinging to guns and religion, and although what he said was rote liberal's liberal orthodoxy, he couched it in terms that made it slightly more palatable going down.
Romney made no such effort, and the media wasn't in the tank for him as they were with Obama, so he took the full brunt of the unforced error. And he paid a big price for it, although I don't think that decisively tipped it for Obama. In the modern era, it is exceptionally difficult to unseat the incumbent President and you need a lot of lucky breaks to happen one after the other in order to make it happen.
I'm pretty angry about Romney's media treatment because I genuinely liked the guy. And I'm not really predisposed to liking him. But learning more about him I saw a person who was disciplined, hard working, honorable, deeply religious (in a good, caring, and helpful way) and who lived a model life. And he was successful at everything he did. Management consulting to finance CEO to public organization administrator (SLC Olympics) to governor, he was simply good at everything and just a good guy. He just struck me as more like the politician who got involved because it was the right thing to do rather than the career politician who has an unquenchable thirst for self aggrandizement. I really liked Mitt Romney.
And he would have been very good for my portfolio. Although Bernanke's extremely aggressive monetary policy has been the biggest contributor to keeping my stocks in the black.
7. The dent
Did anybody else notice that there was a dent in McAvoy's second refrigerator in his luxury Manhattan condo? That distracted me in that scene. Pretty weird, huh? That we expect pristine sets on TV?
Tuesday, August 13, 2013
The Newsroom: Counterpoints (8/11/13)
Tonight's episode was something of a bottle episode in the sense that everything took place during a two hour broadcast of News Night With Will McAvoy. No real agenda was being pushed, but there were a few talking points that need to be addressed. And some hypocrisies to be pointed out as well. So let's lead with that.
1. Trayvon Martin is a big deal, and we're going to do our damndest to cover this thing.
Again, no real agenda being pushed. But in the absence of the agenda, we should simply analyze what we watched. Jim and Maggie waited for an interminably long time to download a ~270 second sound file of the 911 call that George Zimmerman made. Given the fact that the show didn't make the story seem insignificant, I guess we're supposed to accept that the killing of Trayvon Martin was a big deal.
Back in season 1, Will McAvoy made a huge fuss about how the Casey Anthony trial was utterly insignificant and non-newsworthy. Young, white single mom allegedly kills her baby and the entire country goes apeshit over something that is, in the grand scheme of things, entirely insignificant. I fail to see how the Trayvon Martin killing is any different. In both instances, somebody is accused of murder. The only significant differences are relationship and skin color.
Nowhere in the episode did anybody in the show remark about how this shouldn't be newsworthy. If there is a racial component, why do we have to make such a big deal out of it? Because people care about race. Mothers have killed their own children before. Why did we make a big deal out of Casey Anthony? Because she was a young, attractive white female. Race and attractive white females are apparently things that move the needle in this country.
There is a certain hypocrisy to this. Both instances involve an event that does not have any material impact to people outside of the parties' immediate families. But it still garners national coverage. If we're supposed to judge News Night as a show whose stated aim is to educate voters on political issues, both issues fail on that merit.
2. Staff Sergeant Robert Bales
I remember when this story first broke and I was saddened by what happened. Stories like these give face to the immense pressure that we're putting on our men and women in uniform. It is so hard to fight a war. And it's even harder to fight it when you're stationed in a foreign place where much of the indigenous population actively hates and fears you.
The wars we have fought in Iraq and Afghanistan have had no clear aims beyond the initial objective (destroy al Qaeda and remove Saddam Hussein from power) and we stuck around to keep whatever peace we could. It was much more successful in post-war Europe because the American soldiers were treated as liberators and heroes, not unholy enemies.
Every day, we ask our infantrymen to put their lives and the lives of their comrades on the line for vague reasons that have very little strategic value. Counterinsurgency is exhaustive work, and when you've seen the people closest to you (and there are no people closer than those who have fought and died together) die for no discernible objective, I imagine it takes a toll on even the most hardened of combat veterans. Sometimes people snap, and that is something that the country must consider when it sends its bravest into battle.
3. Sandra Fluke shouldn't matter and the prudes of this country make everybody worse off.
Can we all agree that Rush Limbaugh is a mean spirited shock jock who we should all ignore?
4. The President doesn't have influence over the price of oil. It's set on international markets.
To begin, as a technical matter, Chevron, as McAvoy explicitly mentioned, cannot actually sell all the oil it wants to Australia. By law, any oil that is extracted within the US and its territorial waters cannot be exported. It's outdated, especially given the new supplies and production capacity we've acquired with hydraulic fracturing. But it's still on the books and actively enforced.
While it is, from an economic standpoint, stupid to blame President Obama for gas prices that doubled since he took office, it must be said that sitting Presidents do have the power to affect the price of oil on the margin. The executive branch has large regulatory power over the prospecting and drilling of oil within the country. Given the fact that hydraulic fracturing took off around 2009, had the President instructed Interior, and the EPA to be more lax on drilling permits and land leases, it would have a real impact on oil prices and supply.
Just look at North Dakota:
In less than five years, North Dakota rocketed all the way to 2nd largest oil producer within the US, with only Texas beating it in production. 1 out of 10 barrels produced in the US is now produced within North Dakota. That's all thanks to hydraulic fracturing. By 2020, the US is projected to overtake Saudi Arabia in oil production due to this incredible technology. If the Obama Administration hadn't put the brakes on exploration and leasing on Federal lands, it might have been sooner.
5. Philosophy degrees are worthless.
Can't argue with Sorkin on this one.
1. Trayvon Martin is a big deal, and we're going to do our damndest to cover this thing.
Again, no real agenda being pushed. But in the absence of the agenda, we should simply analyze what we watched. Jim and Maggie waited for an interminably long time to download a ~270 second sound file of the 911 call that George Zimmerman made. Given the fact that the show didn't make the story seem insignificant, I guess we're supposed to accept that the killing of Trayvon Martin was a big deal.
Back in season 1, Will McAvoy made a huge fuss about how the Casey Anthony trial was utterly insignificant and non-newsworthy. Young, white single mom allegedly kills her baby and the entire country goes apeshit over something that is, in the grand scheme of things, entirely insignificant. I fail to see how the Trayvon Martin killing is any different. In both instances, somebody is accused of murder. The only significant differences are relationship and skin color.
Nowhere in the episode did anybody in the show remark about how this shouldn't be newsworthy. If there is a racial component, why do we have to make such a big deal out of it? Because people care about race. Mothers have killed their own children before. Why did we make a big deal out of Casey Anthony? Because she was a young, attractive white female. Race and attractive white females are apparently things that move the needle in this country.
There is a certain hypocrisy to this. Both instances involve an event that does not have any material impact to people outside of the parties' immediate families. But it still garners national coverage. If we're supposed to judge News Night as a show whose stated aim is to educate voters on political issues, both issues fail on that merit.
2. Staff Sergeant Robert Bales
I remember when this story first broke and I was saddened by what happened. Stories like these give face to the immense pressure that we're putting on our men and women in uniform. It is so hard to fight a war. And it's even harder to fight it when you're stationed in a foreign place where much of the indigenous population actively hates and fears you.
The wars we have fought in Iraq and Afghanistan have had no clear aims beyond the initial objective (destroy al Qaeda and remove Saddam Hussein from power) and we stuck around to keep whatever peace we could. It was much more successful in post-war Europe because the American soldiers were treated as liberators and heroes, not unholy enemies.
Every day, we ask our infantrymen to put their lives and the lives of their comrades on the line for vague reasons that have very little strategic value. Counterinsurgency is exhaustive work, and when you've seen the people closest to you (and there are no people closer than those who have fought and died together) die for no discernible objective, I imagine it takes a toll on even the most hardened of combat veterans. Sometimes people snap, and that is something that the country must consider when it sends its bravest into battle.
3. Sandra Fluke shouldn't matter and the prudes of this country make everybody worse off.
Can we all agree that Rush Limbaugh is a mean spirited shock jock who we should all ignore?
4. The President doesn't have influence over the price of oil. It's set on international markets.
To begin, as a technical matter, Chevron, as McAvoy explicitly mentioned, cannot actually sell all the oil it wants to Australia. By law, any oil that is extracted within the US and its territorial waters cannot be exported. It's outdated, especially given the new supplies and production capacity we've acquired with hydraulic fracturing. But it's still on the books and actively enforced.
While it is, from an economic standpoint, stupid to blame President Obama for gas prices that doubled since he took office, it must be said that sitting Presidents do have the power to affect the price of oil on the margin. The executive branch has large regulatory power over the prospecting and drilling of oil within the country. Given the fact that hydraulic fracturing took off around 2009, had the President instructed Interior, and the EPA to be more lax on drilling permits and land leases, it would have a real impact on oil prices and supply.
Just look at North Dakota:
 |
| Source: EIA |
In less than five years, North Dakota rocketed all the way to 2nd largest oil producer within the US, with only Texas beating it in production. 1 out of 10 barrels produced in the US is now produced within North Dakota. That's all thanks to hydraulic fracturing. By 2020, the US is projected to overtake Saudi Arabia in oil production due to this incredible technology. If the Obama Administration hadn't put the brakes on exploration and leasing on Federal lands, it might have been sooner.
5. Philosophy degrees are worthless.
Can't argue with Sorkin on this one.
Monday, August 12, 2013
Rain Check
Unfortunately, I was unable to watch the first premiering of the newest episode of The Newsroom and HBOGO was being uncooperative. I just finished it now and a recap/counterpoints post will have to wait until tomorrow. Stay tuned.
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