FM newswire for 17 February, articles for your morning reading

Today’s links to interesting news and analysis, collected from around the Internet.  If you find this useful, pass it to a friend or colleague.

  1. Let’s not go there:  “On the Measurement of Zimbabwe’s Hyperinflation“, Steve H. Hanke and Alex K. F. Kwok, Cato Journal, Spring/Summer 2009
  2. “China’s Investment Boom: the Great Leap into the Unknown”, Pivot Capital, 21 August 2009. Excellent report, albeit a bit tendentious.  Available on their research page; registration required.
  3. Debt and deleveraging : The global credit bubble and its economic consequences“, McKinsey Global Institute, January 2010
  4. Poor title, great article:  “Greece – Our Debt, Your Problem“, Paul Kedrosky, Infectious Greed, 15 February 2010 — Nothing is what it seems to be in the fun room of global finance.
  5. Important news:  “The Federal Reserve’s Exit Strategy: Unlegislated Bailout of Fannie and Freddie“, John Hussman, 15 February 2010 — “How to spend (up to) $1.5 trillion without Congressional approval.”
  6. Excellent summary of the situation:  “How to walk the fiscal tightrope that lies before us“, Martin Wolf, Financial Times, 17 February 2010 — “Prof Ferguson believes instead in a conservative free lunch.”
  7. Partial list of what a liberal Administration would do, none of which Obama has even attempted:  “What Do Liberals Want?“, Matthew Yglesias, 16 February 2010 — Add closing Gitmo (for real), reform of farm subsidies, repeal of the Defense of Marriage Act.  Obama runs a center-left policy mix, painted as a radical leftist by conservative propagandists.
  8. US news media refuse to accurately report ClimateGate:  “Jones may submit a correction to his 1990 paper“, Doug Keenan, Watts Up with That, 16 February 2010 — This example is from Nature, but the US news media in general is guilty of this behavior.
  9. A national disgrace:  “The Rape of American Prisoners“, David Kaiser and Lovisa Stannow, New York Review of Books, 11 March 2010 — The first half is about rape of children in juvinal facilities.  Perhaps we are just scum, and the nation deserves to fail.
  10. The Arctic is warming up:  “The Changing Arctic“, George Nicolas, Monthly Weather Review, November — “so little ice as never before been noted. … Many old landmarks are so changed as to be unrecognizable. Where formerly great masses of ice were found there are now often moraines, accumulations of earth and stones.

Quote of the day:

“Unless you expect the unexpected you will never find truth, for it is hard to discover and hard to attain.”
— Heraclitus, the pre-Socratic “Weeping Philosopher” of Ionia

Today’s Feature articles:

(A)  Exaggerating the threat, chapter zillion — Stratfor and MANPADS
(B)  “Choosing the Nation’s Fiscal Future“, Committee on the Fiscal Future of the United States, sponsored by the National Research Council and National Academy of Public Administration (2010)

(A)  Exaggerating the threat, chapter two million — Stratfor and Manpads

An important role of geopolitical experts is to exaggerate threats to the US.  Failure to do so results in marginalization, no longer regards as serious.  Exiled from conferences, denied exposure in the mainstream media, no longer consulted by politicians.  Only the strongest reputation can survive, like Andrew Bacevich’s.  This article about MANPADS shows a craftsman’s hand at exaggeration, skillfully avoiding discussion of actual wars — and why these easy to get weapons remain unobtainable (except in tiny quantities) by our enemies in Iraq and Afghanistan.  Our helicopters make tempting targets, should our enemies get them in decent numbers.

Man-Portable Air Defense Systems: A Persistent and Potent Threat“, Stratfor, 1 February 2010 — Summary:

For more than three decades, shoulder-fired surface-to-air missiles have been used to attack civilian as well as military aircraft. While counterproliferation efforts worldwide have focused attention on the threat — and managed to contain it to some extent — these “man-portable air defense systems” remain highly prized and sought-after by militant groups. This is because they provide a cheap, simple and reasonably effective way to bring down an airplane full of people. And while missile technology continues to be refined, counterproliferation efforts are being offset by arms transfers on the black and gray markets.

(B)  A clear cook look at Amercia’s future

Summary of “Choosing the Nation’s Fiscal Future“, Committee on the Fiscal Future of the United States, sponsored by the National Research Council and National Academy of Public Administration (2010):

A mismatch between the federal government’s revenues and spending, now and in the foreseeable future, requires heavy borrowing, leading to a large and increasing federal debt. That increasing debt raises a serious challenge to all of the goals that various people expect their government to pursue. It also raises questions about the nation’s future wealth and whether too much debt could lead to higher interest rates and even to loss of confidence in the nation’s long-term ability and commitment to honor its obligations. Many analysts have concluded that the trajectory of the federal budget set by current policies cannot be sustained.

In light of these projections, Choosing the Nation’s Fiscal Future assesses the options and possibilities for a sustainable federal budget. This comprehensive book considers a range of policy changes that could help put the budget on a sustainable path: reforms to reduce the rate of growth in spending for Medicare and Medicaid; options to reduce the growth rate of Social Security benefits or raise payroll taxes; and changes in many other government spending programs and tax policies. The book also examines how the federal budget process could be revised to be more far sighted and to hold leaders accountable for responsible stewardship of the nation’s fiscal future.

Choosing the Nation’s Fiscal Future will provide readers with a practical framework to assess budget proposals for their consistency with long-term fiscal stability. It will help them assess what policy changes they want, consistent with their own values and their views of the proper role of the government and within the constraints of a responsible national budget. It will show how the perhaps difficult but possible policy changes could be combined to produce a wide range of budget scenarios to bring revenues and spending into alignment for the long term. This book will be uniquely valuable to everyone concerned about the current and projected fiscal health of the nation.


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8 thoughts on “FM newswire for 17 February, articles for your morning reading”

  1. Your Country’s Fiscal Future: A value-added tax of minimum 15% + a sizable cut in military spending for weapons that don’t work and the fiscal problem is gone.
    FM reply: The problem is not devising solutions. The problem is political, putting them into effect.

  2. Fiscal future recommendations? You might as well advise the Titanic to sail to the Moon. There is not now nor will there be sufficient political will to enact even the slightest substantive measures.
    FM reply: That’s a guess based on current conditions, and hence likely to be correct. I have faith that it will prove wrong, but faith is speculation without evidence. Sometimes that’s all we have other than surrender, which is certain defeat.

  3. Regarding prison reform — I’m not a huge fan of a lot of what Jim Webb (one of my Senators, and someone whose campaign I volunteered for, alas) has ended up doing with his Senate seat, but in the spirit of commending people who are actually trying to fix things it should be noted that he’s really been out front on this issue. See this, and this, and this.

    There’s no political upside for him in taking this on that I can see, which makes it even more remarkable.
    FM repy: Thank you for this good news. It’s always welcome.

  4. I’m not cynical, I’m not even pessimistic. I’m just trying to be realistic. What crystalized my skepticism was the Peck piece you recently posted. See, I had long accepted, like FM, that all we lacked was political will. And I also believed – reasonably, I think, but naively – that as the fiscal situation became more dire, then *naturally* political will to fix it would increase, until it was sufficient to actually solve the problem. But alas, human nature works against us, it seems.

    As Peck pointed out, people under stress, under financial hardship, are *less* likely, not *more* likely to sacrifice any of what they have left for longer term goals. Likewise, as the financial situation of the nation becomes more and more unsustainable, it loses long-term credibility, and willingness to budge even a little on short-term gains drops precipitously. The less people believe the situation *will* be fixed, the less they are willing to countenance any negative personal impact. People who would not object much to a tax increase to fund some unnecessary government program will fight tooth and nail against the same increase if it is necessary *but not sufficient* to maintain solvency, unless they are sufficiently persuaded the rest of the necessary measures will be taken. This is, unfortunately, impossible as the government has squandered away every ounce of public trust it ever possessed.

    Therefore, increasingly difficult circumstances will naturally, logically, lead to decreasing will to deal with those circumstances.

  5. “Greece – Our Debt, Your Problem“

    If you owe the bank 100 grand, its your problem, if you owe the bank 100 million its the banks problem.
    FM reply: Like so many things, what applies to a single entity does not work on a systemic level. As Weimar and America discovered when banks failed during the Great Depression. As America learned during the S&L Crisis. As America learned during this recession.

  6. Moobs ,manbags – there surely must be too many oestrogens in the water if men now need manpads at a certain time of the month .

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