Archive for the 'Big Government' Category
Posted by David Foster on 4th October 2015 (All posts by David Foster)
(Today marks the 58th anniversary of the Sputnik launch, making it an appropriate time to rerun this review, which I originally posted in February of this year)
Rockets and People, by Boris E Chertok
Boris Chertok’s career in the Russian aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.” In this series, Chertok really does suck you into his world.
Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.
Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”
Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”
So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.” Zero tolerance!
Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position. Later in his career, he would also wind up in difficulties because of his Jewish heritage.
The memoir includes dozens of memorable characters, including:
*Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.
*Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.
*Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.
*Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.
*Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)
*Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.
*Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.
*Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime. Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944. A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out. His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.
Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.
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Posted in Aviation, Big Government, Biography, Book Notes, Leftism, Management, Military Affairs, Russia, Society, Space, Tech, Transportation | 3 Comments »
Posted by Michael Kennedy on 3rd October 2015 (All posts by Michael Kennedy)
Obama was an unusual candidate for president in 2008. I had serious questions in 2008.
One criticism of Obama is that his portfolio is mighty thin. He has no record. Well, he actually does and and here it is. Pretty interesting.
It’s a lengthy record filled with core liberal issues. But what’s interesting, and almost never discussed, is that he built his entire legislative record in Illinois in a single year.
Why was that ? In 2002, the Democrats took over the Illinois legislature, not because of Bush as the reporter says, but because the Republican governor got caught selling drivers’ licenses to truckers with bad driving records. A disastrous truck accident splashed the whole story across the newspapers and the Democrats took over in the next election.
The white, race-baiting, hard-right Republican Illinois Senate Majority Leader James “Pate” Philip was replaced by Emil Jones Jr., a gravel-voiced, dark-skinned African-American known for chain-smoking cigarettes on the Senate floor.
Jones had served in the Illinois Legislature for three decades. He represented a district on the Chicago South Side not far from Obama’s. He became Obama’s kingmaker.
Several months before Obama announced his U.S. Senate bid, Jones called his old friend Cliff Kelley, a former Chicago alderman who now hosts the city’s most popular black call-in radio program.
I called Kelley last week and he recollected the private conversation as follows:
“He said, ‘Cliff, I’m gonna make me a U.S. Senator.’”
“Oh, you are? Who might that be?”
Obama ended up in the US Senate because the GOP Senator, Peter Fitzgerald, did not run for re-election. Why ?
While State Senator he was a member of a group of conservative state senators elected in 1992 who often challenged the leadership of the Illinois Republican Party and were dubbed the “Fab Five”, the group also included, Steve Rauschenberger, Dave Syverson, Patrick O’Malley and Chris Lauzen.
After a hard-fought primary victory against Illinois Comptroller Loleta Didrickson, in which the latter had the support of most national and state-level Republican leaders, Fitzgerald defeated first-term Democratic incumbent U.S. Senator Carol Moseley Braun in 1998, and served for one term in the U.S. Senate. He was the first Republican in Illinois to win a U.S. Senate race in 20 years, and the only Republican challenger in the country to defeat an incumbent Democratic senator in the 1998 election cycle. Although Moseley Braun was dogged by negative publicity of corruption charges, Fitzgerald defeated her by only 2.9%.
Fitzgerald is a staunch conservative on such issues as opposition to abortion (except to save the life of the mother), gun control, gay marriage and taxes, but on some issues, particularly environmental issues — he opposed drilling in the Arctic National Wildlife Refuge throughout his tenure in the US Senate — he broke with conservative colleagues. He was one of only a handful of GOP Senators to support the McCain-Feingold campaign finance reform legislation.
He was a “maverick” and was not supported by “the Illinois Combine,” a term coined by columnist John Kass to describe the bipartisan corruption in Illinois politics that has brought the state to bankruptcy.
I called former U.S. Sen. Peter Fitzgerald, the Republican maverick from Illinois who tried to fight political corruption and paid for it. For this sin, he was driven out of Illinois politics by political bosses, by their spinners and media mouthpieces, who ridiculed him mercilessly.
Senator, what do you call that connection that Stuart Levine describes from the witness stand, you know that arrangement across party lines, with politically powerful men leveraging government to make money — what do you call it?
“What do you call that Illinois political class that’s not committed to any party, they simply want to make money off the taxpayers?” Fitzgerald said. “You know what to call them.”
“The Illinois Combine,” Fitzgerald said. “The bipartisan Illinois political combine. And all these guys being mentioned, they’re part of it.”
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Posted in Big Government, Elections, Illinois Politics, Islam, Leftism, Middle East | 23 Comments »
Posted by David Foster on 20th September 2015 (All posts by David Foster)
(Originally posted in August 2014. I think the current situation in Europe makes it appropriate for a rerun)
Menace in Europe: Why the Continent’s Crisis Is America’s, Too by Claire Berlinski
I read this book shortly after it came out in 1996, and just re-read it in the light of the anti-Semitic ranting and violence which is now ranging across Europe. It is an important book, deserving of a wide readership.
The author’s preferred title was “Blackmailed by History,” but the publisher insisted on “Menace.” Whatever the title, the book is informative, thought-provoking, and disturbing. Berlinski is good at melding philosophical thinking with direct observation. She holds a doctorate in international relations from Oxford, and has lived and worked in Britain, France, and Turkey, among other countries. (Dr Berlinski, may I call you Claire?)
The book’s dark tour of Europe begins in the Netherlands, where the murder of film director Theo van Gogh by a radical Muslim upset at the content of a film was quickly followed by the cancellation of that movie’s planned appearance at a film festival–and where an artist’s street mural with the legend “Thou Shalt Not Kill” was destroyed by order of the mayor of Rotterdam, eager to avoid giving offense to Muslims. (“Self-Extinguishing Tolerance” is the title of the chapter on Holland.) Claire moves on to Britain and analyzes the reasons why Muslim immigrants there have much higher unemployment and lower levels of assimilation than do Muslim immigrants to the US, and also discusses the unhinged levels of anti-Americanism that she finds among British elites. (Novelist Margaret Drabble: “My anti-Americanism has become almost uncontrollable. It has possessed me, like a disease. It rises up in my throat like acid reflux…”) While there has always been a certain amount of anti-Americanism in Britain, the author notes that “traditionally, Britain’s anti-American elites have been vocal, but they have generally been marginalized as chattering donkeys” but that now, with 1.6 million Muslim immigrants in Britain (more worshippers at mosques than at the Church of England), the impact of these anti-Americans can be greatly amplified. (Today, there are apparently more British Muslims fighting for ISIS than serving in the British armed forces.)
One of the book’s most interesting chapters is centered around the French farmer and anti-globalization leader Jose Bove, whose philosophy Berlinski summarizes as “crop worship”….”European men and women still confront the same existential questions, the same suffering as everyone who has ever been born. They are suspicious now of the Church and of grand political ideologies, but they nonetheless yearn for the transcendent. And so they worship other things–crops, for example, which certain Europeans, like certain tribal animists, have come to regard with superstitious awe.”
The title of this chapter is “Black-Market Religion: The Nine Lives of Jose Bove,” and Berlinski sees the current Jose Bove as merely one in a long line of historical figures who hawked similar ideologies. They range from a man of unknown name born in Bourges circa AD 560, to Talchem of Antwerp in 1112, through Hans the Piper of Niklashausen in the late 1400s, and on to the “dreamy, gentle, and lunatic Cathars” of Languedoc and finally to Jean-Jacques Rousseau. Berlinski sees all these people as being basically Christian heretics, with multiple factors in common. They tend appeal to those whose status or economic position is threatened, and to link the economic anxieties of their followers with spiritual ones. Quite a few of them have been hermits at some stage in their lives. Most of them have been strongly anti-Semitic. And many of the “Boves” have been concerned deeply with purity…Bove coined the neologism malbouffe, which according to Google Translate means “junk food,” but Berlinski says that translation “does not capture the full horror of bad bouffe, with its intimation of contamination, pollution, poison.” She observes that “the passionate terror of malbouffe–well founded or not–is also no accident; it recalls the fanatic religious and ritualistic search for purity of the Middle Ages, ethnic purity included. The fear of poisoning was widespread among the millenarians…” (See also this interesting piece on environmentalist ritualism as a means of coping with anxiety and perceived disorder.)
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Posted in Anti-Americanism, Big Government, Book Notes, Britain, Christianity, Civil Society, Deep Thoughts, Europe, Film, France, Germany, History, Immigration, Islam, Judaism, Leftism, Religion | 5 Comments »
Posted by Michael Kennedy on 28th August 2015 (All posts by Michael Kennedy)
UPDATE: Tom Perkins has now published the defense of Carly Fiorina that she needed. He had to do it as a full page ad since they would not accept a response. This is the answer and puts her in place to catch the debris if Trump blows up.
“Not only did she save the company from the dire straits it was in, she laid the foundation for HP’s future growth,” reads the ad, which is signed by Tom Perkins, a member of the HP board during much of Fiorina’s tenure and the founder of California venture capital firm Kleiner Perkins Caulfield & Byers. “I have no question that Carly is a transformational leader who uniquely has both vision and the expertise to implement it.”
Peggy Noonan has a column today that has lots of people talking.
I have been pessimistic about the future of the country for a while. Recently, I have been very pessimistic.
One of the arguments for the impossibility of an event is lack of previous failure. “It never failed before and thus can never fail ever”. The Washington Post’s editorial board invokes a variant of this logic to refute Donald Trump’s border policy, arguing there are so many illegal immigrants it is too expensive to deport them all, leaving no alternative but to accept more.
Naturally, the WaPo is certain they know what could happen.
A useful case study is California, whose economy accounts for about 13 percent of U.S. gross domestic product and whose 2.6 million undocumented workers include almost a tenth of the state’s workforce.
Well, guess what ? Peggy is talking to Hispanics.
Something is going on, some tectonic plates are moving in interesting ways. My friend Cesar works the deli counter at my neighborhood grocery store. He is Dominican, an immigrant, early 50s, and listens most mornings to a local Hispanic radio station, La Mega, on 97.9 FM. Their morning show is the popular “El Vacilón de la Mañana,” and after the first GOP debate, Cesar told me, they opened the lines to call-ins, asking listeners (mostly Puerto Rican, Dominican, Mexican) for their impressions. More than half called in to say they were for Mr. Trump. Their praise, Cesar told me a few weeks ago, dumbfounded the hosts. I later spoke to one of them, who identified himself as D.J. New Era. He backed Cesar’s story. “We were very surprised,” at the Trump support, he said. Why? “It’s a Latin-based market!”
What is going on ?
On the subject of elites, I spoke to Scott Miller, co-founder of the Sawyer Miller political-consulting firm, who is now a corporate consultant. He worked on the Ross Perot campaign in 1992 and knows something about outside challenges. He views the key political fact of our time as this: “Over 80% of the American people, across the board, believe an elite group of political incumbents, plus big business, big media, big banks, big unions and big special interests—the whole Washington political class—have rigged the system for the wealthy and connected.” It is “a remarkable moment,” he said. More than half of the American people believe “something has changed, our democracy is not like it used to be, people feel they no longer have a voice.”
I could not agree more. I keep recommending Angelo Codevilla’s essay in American Spectator. I even saved it on this blog because Spectator dropped it for a while. Now it seems to have become such a topic of conversation that it is back on their web site.
I have even been saying that we need a revolution, and maybe it is coming.
“It is accepted that primary schools have increasing numbers of pupils, which causes all manner of problems, but what is frequently not referred to is why we have such a boom in numbers.
“And the answer is unlimited immigration into this country. It hits some areas harder than others but there cannot be many primary schools in the country which have not been affected at all,” said Mr Nuttall, UKIP Education spokesman.
Wow ! That is Britain ! I will be in Britain in little more than a week and it will be interesting to have this conversation with my friends, a retired British Army physician and his wife. We will go to Belgium while avoiding the Chunnel to avoid rioting at Calais as “migrants” try to invade Britain though the Chunnel in search of the Dole.
This might even be the start of the West trying to save itself from the predicted Suicide.
In 1964, as today, it is very easy to see how a thinking person might see the intellectual drift to the left as a move toward societal suicide. For liberalism is a cry for the supremacy of general good intentions over the practical application of common sense. Burnham said that liberals are often driven by “profound non-rational, often anti-rational sentiments and impulses.” Ideas like the welfare state and leniency on criminals to facilitate rehabilitation may have sounded good coming out of the mouth of a liberal, but they were disastrous in practice.
Burnham’s book, “Suicide of the West”, was in effect a warning that leftward drift would ultimately destroy all affluence and freedom in the world. Fortunately, many of the readers of his book heeded Burnham’s cry and helped stem the leftward movement of policy and ideas in America.
Is it ending ?
Posted in Big Government, Britain, Civil Society, Current Events, Elections, Immigration, Leftism, Politics, USA | 16 Comments »
Posted by Michael Kennedy on 24th August 2015 (All posts by Michael Kennedy)
I have been pessimistic for several years. That may be just my own psychological makeup but I am not the only one.
California is getting a bit agitated about what is happening in China.
Gyrations in the stock market have taken California’s fragile finances for a ride before — when the dot-com bubble burst, when the Wall Street crash sank the national economy less than a decade ago.
So when the market continued its dive Monday, state officials began glancing around for their seat belts.
More than most states, California depends heavily on taxes from the wealthy, pulling about half of its income tax revenue from just 1% of residents in recent years.
California is a top down society because it depends on income tax. Texas doesn’t and its state government is funded by sales tax, which everyone pays, even illegals.
The Obama Administration has been playing a Ponzi Scheme for years.
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.
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Posted in Big Government, Book Notes, Civil Society, Conservatism, Crony Capitalism, Current Events, Economics & Finance, Leftism, Politics | 5 Comments »
Posted by David Foster on 22nd August 2015 (All posts by David Foster)
This great post by Richard Fernandez reminded me of a quote from George Eliot:
The sense of security more frequently springs from habit than from conviction, and for this reason it often subsists after such a change in the conditions as might have been expected to suggest alarm. The lapse of time during which a given event has not happened is, in this logic of habit, constantly alleged as a reason why the event should never happen, even when the lapse of time is precisely the added condition which makes the event imminent.
(from Silas Marner)
Posted in Big Government, Deep Thoughts, Economics & Finance, Political Philosophy, Tech | 20 Comments »
Posted by David Foster on 17th August 2015 (All posts by David Foster)
Glenn Reynolds has an article in USA Today: free markets automatically create and transmit negative information, while socialism hides it. Excerpt:
It is simple really: When the “Great Leader” builds a new stadium, everyone sees the construction. Nobody sees the more worthwhile projects that didn’t get done instead because the capital was diverted, through taxation, from less visible but possibly more worthwhile ventures — a thousand tailor shops, bakeries or physician offices.
At the same time, markets deliver the bad news whether you want to hear it or not, but delivering the bad news is not a sign of failure, it is a characteristic of systems that work. When you stub your toe, the neurons in between your foot and your head don’t try to figure out ways not to send the news to your brain. If they did, you’d trip a lot more often. Likewise, in a market, bad decisions show up pretty rapidly: Build a car that nobody wants, and you’re stuck with a bunch of expensive unsold cars; invest in new technologies that don’t work, and you lose a lot of money and have nothing to show for it. These painful consequences mean that people are pretty careful in their investments, at least so long as they’re investing their own money. Bureaucrats in government do the opposite, trying to keep their bosses from discovering their mistakes.
Indeed, this is an important point, and one that is too rarely understood. Rose Wilder Lane, the author and political thinker, offered the example of British versus French and Spanish approaches to colonial management:
The Governments gave them (in the case of the French and Spanish colonies–ed) carefully detailed instructions for clearing and fencing the land, caring for the fence and the gate, and plowing and planting, cultivating, harvesting, and dividing the crops…The English Kings were never so efficient. They gave the land to traders. A few gentlemen, who had political pull enough to get a grant, organized a trading company; their agents collected a ship-load or two of settlers and made an agreement with them which was usually broken on both sides…To the scandalized French, the people in the English colonies seemed like undisciplined children, wild, rude, wretched subjects of bad rulers.
Yet the English colonies, economically-speaking, were generally much more successful.
RWL also explained the way in which central planning demands the categorization of people:
Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes. But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite diversity of human beings. The most slavish multitude of men that was ever called “demos” or “labor” or “capital” or”agriculture” or “the masses,” actually are men; they are not sheep. Naturally, by their human nature, they escape in all directions from regulations applying to non-existent classes. It is necessary to increase the number of men who supervise their actions. Then (for officials are human, too) it is necessary that more men supervise the supervisors.
And the planner will always demand more power:
If he wants to do good (as he sees good) to the citizens, he needs more power. If he wants to be re-elected, he needs more power to use for his party. If he wants money, he needs more power; he can always sell it to some eager buyer. If he wants publicity, flattery, more self-importance, he needs more power, to satisfy clamoring reformers who can give him flattering publicity.
Read Glenn’s whole article, and my post about Rose Wilder Lane’s ideas and writing
Posted in Big Government, Britain, Economics & Finance, France, Leftism, Political Philosophy, USA | 4 Comments »
Posted by Dan from Madison on 11th August 2015 (All posts by Dan from Madison)
Years ago, Shannon Love did a series of posts on these pages about “number gut”. From this post:
A number gut is an intuitive feel for the possible magnitude of a particular number that describes a particular phenomenon. A good number gut tells you if the results of some calculation are at least in the ball park.
My number gut (or b.s. detector, in this case) went off today when I saw this story. Here is the money:
Chicago Public Schools officials on Monday proposed a $5.7 billion operating budget for the upcoming school year…
Holy crap that is a lot of money. There are 396,000 students in the CPS. $5.7bb / 396k = $15,447 per student. Really.
From this article from 2014 about the most expensive private schools in Illinois, it looks like all of the students could go to Loyola Academy, and can almost all go to St. Ignatius College Prep for that kind of money.
Posted in Academia, Big Government, Chicagoania, Education | 15 Comments »
Posted by Carl from Chicago on 9th August 2015 (All posts by Carl from Chicago)
Dan and I follow municipal bonds, which is a bit more exciting than it sounds. The State of Illinois, the City of Chicago, Cook County, and many other entities in which I am a semi-unwitting participant will likely soon be on the front pages of newspapers as it sinks in that we can never repay these debts.
Back in late 2008, during the height of that financial crisis, the State of Illinois issued debt. In this post I basically asked the question “Who is buying this crap?” and the answer was JP Morgan, showing its solidarity (in a way) with the state of Illinois by buying the ENTIRE issue.
Puerto Rico is the new problem child of debt failure, and as Dan calls it, a “gapers block” over the entire municipal debt market. There were a lot of good reasons to buy Puerto Rico municipal bonds for many years – it was tax exempt, it had high yields, some of it was insured and / or tied to revenue streams like power or water, and historically there had been few or no failures of large-scale municipal bond issuers. It was great to own this debt and collect the high interest rates, as long as you watched it and got out before it collapsed. In a way this is “momentum investing” of sorts – get in and enjoy the ride up, but make sure you clear the exit before everyone else runs out of the movie theater screaming “fire”.
But the question in the back of my mind was always “Who is buying that crap”. Not sophisticated investors who knew how to ride the wave up and get out before it collapsed, but people who honestly believed that a set of statements by politicians and / or laws as they were currently constructed would magically allow a tiny and impoverished island to pay inordinate debts while their economy imploded around them.
A recent NY Times article titled “Pain of Puerto Rico’s Debt Crisis Is Weighing on the Little Guy, Too” provided a timely answer to my question.
To Lev Steinberg, it seemed like a good place to park his nest egg. Puerto Rico bonds offered high returns and tax-free income. And there was little chance, his broker assured him, that the government would default on its debt. So Mr. Steinberg went all in, investing more than 85 percent of his retirement savings in funds with large concentrations of Puerto Rico bonds.“They told me this was safe,” said Mr. Steinberg, a 64-year-old mathematics professor at the University of Puerto Rico, “that the legal protections to repay the bonds were strong.”
The NY Times article describes how local brokers and banks created products that leveraged up these bonds with borrowed money and then they were sold to Puerto Rico citizens (they were illegal on the mainland). The article said that 20% of Puerto Rican debt is owed to local citizens, and they bought many of the most “toxic” issuances (those with the least protections, like pension obligation bonds).
Thank you, NY Times, for helping to answer the timeless question “who is buying that crap”. The answer is gullible citizens, who believed in their government’s promises, and also thought that years and years of high returns could be manufactured endlessly out of thin air without corresponding risk.
Cross posted at LITGM
Posted in Big Government, Business, Economics & Finance | 15 Comments »
Posted by Zenpundit on 5th August 2015 (All posts by Zenpundit)
Cross-posted at Zenpundit.com
GOP Front Runner, Donald J. Trump (Image: Michael Vadon)
A friend sent an essay by the prolific IR scholar, Professor Angelo Codevilla that had been posted at Powerline Blog. It was good.
For the unfamiliar, Codevilla often writes on national security and intelligence matters and some readers may be familiar with his (with Paul Seabury) book, War: Ends and Means; but in recent years Codevilla has, like Walter Russell Mead and a number of other intellectuals, turned his attention to the shoddy performance, ethical deficiencies and arrogant demands of the new American “ruling class”, writing a biting critique of their “meritocratic regime”.
In his essay for Powerline, Codevilla turns his attention to the political phenomenon of the improbable GOP presidential front runner, billionaire and reality TV star, Donald Trump. Unsurprisingly, Dr. Codevilla is not a huge fan of the bombastic Mr. Trump, but his analysis of why Trump has captured the moment so easily has some astute insights about the decaying state of our political system and the seething anger of the electorate:
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Posted in Big Government, Book Notes, Civil Liberties, Crony Capitalism, Current Events, Elections, Leftism, Media, National Security, Politics, Society, Tea Party, The Press, USA | 15 Comments »
Posted by Carl from Chicago on 2nd August 2015 (All posts by Carl from Chicago)
New Clean Air Act regulations have recently been proposed by the EPA.
President Obama will unveil on Monday a set of environmental regulations devised to sharply cut planet-warming greenhouse gas emissions from the nation’s power plants and ultimately transform America’s electricity industry. The rules are the final, tougher versions of proposed regulations that the Environmental Protection Agency announced in 2012 and 2014. If they withstand the expected legal challenges, the regulations will set in motion sweeping policy changes that could shut down hundreds of coal-fired power plants, freeze construction of new coal plants and create a boom in the production of wind and solar power and other renewable energy sources.
What is interesting is that the EPA recently had their ever-expanding mandate struck down by the Supreme court just a few short weeks ago, when their attempt to kill off coal through regulation of mercury and other pollutants was invalidated for not sufficiently weighing the cost of the proposed initiative.
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Posted in Big Government, Business, Current Events, Economics & Finance, Energy & Power Generation, Environment | 28 Comments »
Posted by Michael Kennedy on 1st August 2015 (All posts by Michael Kennedy)
Socialism is on its last legs except for college faculty lounges. Venezuela is now seizing private companies’ facilities.
“There is an economic war here and this company, Polar, is at the heart of it. They hide products from the population, and inflate their prices!”
The government had first notified the landlord of plans to expropriate the industrial park in 2013, Nestle spokesman Andres Alegrett said by telephone from Caracas on Thursday. Nestle used the facility to dispatch about 10 percent of its products in the country, supplying sweets and drinks to the western side of Greater Caracas, he said.
Nestle is no stranger to Socialism. Jonah Golberg noted Nestle’s connection years ago.
About ten years ago I went on a junket to Switzerland and attended a talk with the CEO of Nestlé. Listening to him, it became very clear to me that he had little to no interest in free markets or capitalism properly understood. He saw his corporation as a “partner” with governments, NGOs, the U.N., and other massive multinationals. The profit motive was good for efficiency and rewarding talent, but beyond that, he wanted order and predictability and as much planning as he could get. I think that mindset informs the entire class of transnational progressives, the shock troops of what H. G. Wells hoped would lead to his liberal-fascist “world brain.”
Yes, Nestle has a history of cooperation with various do-gooder initiatives although it has kept its eye on profits.
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Posted in Americas, Big Government, Crony Capitalism, Economics & Finance, Leftism, Politics | 5 Comments »
Posted by Jonathan on 27th July 2015 (All posts by Jonathan)
To explain the inexplicable rise of Donald Trump is to calibrate the anger of a fed-up crowd that is enjoying the comeuppance of an elite that never pays for the ramifications of its own ideology. The elite media, whose trademark is fad and cant, writes off the fed-up crowd as naïve and susceptible to demagoguery as the contradictory and hypocritical Trump manipulates their anger. In fact, they probably got it backwards. Trump is a transitory vehicle of the fed-up crowd, a current expression of their distaste for both Democratic and Republican politics, but not an end in and of himself. The fed-up crowd is tired of being demagogued to death by progressives, who brag of “working across the aisle” and “bipartisanship” as they ram through agendas with executive orders, court decisions, and public ridicule. So the fed-ups want other conservative candidates to emulate Trump’s verve, energy, eagerness to speak the unspeakable, and no-holds barred Lee Atwater style — without otherwise being Trump.
This is one of VDH’s best recent columns and explains well the appeal (for now) of Donald Trump to conservative voters. Worth reading.
Posted in Big Government, Conservatism, Elections, Leftism, Obama, Politics, Tea Party, USA | 22 Comments »
Posted by Michael Kennedy on 25th July 2015 (All posts by Michael Kennedy)
At the “Netroots Nation Conference, while an illegal alien was interviewing Martin O’Malley, a Democrat candidate for president, the stage was invaded by a black convicted felon (embezzlement) named Tia Oso who protested when O’Malley said “All lives matter.”
Chanting, “What side are you on, my people, what side are you on?” and “Black lives matter,” the demonstrators moved to the front of the ballroom about 20 minutes into the event as Mr. O’Malley discussed proposed changes to Social Security. They remained there, heckling the candidates and posing questions, until organizers shut down the event, one of the centerpieces of the annual Netroots Nation conference.
The Democrats are going to have serious problems with the black activist movement.
The black radicals even plan to dig up the remains of General Nathan Bedford Forrest and his wife, law or no law. This sort of lunatic behavior is going to discredit this stuff pretty soon.
Of course the Connecticut Democrat State Central Committee voted to remove the names Jefferson and Jackson from their annual celebration, so the black radicals not that much more crazy.
Connecticut state Democrats voted Wednesday to remove the names of former presidents Thomas Jefferson and Andrew Jackson from their annual fundraising dinner, reportedly because of their ties to slavery.
According to the Hartford Courant, it only took two minutes for the Connecticut Democrat State Central Committee to unanimously pass a resolution stripping both names from the title of the Jefferson-Jackson-Bailey Dinner.
Party Chairman Nick Balletto proposed the change. He told the Daily Caller the decision, which apparently came under pressure from the NAACP, was about party identity.
Yup, the lunacy continues.
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Posted in Big Government, Civil Society, Conservatism, Crony Capitalism, Economics & Finance, Elections, Politics | 17 Comments »
Posted by Sgt. Mom on 24th July 2015 (All posts by Sgt. Mom)
There’s things going on that I can’t really write about these days. This is a bit painful, much as I have become accustomed over the last twelve or thirteen years to blogging about things that concern me; things both personal and political and which I have always tossed out there in the ether for consideration. It’s a kind of ‘thinking aloud’ – writing a note, sealing it in a bottle and throwing it into the vast ocean of the blogosphere, whereupon someone may discover it, uncork the bottle, read it and say to themselves – “My, that is interesting!” Or relevant, insightful, et cetera. Which I can’t do any more as regards the family; in the wake of Dad’s death, Mom came to feel that certain of my musings and posts were an invasion of family privacy, and directly asked me not to blog about them – so I have not, in deference to her wishes. She is as well as can be expected, though … and the current situation is something that Pip and Sander are handling, as they are geographically the closest.
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Posted in Big Government, Civil Society | 34 Comments »
Posted by Michael Kennedy on 5th July 2015 (All posts by Michael Kennedy)
I’ve been planning trip to Greece for months. Back in January, I decided to wait until the Greek monetary crisis was closer to resolution. Finally in May, I made reservations for September. I even posted my plans here.
Well, today it may be all going glimmering. The Greeks have apparently voted NO to the EU deal.
Greece has overwhelmingly rejected Europe’s latest bailout package, plunging the country’s future in the Eurozone into jeopardy.
With most of the votes counted in a referendum that will shape the future of the continent, the ‘No’ campaign has a staggering 61 per cent of the vote – 22 points ahead.
German Chancellor Angela Merkel and French President Francois Hollande called for an EU crisis summit to find a ‘solution’ for Greece, with leaders set to meet in Brussels on Tuesday.
Thousands of anti-austerity voters took to the streets in celebration as the leader of the pro-EU ‘Yes’ campaign resigned, with an official announcement of the final result imminent.
But German politicians warned of ‘disaster’ as they accused Greek Prime Minister Alexis Tsipras of ‘tearing down bridges’ between Greece and Europe.
Now what ?
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Posted in Big Government, Current Events, Europe, Leftism, Public Finance | 32 Comments »
Posted by David Foster on 1st July 2015 (All posts by David Foster)
Posted in Anti-Americanism, Big Government, Business, Civil Society, Film, History, Human Behavior, Internet, Leftism, Management, Society, Tech, Transportation | 15 Comments »
Posted by Michael Kennedy on 27th June 2015 (All posts by Michael Kennedy)
The hysteria is in high gear over the Confederate battle flag. The controversy began with the the shooting of nine people in the Emmanuel AME Church in Charleston, SC by a schizophrenic young man. South Carolina is, of course, the first state to secede from the union after Lincoln’s election in 1860. Since the Civil War, South Carolina has been ruled by the Democratic Party until the past few years when Republicans have elected the governor and legislature. In 1962, in an act of defiance, Governor Fritz Hollings (D) presided over the placing to the Confederate flag on the capital building. The flag was subsequently moved to a Confederate memorial on the capital grounds by a Republican governor.
Meanwhile, Fox News’s Special Report noted this fact during one of the show’s “All-Star Panel” segments with host Bret Baier alluding to it as well as how a Republican was in office when the flag was taken down from the dome and moved to the Capitol’s grounds as a compromise in 1998.
The shooter appears to me to be a paranoid schizophrenic who lived in appalling conditions with a weird father who seemed to care little about his welfare.
The hysteria about the Confederate flag seems to be a planned assault on southern states and on conservative politics. The fact that the South was ruled by Democrats until very recently is also an issue for these people who resent the recent appeal of the Republican Party. The cry of “Racism” seems a bit exaggerated when there is a trend recognized even by the leftist New York Times of black families moving back to the southern states.
The percentage of the nation’s black population living in the South has hit its highest point in half a century, according to census data released Thursday, as younger and more educated black residents move out of declining cities in the Northeast and Midwest in search of better opportunities.
The share of black population growth that has occurred in the South over the past decade — the highest since 1910, before the Great Migration of blacks to the North — has upended some long-held assumptions.
Both Michigan and Illinois, whose cities have rich black cultural traditions, showed an overall loss of blacks for the first time, said William Frey, the chief demographer at the Brookings Institution.
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Posted in Big Government, Civil Society, History, Leftism, Libertarianism, Political Philosophy, Politics | 33 Comments »
Posted by Michael Kennedy on 25th June 2015 (All posts by Michael Kennedy)
UPDATE: The decision is analyzed at Powerline today with quotes from the decision.
The Affordable Care Act contains more than a few examples of inartful drafting. (To cite just one, the Act creates three separate Section 1563s. See 124 Stat. 270, 911, 912.) Several features of the Act’s passage contributed to that unfortunate reality. Congress wrote key parts of the Act behind closed doors, rather than through “the traditional legislative process.” Cannan, A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History, 105 L. Lib. J. 131, 163 (2013). And Congress passed much of the Act using a complicated budgetary procedure known as “reconciliation,” which limited opportunities for debate and amendment, and bypassed the Senate’s normal 60-vote filibuster requirement. Id., at 159–167.
Therefore, Roberts rewrote it. Nice !
Today, the Supreme Court upheld the Obamacare state exchange subsidies.
The Supreme Court has justified the contempt held for the American people by Jonathan Gruber. He was widely quoted as saying that the “stupidity of the American people “ was a feature of the Obamacare debate. This does not bother the left one whit.
Like my counterparts, I have relied heavily on Gruber’s expertise over the years and have come to know him very well. He’s served as an explainer of basic economic concepts, he’s delivered data at my request, and he’s even published articles here at the New Republic. My feelings about Gruber, in other words, are not that of a distant observer. They are, for better or worse, the views of somebody who holds him and his work in high esteem.
The New Republic is fine with him and his concepts.
It’s possible that Gruber offered informal advice along the way, particularly when it came to positions he held strongly—like his well-known and sometimes controversial preference for a strong individual mandate. Paul Starr, the Princeton sociologist and highly regarded policy expert, once called the mandate Gruber’s “baby.” He didn’t mean it charitably.
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Posted in Big Government, Civil Society, Conservatism, Current Events, Economics & Finance, Health Care, Leftism, Medicine, Obama, Politics | 30 Comments »
Posted by Michael Kennedy on 14th June 2015 (All posts by Michael Kennedy)
Today, an interesting column was published suggesting that, if the Republicans don’t beat Hillary, they should just disband the party.
I think this makes some sense. We have an attractive group of candidates and some valid issues, including the economy and foreign policy. She is a terrible candidate.
Add this to the mounting scandals, polls showing a lack of trust for her, the historical difficulty of political parties winning three presidential elections in a row, and the deep bench of fresh-faced Republican options, and the GOP should be in prime position to win the next election.
But the next election will test whether demographic headwinds are too much for Republicans to overcome.
Maybe the country is just not serious about issues anymore.
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Posted in Big Government, Civil Society, Conservatism, Elections, History, Leftism, Libertarianism, Morality and Philosphy, Political Philosophy, Tea Party | 22 Comments »
Posted by Dan from Madison on 13th June 2015 (All posts by Dan from Madison)
I have written about optics before and am going to take another trip down this trail.
The prison escape in New York has my interest. I am sort of rooting for the bad guys. But not for the wrong reasons. The reason I am rooting for the bad guys is that I believe that folks need to understand that they need to be prepared to take care of themselves in emergency situations, rather than relying on “professionals”. In the end I want the murderers caught, of course, but in the meantime, we have some delicious drama brewing.
As I wrote back when the Boston police and others make a Keystone Cops type showing trying to chase down the Tsarnaev brothers, these are some pretty poor optics for the police, but they are doing everything they can to make it look better. I see the same old nonsense on TV – a line of cops saluting and marching down the street, all to make a show to the locals and/or folks watching on TV that they have overwhelming force and are going to catch the bad guys. This was done in Boston and also in Baltimore. Who put this in the official police manual to handle a crisis? I wonder if the manual looks like this:
Step one. We have a crisis. Everyone line up, salute and march down the street.
Step two. ??
Step three. Crisis solved. Praise all and treat everyone like a hero.
This is one of the most ridiculous things I have seen so far from a few days ago:
What on earth is going on here? Is the sniper actually looking to fire at something? Why aren’t the other guys at all concerned? Why is he laying on top of a van?
I keep hearing that the man hunt is “intensifying”. How much more intense can it get? They have all sorts of Hummers, choppers, sniper gear, and cops from who knows how many districts all looking for a couple of guys who are either laughing their asses off somewhere in Mexico, or very much hurting by now somewhere in the woods. Somewhere in the woods that all of these forces gathered have missed several times now.
I am sure it is super pleasant to be living in these towns right now.
What on earth was Cuomo touring the escape site supposed to prove? He will have zero involvement in the investigation or manhunt.
I know a thing or two about mechanicals, tools and steam pipes – we are not hearing half of what these guys did do get out of the prison – much of what the media has reported doesn’t make sense at all. I understand that the media is on the cops’ tether at this point, but I will be very interested to someday read just exactly what these guys did to escape. I imagine it took them years of planning.
If they get caught, we will hear some Seargeant or whoever claim how heroic everyone was, just like always.
I hope the public gets the sense that just like when the Tsarnaev brothers were keeping thousands of “professionals” at bay, just like these escapees are that they need to prepare to be on their own just a bit. But I won’t get my hopes up. So far, I would say that the cops have some pretty bad optics going as of now.
Posted in Big Government, Civil Liberties, Civil Society, Crime and Punishment, Current Events | 17 Comments »
Posted by Sgt. Mom on 11th June 2015 (All posts by Sgt. Mom)
Some time since (Oh, heck was it in 2005, ten years ago? So it was.) I mused on the concept of public space, both in the general sense – of a large city – and the smaller sense, of a neighborhood … that is, the place that we live in, have our gardens and our households, where we have neighbors who know us, where we jog, walk our dogs, take an interest – from the mild to the pain-in-the-neck over-interested and judgmental. If our homes are our castles, then the neighborhood is our demesne.
And unless we are complete hermits, home-owners will take an interest in the demesne. I state that without fear of contradiction, and it does not matter if that demesne is in a strictly-gated upper-middle or upper-class community with real-live 24-hour security, a private and luxurious clubhouse with attached pool and attractively-landscaped park or a simple ungated, strictly crisscrossed-streets and cul-de-sacs development of modestly-priced starter houses without any HOA-managed extras like golf courses, swimming pools, fitness centers, jogging paths – indeed, anything beyond a little landscaping around the sign denoting the entrance to the development. This is where our homes are, and at the lower end of the economic scale of things, likely to have consumed a major portion of disposable income on the part of the householder. A good portion of our material treasure, in other words, is committed to those foundation, walls, roof and yard.
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Posted in Big Government, Business, Civil Liberties, Current Events, Law Enforcement, North America, Real Estate | 7 Comments »
Posted by Michael Kennedy on 11th June 2015 (All posts by Michael Kennedy)
UPDATE: The reaction is is now coming in.
That the Republican Establishment has lined up in lockstep with President Obama really tells you all you need to know about the minority wing of the Permanent Bipartisan Fusion Government — ever bigger, ever more secretive, ever more disdainful of American sovereignty and of the voters who put them in office. The measure has already passed in McConnell’s Senate, so its fate is now up to Boehner’s House:
Here we go !
For years we have had trade authority granted to presidents as “fast track” authority so the treaties don’t become bidding wars in Congress. The treaty has to be voted up or down as a single entity. This has been done under Democrat and Republican presidents with Republicans usually more in favor of free trade. Under Bill Clinton, we had The North American Free Trade Agreement or NAFTA which was controversial on issues like Mexican truck drivers qualifications.
Obama has delayed a trade treaty with Columbia for political reasons for years until the GOP dominated Congress ratified the treaty in 2012, eight years after it was negotiated under Bush.
Colombia’s Congress approved the agreement and a protocol of amendment in 2007. Colombia’s Constitutional Court completed its review in July 2008, and concluded that the Agreement conforms to Colombia’s Constitution. President Obama tasked the Office of the U.S. Trade Representative with seeking a path to address outstanding issues surrounding the Colombia FTA. The United States Congress then took on the agreement and passed it on October 12, 2011. The agreement went into effect on May 15, 2012.
At present President Obama is asking for “fast Track Authority” and may finally get it but the opposition is different this time.
The House will vote Friday on a bill that would give fast-track trade authority to President Barack Obama, a measure likely headed for passage in a close vote after months of lobbying by the White House and business groups.
Representative Kevin McCarthy, the California Republican who is majority leader, set out in a memo to lawmakers a two-day vote schedule designed to solidify support of Democrats who will back the bill. The House begins Thursday with a measure to promote trade with poorer countries.
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Posted in Big Government, Business, Current Events, International Affairs, Obama, Politics | 19 Comments »
Posted by David Foster on 10th June 2015 (All posts by David Foster)
Sgt Mom recently posted about the “Sad Puppies” affair: basically, it seems that the science-fiction publishing industry and its leading association and award structure have become highly politicized in the name of “progressivism”…in reaction, a contrarian movement arose called the “Sad Puppies” (there are also “Rabid Puppies”)…and these groups have been vitriolically attacked by some prominent members of the SF publishing establishment.
It strikes me that this would be a good time to update and repost my earlier Theme roundup of posts on the general topic of politicization.
A very funny post about a very serious topic. Sarah Hoyt, herself a science fiction writers, tells of (and illustrates) some of her own experiences with the Science Fiction Writers Association.
What kind of things do you think they talk about at a convention of the National Art Education Association? Best ways to teach perspective and watercoloring techniques? How to explain Expressionism and Impressionism? Not these days.
“Political correctness” has become a serious threat to American society
What makes people want to live in a politicized society, and what is day-t0-day life like once the complete politicization has been accomplished? In this post, I cite some thoughts from Sebastian Haffner, who came of age in Germany when the Nazi movement was casting its spell, and a vivid fictional passage from Ayn Rand, who grew up in the early Soviet Union.
Gleichschaltung. A word much favored by the Nazis, it means “coordination,” “making the same,” “bringing into line”…especially, in Nazi usage, “forcible coordination.” The orientation toward Gleichschaltung is very apparent in today’s “progressive” movement and today’s Democratic Party.
Prestigious Physics Professor Protests Politicization. Harold Brown, professor emeritus at the University of California Santa Barbara, explains the reasons for his resignation from the American Physical Society.
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Posted in Academia, Big Government, Civil Liberties, Civil Society, Current Events, Germany, History, Political Philosophy, Russia, USA | 19 Comments »