Archive for the 'Big Government' Category

In my last post — President Trump’s ‘Xanatos Gambit’ Trade Policy — I spoke to how President Trump has set up his political strategy on trade policy to make any outcome on the USMCA Trade agreement that he negotiated to replace the NAFTA agreement would be to his advantage over House Democrats and the “purchased by the multi-national corporation China Lobby” GOP Senators.  In this post I am going to lay out President Trump’s “Global  Energy Dominance” export policy’s “Xanatos Gambit” strategy tree vis-à-vis the 2020 presidential elections.

To start with, I’m going to refer you back to this passage from my last post on how the Trump Administration is “gaming” economic growth measurements:

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

The Trump Administration upon coming into office in January 2017 had a huge windfall of energy projects that the Obama Administration had held up approval of in the Federal Energy Regulatory Commission.   This windfall neither began nor ended with the  Keystone XL oil pipeline.  There was a whole cornucopia of oil and natural gas energy infrastructure projects that Democratic Party interests, only some of them environmental, that the Obama Administration was using the FERC to sit on for a whole lot of reasons that I refer to as “The Economic Cold Civil War.”

While the media was spending a great deal of time talking about things like the Congressional votes to open the Arctic Wildlife Refuge in the early days of the Trump Administration’s energy policy implementation.  President Trump spent a great deal of his early political capital on getting his earliest political appointments through the Senate to the FERC to get those projects turned loose as a part of President Trump’s “Global  Energy Dominance” export policy.  The first fruit of this export infrastructure energy policy focus started paying off with the  Louisiana Offshore Oil Port (LOOP) coming on-line in 2018.  See this Apr 16, 2019 article by Julianne Geiger at Oilprice.com:

U.S. Doubles Oil Exports In 2018

The United States nearly doubled its oil exports in 2018, the Energy Information Administration reporting on Monday, from 1.2 million barrels per day in 2017.

The 2.0 million barrels of oil per day exported in 2018 was in line with increased oil production, which averaged 10.9 million barrels per day last year, and was made possible by changes to the Louisiana Offshore Oil Port (LOOP) which allowed it to load VLCCs (Trent Note: Very Large Crude Carriers) .

The changes to LOOP and to the sheer volume of exports were not the only changes for the US crude oil industry. The destination of this oil shifted in 2018 as well, and even shifted within the year as the trade row between China and the United States took hold.

Overall, Canada remained the largest buyer of US oil in 2018, at 19% of all oil exports, according to EIA data. During the first half of 2018, the largest buyer of US crude oil was China, averaging 376,000 barrels per day. Due to the trade row, however, US oil exports to China fell to an average of just 83,000 barrels per day in the second half, after seeing zero exports to China in the months of August, September, and October.**

[**Please note above the nice thing about energy exports is how futile a energy user embargo is against it.  China’s economic embargo of US crude products only hurt itself.]

The impact of the Trump Administration’s energy export policies from those early days of his administration in terms of liquefied natural gas (LNG) export facilities are now impacting the American economy. A large part of the extra 0.7% GDP growth achieved over the 2.5% Wall Street forecasts in the first quarter of 2019 came from the Corpus Christ 1 and Sabine 5 LNG export facilities coming on-line in late 2018 and making their first full export capacity quarter in Jan – Mar 2019.  The Cameroon 1 and Elba Island 1-6 LNG export facilities were also scheduled to come on-line in Late Feb-Early March 2019, and were very likely large contributors to LNG export surge.

This is how CNBC described 2019’s 1st quarter:

Robust demand for Texas oil and gas in the first two months of 2019 pushed the state’s export activity into high gear, strongly outpacing the national rate and contrasting with a slight decline by California.

Texas represented nearly 20% of all U.S. exports in the January-February period while California accounted for roughly an 11% share.

California has seen its share of total U.S. exports fall in recent years while Texas has been growing its share due mainly to the new oil boom.

CNBC table of US Exports in the 1st Quarter of 2019  Source: https://www.cnbc.com/2019/04/25/texas-exports-boosted-by-oil-rise-3-times-faster-than-us-increase.html

And this is only the beginning for the US economy in 2019. See the following text and LNG export facility graphic from a Dec 10, 2018 report by the US Federal government’s Energy Information Administration:

U.S. liquefied natural gas export capacity to more than double by the end of 2019

U.S. LNG exports continue to increase with the growing export capacity. EIA’s latest Short-Term Energy Outlook forecasts U.S. LNG exports to average 2.9 Bcf/d in 2018 and 5.2 Bcf/d in 2019 as the new liquefaction trains are gradually commissioned and ramp up LNG production to operate at full capacity. The latest information on the status of U.S. liquefaction facilities, including expected online dates and capacities, is available in EIA’s database of U.S. LNG export facilities.

EIA projection of U.S. Liquefied Natural Gas Export Capacity from 2016 – 2021. Date of projection, Dec 2018.

Given the above information, barring a war or serious election year intervention to kill the economy by the Federal Reserve, the cascade of LNG export infrastructure coming on-line in the 2nd and 4th quarters of 2019  will mean something on the order of a full percentage increase in GDP growth (in a range of 4.0% to 4.5%) in Jan – Mar 2020 over Jan – Mar 2019.  That is what going from 3.6 billion cubic feet per day (Bcf/d) of natural gas export capacity to to 8.9  Bcf/d in Dec 2019 does for you.

This extra 1% GDP will be happening just in time for the Iowa caucuses and New Hampshire primary.

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As a Boston area baby boomer, I belted out the National Anthem in my youth with conviction at sporting events. Massachusetts educators emphasized its role as the birthplace of the American Revolution from distant unaccountable politicians (leaving out the crucial role of fake news written and published by the infamous brewer’s son Sam Adams) and the motivating principles, summed up by Virginian Patrick Henry’s immortal phrase: “give me liberty or give me death.”

In the 1970s Boston’s U.S. Congressman Speaker of the House Tip O’Neill quipped “all politics is local.” Now the progressive daily prayer on Twitter begins “Our father, who art in Washington D.C. give us money – a guaranteed minimum income, reparations, welfare, entitlements, etc. and other free stuff – food, housing, medical care, a college education.”

Bostonian President Kennedy’s appeal to voters’ patriotism in the 1960’s to “Ask not what your country can do for you. Ask what you can do for your country” is reversed today. Patriotism is as out of favor with many millenials (who proudly display their participatory soccer trophies) as are the Boston (now New England) Patriots for hogging the Super Bowl Trophy this century, stigmatizing other teams as “losers.”

Competing Foreign Ideologies

Traumatized by competing ideas, many millenials would trade U.S. competitive capitalism and individual freedom for a free lunch. “History doesn’t repeat itself but it rhymes” according to Mark Twain. The core contemporary national political issue is whether America’s popular progressive ”social democracy” ideology rhymes with its founding principles and historical values or foreign ideologies that threaten the body politic?

The Communism Threat

The Bolshevik Revolution ended an anachronistic Imperial dynasty in a country with no prior democratic traditions. Communist intellectual Leon Trotsky promised a utopian Marxist socialism, international brotherhood and the end of nation-state competition for resources as the state would wither away. Communist atrocities under Stalin, murders and deaths measured in the tens and hundreds of millions, predated the WW II Western Alliance in a desperate attempt to industrialize a backward agrarian society.

Stalin promoted opaque Russian Imperialism under the banner of brotherhood. Soviet skullduggery in post War elections in Europe and around the globe – and CIA involvement to counter it (or visa-versa) – was widespread. The post WW I & II “Red Scare” of communist infiltration of state institutions in the U.S. was somewhat over-blown, but the belief that communists could be elected in a democracy based on false promises then turn dictatorial and refuse to relinquish power as has occurred most recently in Venezuela, was well founded. Fearing such a cancer on the body politic, the Communist Control Act of 1954 outlawing the Communist Party in the United States suppressing free speech passed with the full support of progressive Democrats who wanted to distance themselves from ”Uncle Joe” Stalin (and later, many others, including Mao).

Fascism, Communism’s Cousin and Bitter Political Rival

Hitler came to power in democratic Germany promising economic prosperity, understandably as wartime consumer deprivation far exceeded that of France and Britain (where communist sympathies were widespread), and post war reparations inhibited a consumer recovery. Although Mussolini, the founder of European fascism, once headed the Communist Party in Italy, and Hitler founded the National Socialist Party, neither implemented socialism domestically. By national, they meant a return to Germany’s pre-War greatness: consumers initially benefitted from a massive boom in defense spending before once again suffering wartime deprivations.

The nationalist agenda was less imperial than traditional. European history since 1453 is largely related to border wars as Germany is caught in the middle between the British and French empires to the west and Russian empire to the east: only the scale of Nazi eastward border expansion represented a radical departure. In Hitler’s view this rhymed with American westward expansion and genocide of the indigenous populations. He persecuted the Jews, even ethnic Germans, based on Nazi perception of Jewish financing of German enemies on the WW I battlefield and in the labor movement fomenting unrest on the home front and their perceived outsized influence in the Bolshevik communist movement (Trotsky was Jewish).

Hitler inherited a failing German economy. He was aware that the economic potential of the western capitalist powers were orders of magnitude greater and growing faster, causing him to knowingly take enormous risks to address what he believed was an existential threat. Even as he acquired new territories he was playing catch up. Unlike Stalin, he was not driven by an anti-capitalist economic ideology, but intervention in the German economy increased as the Wehrmacht consumed an ever increasing share of GDP – over half at the peak – relying on private enterprise and the profit and price mechanism to the extent feasible (and arguably more than FDR) relative to the size of the war effort. Dictatorial power and crony capitalist corruption – favoritism of the political elite – was an inevitable result of a rising government share of the economy.

Racist ideology contributed to his miscalculation of the military industrial ability of the Soviet Union, where his early luck inevitably ran out, after which a war of attrition would exploit Germany’s relative economic weakness. Economic desperation determined the magnitude of Nazi atrocities, less in scope and subsequent to those of the communists in the Soviet Union, but driven by racism.

In 1977 the U.S. Supreme Court extended freedom of speech protection to the National Socialist Party of America, a racist fringe rather than socialist party.

European Social Democracy

In the wake of WW II deprivation and devastation in Europe, “social democracy” – a greater role of the state in providing household necessities – was viewed as a more benign alternative to communism. Britain, particularly Scotland, experimented primarily with socialized housing and medical care until the late 1970s when, as British Prime Minister Margret Thatcher put it, they were running out of “other peoples’ money.”It was also tried in the small relatively homogeneous Nordic countries, running out of money in Sweden in the 1990s and Finland more recently. These experiments were not democratic socialism or the fascist prone democratic capitalism, as all were financed by taxing capitalist-created income and resulted in retrenchment rather than socio-political collapse when they went to far.

American Progressivism Rhymes with Fascism and Communism, not European Social Democracy

But for democrat skullduggery, Socialist Bernie Sanders might well have been the 2016 Democratic candidate and also won the election. Most of his younger Democrat competitors for 2020 support the Green New Deal, the latest utopian vision. Their success hinges on rhyming this vision with small-state European social democracy, but the American progressive movement has always focused on the entire nation. When a failed ideology is adopted by a large too-big-to-fail nation-state like Germany or the Soviet Union in the past or the U.S. at present, unaccountable politicians cover-up and double down on failure until it is systemic and seismic like the 2008 financial crisis.

Progressivism’s historical nationalism and racism and current methods of intervention in a capitalist market economy rhyme with fascism: its premise that economic progress is attributable to politics and its utopian goal of social justice without regard to national borders both rhyme with communism: the inherent dictatorial lack of political or fiscal accountability rhymes with both.

American Nationalism

Federal power ballooned during the wars of progressive presidents TR, Wilson, FDR and LBJ. That American patriotism is excessively nationalistic has been an issue since the Monroe Doctrine and subsequent Manifest Destiny. America’s support of free trade post WW II supported by American hegemony over trade routes worked well, as it did under British hegemony leading up to WW I. But the post WW II order is once again breaking down as a consequence of increasing nation-state rivalry over resources and trade routes. President Trump’s “Make America Great Again” is daily attacked not as patriotism but Nazi racist nationalism. The future of American Hegemony should be the central issue in the next presidential election.

Racism and Sexism

In a competitive free market economy those who would inappropriately discriminate by race or sex always lose out, always: racism requires political protection from competition. Socialism is inherently discriminatory; the state determines who gets what and who pays. The Democratic Party was the party of slavery, Jim Crow and voter discrimination; it remains the party of restrictive working laws and regulations (with a “disparate impact” on black youth employment) e.g., with well above market “living” minimum wages, credentialing and anti-immigrant worker prohibitions, and admission quotas. Winners beget losers: progressives once again discriminate against Asians.

The progressive party founded the eugenics movement targeted to limit the black population from which Hitler borrowed ideology. Roe versus Wade represents a eugenic success story, as abortion for the white population at the time required no more than a bus ticket to the next state. Now about half of black pregnancies are terminated.

The Road to Serfdom

The promise of “free stuff” to those mostly not yet paying taxes and of cancelling their debt likely explains college students’ preference for socialism over capitalism, and the myth of socialist environmentalism the Green New Deal environmental goals.

Income inequality and Social Justice in a Democracy

America’s social welfare system while not as generous as the Nordic countries generally provides a standard of living sufficient by international comparison and luxurious compared to the deprivations suffered when fascism and communism incubated. Competitive market capitalism produces unequal incomes, the source of its ability to raise the living standards of all through increased productivity. Progressive policies that cross the constitutional threshold of equality of opportunity to demand equality of economic outcomes by broadening the base of the politically favored are a subset of crony capitalism that favors the political elite at the expense of society generally, a failed ideology. Socialism fails every time because incentives matter.

The Green New Deal: a Fentanyl induced Utopian High

Concern for the environment and the human impact on it is warranted, but what to do about it is a difficult question primarily for foreign diplomats. The Green New Deal adopted by only the U.S. would provide negligible environmental benefit. But as virtually all past environmental initiatives, it would be a bonanza for the crony capitalists and their political patrons. Whether or not the Green New Deal cost $100 trillion or only $10 trillion, it is a road to serfdom for millenials, with no exit provided by the archaic modern monetary theory.

Democrats Cross the Rubicon

“The founders of the Roman Republic, like the American founding fathers, placed checks and balances on the power of their leaders. The Romans, however, came up with a way to sidestep these checks and balances when strong leadership was needed, such as a time of crisis.” 

Communism, fascism, the New Deal and social democracy were all implemented in response to an existential crisis. It is no accident that progressives exploited the “environmental crisis” to push their social justice agenda: these faux crises don’t justify national socialism, an existential threat to the body politic.

The majority of American voters – positively correlated to age – still properly associate socialism with the totalitarian communist and Nazi regimes rather than European democratic socialism as socialist Sanders’ argues, undercut by his Moscow honeymoon. The two big progressive myths are that European social democracies never run out of money and that “other peoples’ money” i.e., the other party’s voters, will somehow finance the socialist agenda. Green New Deal proponents refused to vote for it to avoid voter accountability for the costs. National socialism and the virtual one party rule necessary to achieve it provides the best explanation for the rest of the 2020 “democratic” agenda.

Progressive Social Democracy isn’t Nordic

The population of California is four times that of the largest Nordic country Sweden. It, like all the progressive states is over taxed and over indebted. Obamacare impregnated promiscuous states with these twin fiscal burdens with a whispered promise of a subsequent opaque federal bailout when they matured, making states subservient to D.C. like Soviet Oblasts to Moscow.

Suppression of Free Speech

The free speech amendment is listed first as the foremost safeguard against infringement of individual freedom and equality under the law. The Communist Party remains illegal in U.S. due to its meretricious promises, now virtually indistinguishable from those of progressives. Conservative speech to expose the fallacies of progressive ideology and the threat to the Republic is suppressed by the democratic state apparatus. Free speech invites propaganda, including Russian translations, think tank and academic “research” but should be protected, even for communists and neo-Nazis.

From Republicanism to Democratic Totalitarianism and One Party Rule

The American experiment with a limited government republic has been undergoing constant change since the “peoples” candidate Andrew Jackson, founder of the Democratic Party and seventh President, while winning the popular vote in the post-universal male suffrage election of 1824 lost in the Electoral College, which he then proposed to abolish. Subsequent progressive constitutional amendments extended voting rights to former slaves and their decedents (15^th), women (19^th) and the direct election of Senators (17^th).

Even with control of the House, Senate and Presidency, this wasn’t enough to pass Obamacare, arguably the stealth stepping stone to single payer Medicare for all. Unprecedented political maneuvering and prosecutorial and administrative abuse by then FBI Director Robert Mueller was employed. Then a lone opinion of Chief Justice Roberts relied on another progressive amendment, the 16^th enabling unlimited power to tax, to save it.

Socialism in a large diverse nation like the U.S. requires permanent dictatorial powers of enforcement, as highlighted by the requirements of Obamacare and the controversy over the individual mandate. This explains the progressive platform on: voting rights; opposing voter registration, supporting immigration of dependents with voting rights rather than working rights, eliminating the Electoral College, reducing the voting age to 16 years old, registering prisoners, and drive-by voter registration: the Supreme Court; nominating liberal (i.e., anti-Constitutional) Supreme Court Justices, packing the Supreme Court (again), and: the apparent attempt by the Obama Administration to implement PRI style hereditary presidential selection. This rhymes with Mao’s “people’s democratic dictatorship” not the individual liberty of the American Lion.

To quote America’s greatest economist Milton Friedman:  “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Kevin Villani

 
 
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Kevin Villani, chief economist at Freddie Mac from 1982 to 1985, is a principal of University Financial Associates. He has held senior government positions, has been affiliated with nine universities, and served as CFO and director of several companies. He recently published Occupy Pennsylvania Avenue on the political origins of the sub-prime lending bubble and aftermath.

I’ve written previously in my column “President Trump’s ‘Xanatos Gambit’ Government Shutdown” of President Trump’s tendency for building political strategy trees were every possible outcome is to his advantage. (See the “Xanatos Gambit” strategy tree example in the figure below)

This is a decision diagram example of a “Xanatos Gambit.“ Source: https://tvtropes.org/pmwiki/pmwiki.php/Main/XanatosGambit

It very much looks like President Trump has done the same thing with the Democrats and “China lobby” GOP Senators with the post-NAFTA US-Canada-Mexico (USMCA AKA “You Smack-A”) trade agreement and the US economy.

THE US ECONOMY, NAFTA & USMACA

The key thing you need to understand regards NAFTA and American manufacturing is that NAFTA was geared to allow the “China lobby” of multinational corporations to use Canada and Mexico as an “international arbitrage opportunity” for Chinese slave labor wage manufactured goods to be assembled at Canadian and Mexican production facilities and avoid American tariffs.

Multinational corporations exploiting this “international arbitrage opportunity” was “The Great Sucking Sound” that Ross Perot talked about which killed the US domestic refined metals industry and hollowed out middle class manufacturing jobs in the American economy.

President Trump’s USMCA removes that “international arbitrage opportunity” via original 75% North American manufacturing content requirements for metals and intermediate manufacturing goods as well as a Mexican minimum wage rules on the order of $15 an hour for automotive parts assembly.

In response the “China lobby” has been paying large campaign contributions to both House Democrats and “free trade” GOP Senators to try and keep NAFTA, as well running info-war spots everywhere in the corporate media and “movement conservative” publications/media outlets about the benefits of “free trade.”  This has resulted in public statements by Speaker Pelosi that the House does not intend to vote for USMCA.

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

First point, the USA will be a net energy exporter — of oil, natural gas & coal combined — in 2020 if it isn’t one already.

Some rough numbers:  In 2012 US oil production was ~8 million barrels a day, all for domestic consumption, and in 2019 it is 12.6 million with some exports.  Today’s US oil consumption is 20 million barrels a day.  That increase in oil production that has reduced imports of oil by a net of 4.6 million barrels a day has also been accompanied by the displacement of coal and oil in both electrical production and manufacturing by cheaper natural gas, thus freeing both the coal and oil not used to be exported. This combined economic change since 2012 alone is worth a 1% increase in GDP growth a year compared to 2012.

Second, the Trump administration’s systematic and sustained attack on Obama era federal regulatory growth is reducing business compliance costs particularly in the energy sector for new infrastructure projects.  These are the “anti-green” actions the Democrats accuse the Trump administration of.

Third, the Trump administration/GOP tax bill, in addition to increasing spending power for the middle class, has had a huge -YUGE- reduction in capital gains taxes and a one-time break in repatriating overseas capital holdings. This has made America a much more attractive place to hold and invest money.  Particularly for energy companies like Exxon, which are dropping this foreign capital inflow into the Permian basin for oil and natural gas fracking and energy export infrastructure from the Permian to the Gulf Coast.

Finally, in terms of trade and tariffs, President Trump’s tariffs on Chinese steel and aluminum combined with the business implications of USMCA rules have made further investment in Canadian automotive plants a net loss position.  American metal content is now economically competitive for energy sector infrastructure and automobile parts such that US Steel among others are reopening US metal plants.

Taken together every part of the GDP equation has been directly affected by the Trump administration macroeconomic policies to get that 3.2% GDP number.

This is where the Xanatos Gambit for USMCA arrives.

Things will be worse for the China lobby without a vote on USMCA than with one.

Short form:

NAFTA is dead regardless of any action or inaction by the House.  All the House and Senate can do is not vote on USMCA.  The legislative branch cannot revive a NAFTA trade agreement the federal executive has withdrawn from.

This means without a signed USMCA trade deal Pres.Trump can — and will — lay on even more tariffs on the multinational corporations playing price arbitrage in Mexico and Canada between Chinese and American manufacturing.

While such trade sanctions can reduce the American economy like a tax increase, when we are likely at close to 4% economic growth in late 2019 to early 2020 from the accumulated investment in energy projects bringing defacto energy independence, a 3.5% economic growth rate with tariffs is still pretty good.

And when the House refuses to vote in USMCA, NAFTA still dies.

Pres. Trump can and will lay on new massive new anti-Chinese tariffs on Canadian and Mexican front companies for China without USMCA rules.  This will be massively popular in the Midwest in an election year and will hurt the income streams of the multi-nationals supporting the Pelosi Dems and McConnell RINOs.

From Trump’s point of view, What’s not to like about America’s manufacturing base employing the Midwestern white working class growing while the “international arbitrage opportunity” of China’s slave labor economy contracts?

New ‘Medicare for All’ Bill Would Kick 181 Million Off Private Insurance

Now might be a good time for new federal legislation requiring all members of Congress to use only Medicaid for their own non-emergency medical care. The plan’s features could include:

-Doctors assigned randomly from a list of the Medicaid providers in each member’s district.

-Penalties (fines? misdemeanor/felony? the posting of the member’s name in an online ledger?) for going outside of this system for treatment without prior approval.

-Prior approval to require a unanimous vote by a panel of citizens selected randomly from a list of the registered voters in each member’s district.

Of course this legislation would have no chance of passage. Its purpose would be to make Congressional single-payer advocates explain why they should be exempt from it, and then why the rest of us should be be subjected to their hare-brained socialized-medicine schemes.

Make them live by their own rules, as a great man once said.

Professor ZZZ asks: “Trump is not Stalin but in the history of national (federal) political figures in this country, I’m wondering … where [would] you put Trump? … Having a POTUS so publicly awful along those lines lowers the horrible bar so dramatically that we will pay for years to come. Not being Stalin but being Roy Cohn is a hell of a legacy.”
 
Tillman responded:
 
[. . .]
 
Trump is ahead of Woodrow Wilson: World War I, and! his resegregation of the federal civil service. I grant you that being ahead of Wilson is not saying much…but then, the nation survived Wilson, and no one today thinks of Wilson as having lowered the bar vis-a-vis future presidents. Professor ZZZ seems to be worried about this. He wrote: “Having a POTUS so publicly awful along those lines lowers the horrible bar so dramatically that we will pay for years to come.” Really?—Will we pay for it in years to come, or is this just a shabby slippery slope-type argument?
 
I cannot say I see much sense in Professor ZZZ’s references to Roy Cohn. Roy Cohn’s permanent claim to fame is his association with McCarthy and aggressive anticommunism. Trump, by contrast, has been criticized for being too close to Putin. It is not exactly the same; actually, the two are not alike at all.
 
If words and pretty speeches are the measure of a president, then Trump comes up short. The question is whether that is the correct standard for measuring presidents in a dangerous world.

Read the whole thing.

Seth’s last line is a good summary of the general flaw with many anti-Trump arguments. However, Seth doesn’t go far enough with specific examples:

-Trump didn’t withdraw US forces precipitately from an overseas conflict, leaving the worst of our enemies to fill the resulting power vacuum as Obama did in Iraq.

-Trump didn’t reverse longstanding US policy, deprecating alliances with pro-American countries, in a foolish and futile effort to buy the love of the Iranian mullahs as Obama did.

-Trump didn’t let himself get played by the North Korean dictatorship as Clinton, both Bushes and Obama did.

-Trump didn’t use the IRS to harass his political opponents – as Nixon threatened to do, as the Clintons did to right-wing activist organizations, and as Obama did to organizations and individuals who were active in the Tea Party movement.

-Trump didn’t use the FBI and CIA to spy on his Democratic rivals’ election campaigns as Obama seems to have done to Trump’s 2016 presidential campaign.

I can think of numerous other examples of unwise or malicious actions taken by previous presidents that Trump hasn’t done. Feel free to add additional examples in the comments.

I have previously posted some articles on the French healthcare system, which is the best in Europe.

Here is an article on the French system.

The French citizen or resident joins Caisse Nationale d’Assurance Maladie deTravailleurs Salariés (CNAMTS)—health insurance organisation for salaried workers. That covers about 80% of the population now and it pays 80% (often more like 70%) of a fee schedule for the doctor visit although specialists are allowed to charge more. French doctors are divided for payment and fee schedule purposes into three “sectors” after 1980. Sector 1 doctors agreed to abide by the fee schedule established in 1960, modified for inflation and technological changes. They are mostly primary care doctors although some had waivers from the fee schedule prior to 1971 because they were more experienced or had great reputations. Few are still practicing. Sector 2 doctors could set their own fees but reimbursement was still determined by the fee schedule. These two categories correspond roughly to Medicare assignment in the US. If you accept assignment, you agree to accept Medicare payment as the full payment (or 80% of it plus the Medi-Gap payment).

The French have private insurance that acts like US “Medi-Gap” polices but for all.

It seems unlikely to me that Democrats would accept a health plan that allowed balance billing, which is the only way to control costs, short of pure rationing. The French basically provide a fee schedule that is the same for everyone but which allows doctors to charge more if the patient is willing to pay. For example, I called the office of a new internist last week to schedule an appointment. The clerk required that I submit all my insurance information, not my health status, and the doctor would decide if he would see me. If he is that busy, perhaps he could justify charging more.

Here is another article from that series explaining the French system.

French primary care physicians are paid less than American but medical school in France does not require a college degree and is free. I suspect that system might be more attractive in the US than many realize.

Unfortunately, such a radical reform is unlikely. There are other options under consideration.

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Last Friday, the Mueller report was submitted to the DOJ. Monday, left wing media saw ratings collapse.

What next ? Why Healthcare, of course.

Obamacare, which is a form of expanded Medicaid, costs too much and provides too little care (high deductibles) unless you are a Medicaid recipient. It was designed to shift costs to the insured from the poor. It also was a gift to certain sectors of the healthcare industry. Ted Kennedy criticized healthcare as a “cottage industry” with lots of independent doctors doing their own thing as small businesspeople. That is why doctors have traditionally been conservative. Obamacare changed that. Healthcare is now an industry with doctors mostly on salary and controlled by administrators.

I talked to a young ophthalmologist last week, who had treated a mild eye disorder. He told me he moved to Tucson to work at U of Arizona medical center, which used to be called “UMC” by everybody in Arizona. He explained that the UMC administrators had gotten deeply into debt installing a new “Electronic Health Record” system and sold the UMC to Banner Health. This is a chain that runs the former UMC and has seen an exodus of university faculty physicians. Even my barber noticed. He told me several weeks ago that his surgeon, who had operated on him, got tired of constantly being told he only had 15 minutes to see each patient and left for the VA. The ophthalmologist was disappointed as he had looked forward to working at the academic center.

Traditionally, administrators hated doctors. We made their lives more difficult by advocating for patients. I once told an administrator that if the hospital did not reduce the markup on pacemakers, I would testify for the patient if they sued him for the balance of the bill. They didn’t like it but knew I could go elsewhere,and take my patients there. If I had been an employee, I would not have that choice. Several years ago, I explained how we started a trauma center in our hospital. Since then, the hospital has been sold to a non-profit run by nuns. The surgical group that ran the trauma center for 35 years was fired two years ago. They had declined to sell the group to the hospital. They were replaced by six female surgeons no one had ever heard of and who had never applied for privileges at the hospital or been evaluated by the Surgery Department. No one knew anything about them except one member of this new group had applied for a job at the trauma group and been turned down.

There were a few comments about some less satisfactory results on trauma cases but that has quickly gotten quiet.

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One of the life experiences that comes with being a three decade veteran of military procurement is you have been around long enough to know where all the important bodies are buried — case in point, the Boeing 737 MAX.  What we are seeing in the two recent 737 MAX crashes is the the 20 year accumulation of professional toxic waste and decay in Boeing management that came with the first Clinton Administration’s cancellation of MIL-STD-499A SYSTEM ENGINEERING MANAGEMENT.

737 MAX Jetliner in South West Airline Colors.

I was e-mailed a link today to this Daily Kos post on the 737 MAX :

Did Boeing ignore basic SW engineering principles?
Thursday March 21, 2019 · 8:34 AM CDT

and this passage just jumped out:

A few software engineering principles:

• Software engineering 101: validate your inputs.
• Software engineering 201: when something goes wrong, provide useful data to the human.
• Software engineering 301: for life-critical decisions, avoid single point of failure.

Until today, I had thought that aviation was *good* at software engineering. But my faith is shaken by the New York Times description today of what went wrong with the Boeing 737 MAX.

The above passes my professional “Bozo Test” of whether the poster knows what he is taking about regards software development.  He does.

This is where that “military procurement life experience” I mentioned comes in.  The timing of the development of the 737 MAX MCAS software was roughly 20 years after the Clinton Administration cancelled the majority of Mil-Specs in the mid-1990’s and in particular the one for system engineering management.

See:

MIL-STD-499A (NOTICE 1), MILITARY STANDARD: SYSTEM ENGINEERING MANAGEMENT (27 FEB 1995) [NO S/S DOCUMENT]., MIL-STD-499A (USAF), dated 1 May 1974, is hereby canceled without replacement.

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I moved to California in 1956 to attend college. Los Angeles was a paradise. The weather was great. The traffic was no problem. I learned that the LAPD did not take bribes and was not amused at attempts to offer them. After growing up in Chicago, I had learned to put a ten dollar bill behind my driver’s license in case I was stopped. In Los Angeles, I did so and was lectured about the consequences of offering a bribe by a stern LAPD officer.

I lived in the fraternity house and one year slept on an outside second floor porch. I had four blankets on my bed but no problem, with flies or mosquitoes. I remember flying back to Los Angeles one New Year’s Eve from Christmas vacation in Chicago. The palm trees told me I was home. There was a brush fire in the hills but it was nice to be back. I would sometimes drive up to Sunset Boulevard just to see the city at night. The TV show, “77 Sunset Strip” showed just what it looked like. We would drive into Hollywood and sometimes eat at Villa Frescati. We had a lot of fun. Too much fun as I lost my scholarship.

The first sign of trouble was described in Victor Davis Hanson’s book, “Mexifornia.” There was trouble before that as the Watts Riot in 1965 began the endless pandering to the angry mobs.

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There has been much concern about possible hacking of the power grid by Russia, China, and others.  Here we have a segment from Rachel Maddow, inspired by a threat analysis from the US Intelligence Community.  From the analysis:

China has the ability to launch cyber attacks that cause localized, temporary disruptive effects on critical infrastructure–such as disruption of a natural gas pipeline for days to weeks–in the United States. Russia has the ability to execute cyber attacks in the United States that generate localized, temporary disruptive effects on critical infrastructure.

Maddow:  It’s like negative 50 degrees in the Dakotas right now. What would happen if Russia killed the power today?  What would happen if all the natural gas lines that service Sioux Falls just poof on the coldest day in recent memories?

What would happen?  Nothing good.  These are serious threats, and I doubt that Russia and China are or will continue to be the only entities able to conduct such cyberattacks.  And there is also plenty of risk for non-cyber attacks…physical-world sabotage…which could have similarly malign impact on energy infrastructure.

But we don’t need to wait for a foreign adversary or domestic terrorist organization to cripple our energy infrastructure.  We can quite effectively do it to ourselves.

In late January, it was very cold in Minnesota.  And there wasn’t a lot of wind.  Natural gas, also, was in short supply, as a result of pipeline capacity constraints.  Xcel Energy urged its gas customers to turn down thermostats and water heaters, and to use electric heaters as necessary.  The electricity was coming from primarily coal plants (40 GW) and natural gas plants (about 23 GW)–the gas plants, of course, are also dependent on pipeline capacity.

Also in Minnesota, here’s a large solar farm covered with snow.  Wonder if it’s melted or been swept off yet?  And here’s a cautionary story from Germany, where long, still, and dim winters do not mix well with wind and solar power generation.

Solar and wind in most parts of the US are now small enough in proportion to overall grid capacity that shortfalls can be made up by the other sources.  What happens if they come to represent the majority of the grid’s power capacity–not to mention the exclusive source of capacity, as demanded by some?

It may be feasible to store a few hours of electricity without driving costs out of sight…but what about the situation in which wind and solar are underperforming for several days in a row?  Interconnection of sources and demands over a wide area (geographical diversity) can help, but is by no means a comprehensive solution. So far, the gas, coal, and hydro plants have been there to kick in where necessary.

Almost every day, there are assertions that new solar is cheaper than its fossil-fuel equivalents.  This may be true in some areas if you ignore the need to match supply and demand on an instantaneous basis.  But if the fossil-fuel plants are there to handle only those periods when wind, solar, and limited battery storage aren’t sufficient to meet demand, then the total energy production against which their capital cost is charged will be much lower, and hence, the cost per unit will go up. (See the California Duck Must Die for a nice visual portrayal of how widespread solar adoption has changed the load curve for the other sources.)  In some states with net metering, a home or business owner can sell excess power to the grid when loads are low and buy it back at the same unit price when loads are at their maximum. This becomes especially problematic when “renewables” become a major part of the mix.  Unless incentives are intelligently crafted–unlikely, given politics–“renewable” sources will effectively be subsidized by conventional sources and potentially make the construction and maintenance of those conventional sources impossible.  See If Solar and Wind Are So Cheap, Why Do They Make Electricity So Expensive?

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We now have a a terrible non-compromise Continuing Resolution on border security. The Appropriations committee reported out HR31, the Continuing Resolution.

The Homeland Security division of this bill upholds Democratic values and funds smart and effective border security including construction and screening technology at ports of entry, where most drugs illegally enter the country.

Neither Democrats nor Republicans got everything they wanted, yet every Democrat and nearly every Republican who served on the conference committee to write this bill has signed it in support.

Boilerplate. The real story is what was inserted in conference.

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An artificial intelligence program was assigned the task of turning satellite images into street maps.  It was graded by comparing reconstructed images (reconstructed from the map) and comparing them with the original; also, by the clarity of the street map.  The grades were used by the program to continually improved its performance.

But what the program sneakily learned to do was to encode details of the original image into the street map, in a manner invisible to humans, thereby optimizing its grade on the reconstructed image…independently of how well the street map…which was the actual desired product…actually reflected the original image.

Humans, also, often respond to incentives in ways very different from those expected by the designers of those incentives…as many creators of sales commission plans and manufacturing bonus plans have discovered.  Bureaucracies, especially, tend to respond to the measurements placed on them in ways that are not consistent with the interests of the larger organization or society that they are supposed to be serving.  See Stupidity, Communist-Style and Capitalist-Style and The Reductio ad Absurdum of Bureaucratic Liberalism.

This blog post on “Industrial Electrification and the Technological Illiteracy of the U.S. Army Air Tactical School 1920-1940” marks the new year with a departure from past history columns I’ve written for Chicagoboyz in that it is exploring a theme I refer to as “The Bane of Technologically Illiterate Military Leaders.”[1] As such, it will not be fully fleshed out with sources and notes.  Consider it a ‘first draft’ of an article I’ll post later.

The issue with ‘Technologically Illiterate Military Leaders‘ I’ll be exploring in this and future articles is that such leaders tend to make the same classes of mistakes over and over again.  And when those military leaders reach flag rank on the bones of theories and doctrines that fail the test of combat through their technological illiteracy.  They then bury the real reasons why those doctrines failed behind walls of jargon and classification to avoid accountability for those failures.

Where you can see this pattern most easily in the historical record is with the US Army Air Corp Tactical School (ACTS) “Industrial Web” theory of strategic bombing  and it’s inability to understand what the changes that industrial electrification caused had meant to this theory.  The “Industrial Web”  theory stated there were “choke points” in an industrial economy which bombing would cause a disproportionate reduction in enemy nation’s weapons production supporting total war.[2]

Figure 1 — This is an example of early industrial age direct mechanical power transmission that was replaced by small electric motor powered tooling in the 1920 to 1940 time period. The US Army’s Air Corps Tactical School (ACTS) early 1930’s era “Industrial Web” theory of strategic bombing was built upon this technological paradigm. Many of the failures of the World War 2 Combined Bomber Offensive can be laid at the feet of Western military leaders illiteracy of what the move to electric motor power, and away from this technology, meant to the vulnerabilities of industrial economies. Source: Wikipedia

On the surface, this was a logical sounding intellectual construct.  In practice, it failed miserably at places like the 14 October 1943 second Schweinfurt raid on German ball bearing factories and the  Yawata Strike,  the start of the early B-29 campaign on Japanese Coke ovens.

The unavoidable, in hindsight, issue for USAAF leaders trained in the Air Corps Tactical School in the period between 1920 and 1940 was that it spanned the change in industrial infrastructure from steam engine, line shaft and power belt to electric motor powered mass production.[3]  Thus the ACTS theorists had a fundamentally flawed understanding of industrial economies vulnerability to aerial bombing going into World War 2 (WW2) because they were technologically illiterate regards the radical change industrial electrification caused.

This flawed understanding was that roof damage in a factory with line shaft and drive belt power transmission — whether steam or electric driven — stops all production until the roof-mounted line shaft is re-seated or replaced.  This was not the case for electric motor delivered power located on the factory floor.  The technological illiteracy here was not seeing the fact that electric motors fundamentally disassociated factory production processes from factory physical structure. [4]

The basic idea that ACTS theorists had at the time was that their “Industrial Web” was a serial system where every component had to work to produce an effect.  Thus ACTS theorists fundamentally believed in the “weak link” theory of reliability, rather than the need to obliterate all key components that a parallel, or complex serial/parallel system, with redundancy required.   The point failure weakness of line shaft and drive belt industrial infrastructure fit this “serial system with a weak link” belief system of ACTS theorists to a tee. [5]

So when you read wartime USAAF bomb damage assessment reports from the WW2  Combined Bombing Campaign giving such and such percentages of factory roof’s destroyed being used as a means of determining whether production there was knocked out.  You are seeing a “weak link” short hand based upon line shaft power transmission infrastructure assumptions.

When you read later post-war bomb damage surveys reading  “…that machines and machine tools were damaged far less severely than factory structures,” you are seeing a USAAF staffer dodging those pre-WW2 “Industrial Web/Weak Link” line shaft infrastructure assumptions by not using the term at all.

This sort of language shift to hide real world meanings with jargon, thus neatly avoiding accountability for failure in combat, is one of the classic ‘poker tells’ in researching ‘Technologically Illiterate Military Leaders‘.

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We currently have a “partial government shutdown” which no one seems to notice. Most of the appropriations bills were passed and signed. The Homeland Security budget became a Continuing Resolution and is being held hostage in the Senate where Chuck Schumer has vowed “So, President Trump, you will not get your wall,”

Trump has not vetoed anything so the responsibility for the “shutdown” is not obvious. The 40,000 federal employees who are furloughed or not getting paid are over 80% Democrats. The most recent pay period will result in checks today. Then the next pay period in two weeks will be the one where the “nonessentials” will not be paid.

Schumer: “So, President Trump, you will not get your wall,” Schumer added. “Abandon your shutdown strategy. You’re not getting the wall today, next week, or on January 3 when Democrats take control of the House.”

How is this playing in the country ? Some surprises.

Ann Althouse reads the Washington Post so I don’t have to.

She notices the comments to that article on the child that died in US custody.

I’ve excerpted the parts of the article that might make a reader want to blame the father. Was the boy exploited? Was he regarded as expendable? There’s plenty else in the article that might make you want to blame the U.S. government (mainly for not giving quicker medical treatments). I would also think many readers would mostly feel sad that a boy died and bemoan poverty generally. So I was surprised at how harsh the comments were against the father. I didn’t expect this at The Washington Post. This is the most liked comment:
This child’s siblings in Guatemala are alive and well. The child was dragged to the US using money that could have paid the father’s overdue electric bill, which is not a reason to grant asylum.

I wonder how long the Democrats will let this go on if Trump does not cave in ? He seems to have a gut instinct about what Americans think.

CNN seems to think that signing MAGA hats in Iraq is some sort of crime.

CNN Pentagon reporter Barbara Starr said “a lot of questions” have been raised following President Trump’s surprise visit to troops in Iraq where he signed ‘Make America Great Again’ hats and flags.

“How did the red hats get there? Some people are saying, well, the troops just brought them and wanted to get them signed. But even if that is the case, the question remains, there were commanders, there were senior enlisted personnel on the scene, they know the regulation. Why did this happen?” Starr asked.

The cluelessness is almost painful. Obama signed stuff when he was president.

What will the end game look like? The new House is even farther left wing than the Senate. Could the “shutdown” go on for months ?

Look at the comments to the WaPoo article.

Thank you. I am liberal myself but I get tired of people who shut off their critical thinking when it comes to brown people. This guy made a spectacularly risky decision, and his child paid the price. It’s on his head. This is, of course, on the assumption that the U.S. wasn’t negligent in the kid’s care – which is certainly possible. Nonetheless it’s his father who endangered him.

This looks like trouble for Democrats. What if Trump stares down Democrats for months ?

Rush Limbaugh on Dec. 7:

Donald Trump arrived, the way I hear this Tillerson sound bite, Trump arrives knowing what he wants to do. He doesn’t arrive unsure and he’s not gonna admit that who doesn’t know what to do because he’s not from this world. He’s there, and he has a specific agenda that everybody that elected him knows what it is: Make America Great Again.
 
Sadly, he hasn’t done a lot on that agenda. He hasn’t built the wall yet. We haven’t repealed and replaced Obamacare. There’s a lot of things in the Trump agenda that have not happened yet. But that’s not what Tillerson’s talking about. Tillerson’s talking about some guy comes in and says, “This is what I want to happen.” And your typical Washington bureaucrat or CEO bureaucrat will say, “Well, where’s the memo? Where’s the plan? Where’s the blueprint?”
 
Trump said, “There’s no blueprint. Just do it! This is what I want to happen. This is what I want.”
 
“Well, uh, you know, you shouldn’t do it that way.”
 
“I don’t care what you — just make it happen.” Trump is one of these, this is how he’s worked, “make it happen.” If he’s talking to Jared, if he’s talking to Trump Jr. or Eric or Ivanka, “This is what I want, make it happen.” That’s not how Washington works. Washington works on things not happening. The whole point of bureaucracy is to not do such that it looks like you’re getting things done. There might not be any need for you after you finish. So everything’s never done. Of course Trump’s gonna have compatibility problems with that.

[emphasis added]

A famous request from Adolf Hitler was also the tile of a book about the liberation of Paris in 1944, and might be a question about the riots of this week by the “Yellow Vests”

There is not a single media report about the Yellow Vest demonstrations in Paris and France that I’ve read or watched that has not been slanted by Fake News.

It is not wrong to say that the demonstrations were caused by the government’s decision to raise gas prices. What is missing is that this is just one of several draconian measures dating back half a year, i.e., ‘tis the proverbial straw that broke the camel’s back.

It requires someone on the scene to describe what has really been happening.

For the past four to five months, the French government has done nothing but double down on bringing more and more gratuitous oppression and more and more unwarranted persecution measures down on the necks the nation’s drivers and motorcycle riders.

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John McCain Was elected to Congress in 1982 and elected to the Senate in 1986 taking the seat previously held by Barry Goldwater. In 1989, he was involved in the “Keating Five Scandal.

The five senators—Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan)—were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., Chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln.

The late 1980s were the era of the Savings and Loan scandals.

The Federal Home Loan Bank Act of 1932 created the S&L system to promote homeownership for the working class. The S&Ls paid lower-than-average interest rates on deposits. In return, they offered lower-than-average mortgage rates. S&Ls couldn’t lend money for commercial real estate, business expansion, or education. They didn’t even provide checking accounts.

In 1934, Congress created the FSLIC to insure the S&L deposits. It provided the same protection that the Federal Deposit Insurance Corporation does for commercial banks. By 1980, the FSLIC insured 4,000 S&Ls with total assets of $604 billion. State-sponsored insurance programs insured 590 S&Ls with assets of $12.2 billion.

Inflation in the late 1970s and early 1980s led to pressure on Savings and Loan institutions that had been lending money at 6% to home buyers but savers were demanding higher interest rates to compensate for inflation. The S&Ls were caught in the “Borrow high and Lend low” vise that led to their demise.

My review of Nicole Gelinas’ book on the 2008 economic crisis includes some discussion of the 1986 problems.

The story of the 2008 collapse begins in 1984 with the rescue of the Continental Illinois Bank. Here began the “too big to fail” story. Two things happened here that led to the crisis. One was the decision to bail out all depositors, including those whose deposits exceeded the FDIC maximum. Secondly, the FDIC guaranteed the bond holders, as well. Thus began the problem of moral hazard. Another feature of this story was the role of Penn Square Bank, which had gone under two years earlier in the wake of the oil price collapse, which devastated many of its poorly collateralized loans in the oil industry. Both banks had been caught seeking higher returns through risky investments. Penn Square, however, had been allowed to collapse. Continental was rescued and that began a trend that the author lays out in detail through most of the rest of the book.

The 1986 crisis and the 1989 scandal affected McCain deeply. He was a freshman Senator and was probably included in the group for two reasons. First he was the only Republican and Second, Keating, a Phoenix developer, was a constituent. McCain was humiliated and his ego was as big as all outdoors.

His reaction to his humiliation was once of the worst pieces of legislation in the 20th century, The McCain-Feingold Act.

In 1995, Senators John McCain (R-AZ) and Russ Feingold (D-WI) jointly published an op-ed calling for campaign finance reform, and began working on their own bill. In 1998, the Senate voted on the bill, but the bill failed to meet the 60 vote threshold to defeat a filibuster. All 45 Senate Democrats and 6 Senate Republicans voted to invoke cloture, but the remaining 49 Republicans voted against invoking cloture. This effectively killed the bill for the remainder of the 105th Congress.

McCain, still in his “Maverick mode and still running on ego, persisted.

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…with extension to other kinds of application software.

At the New Yorker, of all place:  Why Doctors Hate Their Computers.

See also this 2012 article in the Atlantic.

[Jonathan adds: See also this 2009 Chicago Boyz post and discussion.]

(No, this post is not about sex…sorry. Nor is it about electrical engineering, though it might at first give that impression.)

The often-interesting General Electric blog has an article about drones, linked to a cloud-based AI platform, which are used to inspect power lines and detect incipient problems–for example, vegetation which is threatening to encroach on the lines and short them out, or a transformer with a tendency to overheat.  The article mentions a 2003 event in which an encounter between an overgrown tree branch and a sagging power line resulted in a wide-area blackout that affected 50 million people.

The inspection drone sounds like a very useful and productivity-improving tool: obviously, inspecting thousands of miles of power lines is nontrivial job. But the deeper issue, IMO, is the fact that one problem in one place can propagate over such a wide area and affect such a vast number of people.  Power system designers and the people who operate these systems are certainly aware of the need to minimize fault propagation:  circuit breakers and fuses, network analysis tools,  and the technologies of protective relaying were developed, by GE among others, precisely for reasons of fault localization.  But experience shows that large-scale fault propagation still sometimes does take place.

This problem is not limited to electrical systems.  The mention of the tree-branch-caused 2003 blackout reminded me of a passage from the historian Hendrik Willem Van Loon:

Unfortunately in the year 1914 the whole world was one large international workshop. A strike in the Argentine was apt to cause suffering in Berlin. A raise in the price of certain raw materials in London might spell disaster to tens of thousands of long-suffering Chinese coolies who had never even heard of the existence of the big city on the Thames. The invention of some obscure Privat-Dozent in a third-rate German university would often force dozens of Chilean banks to close their doors, while bad management on the part of an old commercial house in Gothenburg might deprive hundreds of little boys and girls in Australia of a chance to go to college.

This probably overstates the interconnectedness of the global economy as it existed in 1914, but would fit our present-day global economy very well.  (The author was talking about the origins of WWI, which he blamed largely on economic interconnectedness…not correct, IMO, but the war was largely caused, or at least reached the scale that it did, because of another type of interconnectedness…in the shape of alliances.)

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The election of Donald Trump as president in 2016 was a catastrophic event for a segment of the US government. It had been assumed by the entire “Ruling Class” that Hillary Clinton would, at last, be elected president. Books have been written about her reaction to the loss. One was titled, “Shattered” and recounted her reaction. A pretty good analysis in this Amazon book review.

To be fair to the authors, they lay the blame for her loss squarely on her. They sort of feel bad about it but their close access makes it obvious to them and they are objective enough to report it. The other main person held responsible is campaign manager Robby Mooks, who is so enamored with ‘analytics’ that he can’t see the forest for the trees. The canary in the coal mine is Bill Clinton, who senses that his wife and her campaign are not connecting with the white working class, but is ignored by the team who consider him washed-up and out of date.

What happened after she lost ? The Russia Collusion story was concocted.

Here is an analysis of How it began and why.

It turned out, however, that the dossier was a Clinton-campaign opposition-research project, the main allegations of which were based on third-hand hearsay from anonymous Russian sources. Worse, though the allegations could not be verified, the Obama Justice Department and the FBI used them to obtain surveillance warrants against Page, in violation of their own guidelines against presenting unverified information to the FISA court. Worse still, the Obama Justice Department withheld from the FISA court the facts that the Clinton campaign was behind the dossier and that Steele had been booted from the investigation for lying to the FBI.

Now, more analysis is coming from Sharyl Attkisson.

Taken together in context, the evidence points to two important findings. First, U.S. government insiders, colluding with numerous foreign citizens and governments, conspired to interfere in the 2016 election. Second, after the election, these figures conspired to undermine, oust, and perhaps even frame Trump and some of his associates.

The methods used, according to factual accounts and witnesses, include collusion with reporters and politicians, leaks to the press, and paid political-opposition research. Officials in the intelligence community were involved in the effort, which included the use of the Foreign Intelligence Surveillance Court (FISC), domestic and foreign informants or spies, and electronic surveillance.

Both articles are worth reading in full. The fact that other diversions are appearing, like the hoax bomb story, suggests that the Democrats know the Mueller “investigation” is going to be ended soon with a dud.

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The 2008 economic collapse gave us ten years of economic malaise and the presidency of Barack Obama.

Why did it happen ? I have been a fan of Nicole Gelinas’ book, “After the Fall”

I wrote a long review of it at Amazon, which is still a favorite of readers.

Now, we have a very interesting new analysis, which blames housing almost exclusively.

Looked at in terms of the popular narrative that there was a “financial crisis,” readers shouldn’t be fooled. There was nothing financial about what happened ten years ago. The “crisis” was made in Washington. Left alone, economies and markets never go haywire when natural market forces are putting out to pasture the weak, only to redirect the previously underutilized resources of the weak to higher uses.

He makes an interesting point, which tracks with my own observations.

a booming housing market of the kind experienced in the ‘70s and ‘00s is not a sign of economic vitality. Getting into specifics, a home purchase is not an investment. It won’t render the buyer more productive, open foreign markets for same, or morph into capital meant to develop something productivity-enhancing like software. Housing is consumption, that’s it. On the other hand, investment is what powers economic growth, so the very notion that a reorientation of precious capital away from consumptive goods and into production would foster economic crisis is for those who presume to comment on the economy to reveal how little they understand what they’re writing about. The feverish consumption of housing was what was holding the economy down, which means a reversal of what weighed on the economy would logically be good for growth. If so, markets would have discounted housing’s correction positively.

I moved to Orange County in 1972 to begin my medical practice. I already owned two homes in South Pasadena which I had difficulty selling after the move. There was no appreciation of housing. By 1975, when a bear market caused a malpractice insurance crisis for doctors, my 1972 house had tripled in value. The South Pasadena house I finally sold in 1972 for the same ($35,000) price I had paid for it in 1969, was by 1979 for sale for $595,000.

What did happen in both the 1970s and 2000s is that the dollar substantially declined vis-à-vis foreign currencies, commodities, and seemingly everything else. This matters because in both the ‘70s and ‘00s, gold, oil, wheat, land, rare stamps, art, housing, and just about every other kind of hard asset performed well. Well, of course. When money is losing value, the hard assets least vulnerable to currency devaluation perform best. In a repeat of the ‘70s, housing and other commodities proved a safe haven in the ‘00s from the U.S. Treasury’s policies in favor of a devalued dollar.

I remember well the rush to buy gold and antiques as hedges against the post 1974 inflation. An elderly woman in Oceanside California got wide publicity for her “crazy” decision to invest her money in buying four Rolls Royces and putting them in storage. She paid about $50,000 each. Five years later they were worth about $200,000 each.

Then came 2008.

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Today we mourn the loss of thousands of lives in a terrorist attack on 9/11, 2001.

There was another 9/11 attack in 2012. It was three months before the 2012 presidential election and the implications of this were obvious.

A recent movie documented some of the lies about that event.

Despite Obama’s and Clinton’s recurring lies to the contrary, the deadly attacks of September 11, 2012, on U.S. diplomatic and intelligence facilities in Benghazi, Libya, had no connection with political protests. In director Michael Bay’s political-action thriller, which Paramount Pictures calls “a true story,” these two outposts get slammed ferociously by growing waves of well-armed jihadists who know exactly what they are doing. As if mocking Obama’s and Clinton’s lies, they do not drop their picket signs and then suddenly grab grenades, rocket launchers, and mortar shells. Instead, these killers skip the placards and head straight for the firepower.

We actually know quite a bit about how that event came to pass.

It began as “Operation Zero Footprint.”

We know Operation Zero Footprint was the covert transfer of weapons from the U.S to the Libyan “rebels”. We also know the operation avoided the concerns with congressional funding, and potential for public scrutiny, through financing by the United Arab Emirates (UAE).

However, it would be implausible to think that then Defense Secretary Bob Gates or Joint Chiefs Chair Admiral McMullen were completely unaware of the operation. Even today, despite the numerous hearings and reports, this aspect remains murky. Read the rest of this entry »

When it first became politically trendy to back passage of ‘hate-crime’ legislation, I privately thought it a bad idea, while understanding completely why it was an appealing notion, especially for political and social entities which presumed to act on behalf of those threatened by weaponized hate. The fear in such communities was real, every bit as real as the threats, the vandalism, the lynch mobs, and disenfranchisement. It would take a politician with balls of brass to stand up before a group who justifiably were frightened by all that, and discount those fears. It was the easy way out for politicians, the media and social organizations to portray hate crime legislation as a good and discount those doubts held by those of us with inclinations toward the philosophical. A crime was a crime: there were already laws on the books dealing with vandalism, murder, arson and so on. A motivation for committing a crime ought to be of interest only in establishing the guilt of the perpetrator, not for piling on additional penalties. We do not have windows to peer accurately into the souls of others. Essentially, classifying a crime as a ‘hate crime’ was punishing the thought, over and above the actual crime itself. I didn’t think it was a good idea then, and still don’t think so – especially given the overwhelming numbers of so-called “hate crimes” which turn out to be either deliberate hoaxes, or the deeply imaginative letting their imaginations run away from them. Read the rest of this entry »

This week, the month-long mystery of the missing college student, Mollie Tibbits, was sadly resolved, with the discovery of her body in a local cornfield. Developments in the search for her were updated frequently over the last few weeks, and always featured at the top, or near to the top of headlines on the English tabloid, the Daily Mail. Which, for all its’ eccentricities, abuse of grammar, spelling, penchant for the flamingly obvious, providing Piers Morgan with a salary, extreme Kardashian-worship, and light-to-moderate Trump disdain, does cover the American news scene without much fear or favor.
The longer the mystery of her disappearance went on, though – the greater the chance of a less than happy ending. And as it turns out that the chief suspect in her kidnapping and murder is a man with a distinctly dodgy background – an illegal alien of Mexican background, whose’ identity papers are something of a mystery. His American employers seemed to believe that everything was hunky-dory; this lends the cynical among us to assume that such paperwork must have been better forgeries than the usual run.
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